Energy One has issued its financial results for the year ending June 2023 and the results suggest that the company continues to grow and consolidate its acquisitions with a 39% increase in revenues to almost $45mAUS (up from $32.4mAUS). It produced almost $12mAUS EBITDA on those revenues and shows that recurring revenues were around $39mAUS. Throughout the year, European CEO, Simon wheeler, had told us how a backlog of project work was keeping it busy in Europe and allowing it to hire strongly and the report shows that project revenues indeed grew strongly by 109% according to the annual disclosure.
As a public company, Energy One has to operate by ASX rules and also report in a manner consistent with establishing shareholder value. What is obvious in the numbers is that Energy One has been investing in its future business strongly both in terms of globalization and in terms of hiring and building up services. While this may not be hugely popular with investors as it dilutes current earnings, in the commodities software and services space it is essential if the business wishes to thrive and grow.. Despite that, Energy One still showed good profitability as stated above and continues to grow profits at a rate of 30%pa. It also incurred additional costs related to its acquisitions, re-structructuring of those and in relation to the current situation with STG.
Extrapolating some of the customer data suggests the company acquired well over 20 new customers last year and now has 370 globally. Gross margin was up, and churn rate was down and is very low. Some churn occurs as a result of bankruptcy in the industry and in Energy One’s case, Simon Wheeler had reported the loss of a couple of retailers in the UK on the back of the retail debacle there last year. Other highlights are that CEO, Shawn Ankers, sees strong recurring revenue growth and a strong pipeline ahead. Energy One is also growing its outsourced operational services capabilities, which we expect to see good growth also in the coming years.
Energy One also commented on its recently reported security breach. Customer systems appear to have been unimpacted and the target appears to have been Energy One’s own internal corporate systems, it says. Investigation and action are still taking place.
Of course, the big highlight for many is the pending acquisition of Energy One by STG. Should that occur, these results show that STG will be buying a company that is moving solidly in the right direction and priming for further growth. That potential acquisition may also arm Energy One with more ability to invest and grow without having to keep half an eye on the share price.
