Flowgroup CEO resigns as board begins restructuring

Residential energy supplier Flowgroup announced a restructuring of its business on Thursday that included the implementation of significant cost savings and management changes aimed at bringing profitability forward six months.

In Flowgroup's interim statement on 19 September, the firm reiterated its focus on building a "profitable and sustainable energy supply business" by controlling its costs and increasing the lifetime value of its customers.

Flowgroup said on Thursday that it had sufficient scale to achieve profitability sooner than originally anticipated due to its existing customer base and an intensified focus on the retention of higher margin customers.

The board maintained that Flowgroup should maintain a total of just under 250,000 customer accounts, a deliberate decision aimed at keeping the firm below the level of increased regulatory payments, saving the company roughly £3.5m

Flowgroup looked to streamline the group's structure to focus solely on the energy supply business.

Tony Stiff, chief executive officer, resigned from the board with immediate effect, resulting in an executive team sized at a more "commensurate level" with the size of the business.

Chief financial officer Nigel Canham will assume responsibility for the restructuring and Andrew Beasley will continues as managing director of the energy supply business.

Alan Lovell, chairman, said, "Flowgroup is focused entirely on achieving profitability, and we will realign our corporate structure to ensure that this goal is met as soon as practicable without sacrificing the long-term promise to our customers."

"Energy customers typically provide stable, consistent revenues and we believe that a challenger energy business of our size should prove its worth as early as possible by delivering profitability," he added.

As of 0920 GMT, shares had grown 2.25% to 0.73p.