Inspired Energy (AIM:INSE)  said its strength has been affirmed by a robust trading performance and cash generation throughout the six-month period to 30 June 2020.

In its half-year results, the energy consultant reported that the corporate division had delivered record revenues, growing 34% to £24.94m from £18.68m in H1 2019 and contributing to 93% of group revenue compared to 87% in the comparative 2019 period.

The SME division, representing 7% of revenue, was materially impacted by the pandemic, and generated £1.91m (H1 2019: £2.88m) and Adjusted EBITDA of £0.50m (H1 2019: £0.97). Specifically, corporate energy consumption fell 14% on average over the half-year period.

Pre-tax profits for the half-year dropped 41% to £1.42m, however, cash generated from operations increased by 52% to £10.34m as VAT and PAYE payments tax were deferred.

The corporate order book increased to £61.50m in the period (31 December 2019: £57.50m) with ‘strong customer retention and robust performance from significant new customer wins.’

Shares in Inspired Energy have recovered from lows of 8.58p in April 2020 and were trading at 15.5p this morning.

During the half-year, Inspired has raised £30m through an oversubscribed placing of 200m new ordinary shares and a further £1.3m through an open offer to qualifying shareholders.

The proceeds funded an initial cash consideration for the acquisition of the balancing interest of Ignite while the remaining funds will enable it to advance its pipeline of acquisition targets.

In addition, the group’s acquisition of Ignite Energy, which the company completed in a deal worth £11 million back in July, has had a material benefit to the Group's financial position.

The group now receives the full free cash flow benefits of wholly owning Ignite, having previously only received 40% of profits distributed by Ignite every six months via dividends.

As of 31 August 2020, the Group's net debt was £12.5m, following the £31.3m raise in July. In addition to cash and cash equivalents of £33.0m on hand as of 31 August 2020,

approximately £14.0m of the Group's £60.0m Revolving Credit Facility is undrawn with an additional £25.0m accordion option available, subject to covenant compliance.

Due to the positive outlook and strong balance sheet, Inspired has resumed dividend payments at 0.10p per share (H1 2019: 0.22 pence) in line with its adopted policy with initial dividend cover of at least 3.0x earnings.

“This represents an important milestone in Inspired Energy's strategic development, accelerating the Group's Optimisation Services offering and enabling us to develop market share in the £850m+ corporate optimisation services market,” said CEO, Mark Dickinson.

Outlook

The group said trading remains in line with its expectations and that it believes it is ‘well positioned’ to take advantage of the acquisitive growth opportunities that continue to exist which may be accelerated by the disruption caused to its markets in 2020 by COVID-19.

"Together, the funds raised in the July fundraising, and the benefits of the Ignite acquisition leave the Group in a strong financial position with the ability to make further progress in its organic and inorganic growth strategies,” said Dickinson.

He added, "The Group's profitable and cash generative nature, coupled with continued growth in the order book and substantial liquidity at its disposal, will see it well placed as the economy navigates through the current period of uncertainty.”

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