Utility Week

UTILITY Week 7th October 2016

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Finance & Investment This week Profits at First Utility plummet by 84% Customer accounts up by a quarter, but profits fall because of a mild winter and investment First Utility has reported an 84 per cent drop in pre-tax prof- its, despite a 25 per cent growth in its customer base. The supplier's annual finan- cial report revealed that profits fell to £1.7 million in 2015, from £10.8 million in 2014 – but the number of customer accounts rose to 883,000. The extra customers drove a 51 per cent growth in annual revenue, but administrative expenses increased by 62 per cent as a result of "continued investment in acquiring and serving the significant growth in cus- tomer numbers". First Utility blamed some of the profit loss on "abnor- mally warm weather in November and December 2015". First Utility chief executive Ian McCaig said: "We continued to make strong progress against our strategy in 2015, growing our customer base by 25 per cent to 883,000 and increasing our revenues by 51 per cent to £847 million. "A key focus of 2015 was investing for the next stage in our development. We increased the pace of invest- ment in line with our ambitions to ensure we are well positioned to capitalise on future growth opportunities." McCaig said the acquisition of the company's billing platform assets from its third party provider marked an "acceleration of our plans to build our next generation billing platforms". First Utility also grew internationally, launching in Germany in September 2015 in a partnership with Shell Energy Europe. SJ WATER £9m for Scottish Water solar schemes Scottish Water has pledged £9 million to fund solar power projects at all of its sites over the next three years. The deal was set up by sub- sidiary Scottish Water Horizons, and will reduce the company's carbon emissions and cut costs. Scottish Water Horizons head Andrew Macdonald said: "Through use of technologies such as solar panels, several of our water works can now gener- ate at least all – and in some cases more – of the energy they need to operate." Scottish Water Horizons received 45 expressions of interest in the contract and 17 companies submitted bids. It was eventually awarded to four successful contractors – Absolute Solar and Wind, FES, Saliis, and Styles and Wood. The framework will run for an initial period of one year with two further one-year extensions. ENERGY Ovo's customer base soars to 700,000 Ovo Energy's customer base grew 47 per cent in the year to June 2016, in its seventh consecutive year of double-figure-growth. The independent supplier now has almost 700,000 custom- ers, and first-half pre-tax profits for 2016 reached £30.4 million. These record profits follow a net loss in 2015 of £31.7 million. The supplier also saw a reduction in carbon intensity of 34 per cent in 2015 compared with the previous year. Ovo reached revenues of £513 million in 2015 and the success has con- tinued into 2016 at an annual- ised rate of £705 million. Ovo Energy chief executive Stephen Fitzpatrick said: "I am very proud of Ovo's exceptional customer growth and delivering its first meaningful profit." ENERGY £22m contract for Swansea Bay lagoon The Swansea Bay tidal lagoon project has launched a tender for the design and construction of a £22 million turbine manufactur- ing and pre-assembly plant. The 100m-long plant will receive major turbine compo- nents from manufacturers, and all machining and pre-assembly of the 16 turbines will take place on site. It will initially employ up to 100 skilled workers, and a further 150 project workers. The latest contracts follow a competitive tender between potential locations last year. The lagoon is a pathfinder project for full-scale UK and international tidal lagoons. Swansea Bay is expected to have a life of 120 years and an installed capacity of 320MW. McCaig: investment was key focus of 2015 22 | 7TH - 13TH OCTOBER 2016 | UTILITY WEEK Stock watch 11.00 10.75 10.50 10.25 10.00 UNIPER SHARE PRICE, 13 SEPTEMBER - 4 OCTOBER 13 Sep 16 Sept 21 Sep 26 Sep 29 Sep 4 Oct 16 15 13 14 12 RWE SHARE PRICE, APRIL - SEPTEMBER 2016 Apr May Jun Jul Sep Aug Aer initially being offered at a price €10.015, Uniper shares have risen to €10.90 – an 8.8 per cent increase. Uniper's debut on the Frankfurt stock exchange marked the completion of Eon's spin-off of its conventional generation and energy trading activities. RWE has done the reverse, separating off its renewables, grids and retail division into new company Innogy, which began operating on 1 April. Its initial public offering is scheduled for 7 October.

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