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Inspired Energy builds market presence with Ignite deal

Snapshot

  • Inspired Energy is a consultancy that helps corporates improve their energy buying and usage
  • Acquisitions have focused on moving into optimisation services across utilities
  • Sector is very fragmented and open to consolidation
Inspired Energy plc -

Quick facts: Inspired Energy PLC

Price: 14.739 GBX

AIM:INSE
Market: AIM
Market Cap: £141.48 m
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What Inspired Energy does

Inspired Energy plc (LON:INSE) is an energy consultancy, which aims to take the headache out of energy procurement for big users, selecting the best deals, helping to cut consumption and digitising the whole process.

Also referred to as a Third Party Intermediary (TPI), it works mainly with commercial, industrial and public sector organisations to give advice on procurement, energy accounting, supply chain management, audit, optimisation and strategy.

Inspired has a ‘buy and build’ growth strategy, and keeps a keen eye on acquisition opportunities to help it expand its geographic spread, add technical capabilities and become more efficient within the growing market.

Water auditor Waterwatch and IU Energy were tacked on last year, following the taking of a 40% stake in Ignite Energy with the option to buy the rest before the end of 2021, all of which tap into the attractive market of optimisation services.

Optimisation services involve working with businesses on ways to futureproof them against rising utility costs.

How it's doing

In June, Inspired said its corporate order book, which rose 9% to £57.5mln during 2019, had further increased to £61.1mln at the end of May.

The group said it was largely unaffected by the coronavirus pandemic until very late in March and the business delivered a strong performance in the first quarter, with trading in line with the board's expectations at the time and ahead of the same period last year.

Inspired Energy had cash and cash equivalents at the end of June of £11.5mln plus around £14mln of its revolving credit facility available to it and another £25mln if the company takes up the “accordion option” on the facility.

In July, it raised an additional  £35mln to fund the acquisition of the 60% of Ignite Energy it does not already own.

Ignite provides energy management services to corporate clients like Halfords, Starbucks, and WH Smith.

During the month, Mark Dickinson, chief executive, acquired 580,000 shares at 16.9p each, to take his holding to 1,269,655, or 0.18% of the issued share capital, while Paul Connor, chief financial officer, acquired 440,000 shares also at 16.9p each, his first share purchases, for a stake of 0.06%.

What the boss says: Michael Fletcher, chairman 

“The board has been encouraged by the performance of the Group during this very challenging period and believes it is well-positioned to respond effectively as activity levels continue to recover,” Fletcher said.

“Inspired Energy continues to be a leading player in its markets, the evolution of which may well be accelerated by opportunities presented by the current environment.

Inflexion points

  • The business has remained cash positive during lockdown period
  • Orders have also contain used to rise 
  • Acquisitions likely to boost market presence following recent fundraise

 

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Inspired Energy raises up to £35mln in placing and open offer and fully...

Inspired Energy PLC's (LON:INSE) Mark Dickinson speaks to Proactive after announcing they've raised £35mln and struck a deal to acquire the 60% of Ignite Energy that it does not already own. Dickinson says the acquisition will accelerate the group's organic growth in optimisation services. In an...

on 10/7/20

3 min read