Inspired Energy plc (LON:INSE) has reported an acceleration in sales growth in the second half of 2019, with the energy consultancy deciding to step up investment to grab opportunities in optimisation services.
Total revenue for the calendar year is expected to be up 50%, compared to 33% in the first half of the year and 24% in 2018, with the core corporate division growing 58%.
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Revenues from the corporate arm, which works with big companies to improve their energy procurement and cut consumption, made up 89% of the group total, as organic growth was up 7% over the year, compared to 6% in the first half and 8% last year.
Group underlying profits (EBITDA) is anticipated to be roughly 39% higher than the £13.75mln in 2018, while cash from operations was up 18% to £14.5mln.
Chief executive Mark Dickinson put the acceleration of growth down to the sustaining of organic growth alongside the integration of 2018 acquisition Inprova Finance, the purchase of a 40% stake and a call option on the outstanding equity of optimisation specialist Ignite Energy, plus Waterwatch in September and IU Energy in December.
Directors took the decision in the second half to accelerate investment in internal infrastructure and talent “to leverage the optimisation services opportunity and step up growth for FT20 and beyond.
Optimisation services, into which the Waterwatch and IU acquisitions were folded, involves working with businesses on ways to futureproof them against rising utility costs.
In its statement, the group said: “In addition, the group's new banking facility provides us with greater headroom and flexibility to conclude further acquisitions in 2020. This combined with integration of acquisitions, provides the board with great confidence that 2020 will be another year of significant progress for the group.”
Trading has accelerated in the opening weeks of 2020, underpinned by the order book that stood at £57.5mln at the end of December.
In a note to clients, analsysts at 'house' broker Shore Capital said despite the 39% growth, EBITDA was "slightly" below their estimates, which they noted reflected the decision on accelerated cost investment, “following and supporting the August 2019 investment in Ignite”.
But, they added, the expected earnings per share of 1.76p would be “still a very pleasing result, in our view, with more to come as investment promotes growth for the current year at least in-line current expectations”