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Sale of SME Division by Inspired Energy

Disposal of SME Division by Inspired Energy to Its Management Team by Way of Buyout

By Bhavya Sharma --
Saturday, 12 Dec, 2020

London: On December 11, energy procurement consultant Inspired Energy disposed of its SME division, allowing it to focus exclusively on its strategy of providing assurance and utility cost optimisation services to corporate energy consumers. The AIM-listed group considered the SME division to be a "non-core activity", contributing just 7% of total revenues during the first half of 2020.

Mark Dickinson Chief Executive of Inspired Energy was in a conversation with Proactive London's Katie Pilbeam regarding "the completion of the disposal of its SME division to its management team by way of a buyout for a total consideration of up to £10.5mln."

Dickinson said: "Unlike the corporate division, where assurance services have performed better than our Covid sensitised model, and optimisation services where FY2020 performance is impacted by deferrals to project delivery, but is expected to recover in FY2021, the SME division has proved less resilient to the pandemic. This transaction allows the group to focus solely on our core service offering to corporate energy consumers with a business that is more resilient to the Covid pandemic in FY2021."

In connection with recent buying and selling trend, Inspired Energy added that "its SME unit was projected to contribute underlying earnings of roughly £1.2m less than current full-year expectations."

However, Inspired Energy stated that in spite of problems in the fourth quarter, trading in its corporate division "remains robust and ahead of management expectations".

As of 1050 GMT, Inspired shares were down 5.66% at 13.68p.

Dickinson explained: "93% of our business is focused on the corporate consumer market where we provide assurance services, energy efficiency services that help them to achieve zero net carbon and their ESG objectives and 7% was the SME division, which provided a price comparison service for smaller consumers."

Dickinson says "this divestment allows the 'core business to focus on these corporate consumers'. The £10.5mln sum will be paid to Inspired on the collection and run off of the SME division’s accrued income balance, the majority of which is expected to be recovered within three years of completion."

Disposal of SME Division by Inspired Energy to Its Management Team by Way of Buyout. London: On December 11, energy procurement consultant Inspired Energy disposed of its SME division, allowing it to focus exclusively on its strategy of providing assurance and utility cost optimisation services to corporate energy consumers. The AIM-listed group considered the SME division to be a "non-core activity", contributing just 7% of total revenues during the first half of 2020.

Mark Dickinson Chief Executive of Inspired Energy was in a conversation with Proactive London's Katie Pilbeam regarding "the completion of the disposal of its SME division to its management team by way of a buyout for a total consideration of up to £10.5mln."

Dickinson said: "Unlike the corporate division, where assurance services have performed better than our Covid sensitised model, and optimisation services where FY2020 performance is impacted by deferrals to project delivery, but is expected to recover in FY2021, the SME division has proved less resilient to the pandemic. This transaction allows the group to focus solely on our core service offering to corporate energy consumers with a business that is more resilient to the Covid pandemic in FY2021."

In connection with recent buying and selling trend, Inspired Energy added that "its SME unit was projected to contribute underlying earnings of roughly £1.2m less than current full-year expectations."

However, Inspired Energy stated that in spite of problems in the fourth quarter, trading in its corporate division "remains robust and ahead of management expectations".

As of 1050 GMT, Inspired shares were down 5.66% at 13.68p.

Dickinson explained: "93% of our business is focused on the corporate consumer market where we provide assurance services, energy efficiency services that help them to achieve zero net carbon and their ESG objectives and 7% was the SME division, which provided a price comparison service for smaller consumers."

Dickinson says "this divestment allows the 'core business to focus on these corporate consumers'. The £10.5mln sum will be paid to Inspired on the collection and run off of the SME division’s accrued income balance, the majority of which is expected to be recovered within three years of completion."