Utilitywise in line with expectations although corporate division slows
AIM-listed Utilitywise performed in line with expectations in the first half of the year, although the business utility specialist endured a slowdown in the corporate division.
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It traded in line with expectations with double-digit revenue growth compared to the last year and net debt narrowed about 60% to £4.1m, for the six months ended 31 January.
The smaller corporate division, which serves larger organisations and represented 6% of pre-tax profit last year, saw a reduction in revenue due to slower progress than Utilitywise thought when deploying technology solutions to certain customers.
The division's revenue was also affected by the Energy Savings Opportunity Scheme (ESOS), which requires industrial facilities to identify, evaluate, and report energy efficiency opportunities in their companies every four years, which has not recurred this year.
This revenue reduction, together with the on going investment led to a decrease in profit in the first half of the year compared to the second half of the previous year, but the company maintained that that it is confident in the outlook for the corporate division.
Whereas, the enterprise division, which serves the SME market and represented 94% of pre-tax profit last year, saw an increase in revenue and profit.
The gross order book in the enterprise division rose 24% to £50.2m, while revenue still to come from the company's pipeline increased 9.4% to £28m.
Chief executive Brendan Flattery said: "We are pleased to be reporting the key indicators all showing growth against the prior year in our enterprise division, which continued to impress with an increased order book and a strong revenue pipeline. Whilst deployment to certain customers in the smaller corporate division was slower than we had hoped, the division's prospects, and those of the group as a whole, remain unchanged.
“The opportunities for Utilitywise across all of our markets continue to grow. We have made significant progress in the first half in further strengthening the management team, investing in new products and services and implementing new internal initiatives."
Analysts at Shore Capital said the update was "pretty much in-line with our forecast model", in fact, just a touch ahead.
"We anticipated another strong performance in the enterprise (SME’s) division and this has been delivered, an achievement with this business area evolving to a multi-channel/platform model with a broadening service base.
“The corporate division, also moving its model to focus increasingly on encompassing technology (internet of things) solutions, saw its revenue base fall as expected. Little detail is given on the absolute performance, the division generating about 6% of group adjusted pre-tax profit, but traction with clients remains an issue, in our opinion, at this early stage. Investment continues, however, and the performance does still look on-track at this juncture."
Shares in Utilitywise were down 2.15% to 182p at 1001 GMT.