Turnover up 43%
Spark ignited by growth in rented homes sector
Spark Energy, the fledgling electricity and gas supplier to the lettings market, today said the rising number of people opting to rent will see it build on a sharp rise in customer numbers.
It now has 140,000 customers, up 20% on a year ago, and expects further expansion as the rented homes sector continues to grow, despite recent tax changes for buy-to-let landlords.
Chief executive 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.”
Pre-tax profits more than doubled from £1.27 million to £3.4m on a 43% rise in turnover from £83m to £118.6m.
“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.,” said Mr Gauld.
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.
Spark’s Selkirk headquarters 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.”
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 launch 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.