Good Energy (GOOD) released their results for the 12 months ended 31 December 2022 today, which alongside solid trading brought further insight into the company's transformation into a high-margin energy services business.
Financial Summary
- Revenue increased 70.3% to £248.7m
- Profit before tax of £8.5m (2021: £1.8m), which includes net £4.9m recognised value on the Zap Map investment. Their underlying profit before tax in the period was £3.1m, with EBITDA of £4.4m.
- Cash and cash equivalents at the end of Dec 2022 were £24.5m.
- Their net assets are £38.9m, above their market capitalisation of £32m.
Transition Strategy
On 20 January 2022 Good Energy announced the disposal of its 47.5MW generation portfolio to Bluefield Solar Income Fund for a total consideration of up to £24.5m.
This sale was part of an ongoing strategic shift to energy and mobility services creating a decentralised energy services business, to enhance existing products and propositions and deliver new services for feed in tariff customers.
During the period they also acquired, Igloo Works, a heat pump and solar installation business, which they say will create a new high margin revenue stream.
The company also completed a Zap-Map £9m series A fundraise with Fleetcor, valuing Zap-Map at £26.3m post money equity value. Zap-Map, is the UK's leading electric vehicle mapping platform and enjoyed a 63% increase in registered users to 550,000, reflecting continued strong growth in electric vehicle uptake.
They also achieved target to install 13,000 smart meters during 2022, increasing total number of smart meters installed to date to over 40,000.
The Opportunity
Good Energy commented: "We are focussed on fast growth areas, with good margin and low working capital intensity. We have identified a target addressable market of almost 900,000 households in the next two years, which equates to a c. £5 billion target addressable market. Including the medium term meaningful green actions households, this increases to a c. £10 billion opportunity. Our engaged customer base of green-minded households provides us with a strong initial pipeline for our energy services and the interest in our new services from this community has been highly encouraging"
Broker Target
Good Energy's broker Canaccord Genuity commented: "The business has 277,000 customers, proven profitability over two decades, is the second-largest feed-in-tariff operator in the UK, and has one we believe of the highest profitability/customer in the industry, it is difficult to easily justify the stock trading with a market cap below this £35mn".
Canaccord has a price target of 475p (current share price is 190p) based on 6.4 times EBITDA for 2024 and 4.7 times for 2025.
The broker goes on to add that this target is "ungenerous for what will continue to be a profitable, fast-growing energy supply and services business".