Spark Energy Reports Strong Annual Growth
Dec 21, 2015 by Spark
Spark Energy, the fast-growing electricity and gas supplier to the GB lettings market, today (Monday) reported a 43% increase in turnover to £118.6m from £83m, and pre-tax profits of £3.4m - up from £1.27m.
The company’s annual report for the year to June 30th 2015 also revealed a 20% rise in customer numbers, which currently stand at 140,000.
Spark Energy has predicted further expansion as the GB rented homes sector continues to grow, despite recent tax changes for buy-to-let landlords.
CEO Chris Gauld said: “The market is moving strongly in our direction, with the number of people renting their homes doubling in the past 10 years.
“Despite having to overcome the numerous obstacles of succeeding in an energy market which has always been challenging for new entrants, the hard work and substantial investment we’ve put in means we’re now firmly established and more than able to compete with the Big Six.
“There are still a number of hurdles to overcome to make our industry a more level playing field, but we’re seeing real changes in the GB energy industry. It is a very exciting time for us as a company and we are now in an excellent position to continue our growth by providing our customers with the very best service - official figures showing that we receive around a third of the complaints of the best performing Big Six supplier.”
“We are highly encouraged by this significant increase in profit and turnover, which was driven through a combination of continued customer growth and reduction in bad debts.”
Spark’s annual report also revealed:
· Investment in the period of £1.2m in the company’s operational and IT infrastructure – following a spending of £2.4m in the prior year.
· A reduction in bad debt provision - an endemic hazard of the energy supply sector - from 7.7% of turnover to 7.1%.
· Continued commitment to smart meter rollout in all customer properties, despite delays to the UK-wide Smart Metering programme.
Employee numbers at Spark Energy’s Selkirk headquarters in the Scottish Borders rose in the period from 190 to 246, mostly in customer-facing areas, and currently stand at over 300.
Mr Gauld said: “We’re now one of the biggest employers in the Borders, and in August we increased our leadership team with the appointment of senior staff, including a continuous improvement director and energy services director headhunted from two of the Big Six energy suppliers.
“The installation of smart meters in all our properties remains a long-term commitment, despite well-publicised delays in to the UK-wide Smart Metering programme resulting in a lack of financing. However, some mainstream financing is now becoming available, and I’m pleased to report that this week we installed the first smart meter in our 2016 rollout plan.”
Looking forward, Mr Gauld said that completion of major systems upgrades in the next 12 months would allow Spark to further accelerate customer growth as the company heads towards becoming a medium-sized independent supplier – with the resultant obligations that entails.
Since its beginning in 2007, the Spark model has focused on partnerships with major estate agents, letting agents and landlords. However the company recently extended its remit to partnerships with social housing organisations via its Pay As You Go Lite tariff, for which it was given permission in a special derogation by industry regulator Ofgem.