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EnergyOne has an Impressive first Half

Last week, EnergyOne announced its half-year results for the period ending 31st December 2020 and they make for some impressive reading. It saw revenues increase by 45% and EBITDA rise by 78% calling the six-month period performance “very strong” and setting expectations for the second half of the year to be ‘slightly reduced’ in comparison. It said that the revenue growth came from a combination of organic growth, and of the acquisition of eZ-nergy in France. “This was a direct result of the ability of our leadership teams to extract synergies from the businesses, the margin contribution from eZ- nergy, and from economies of scale that are emerging as the business continues to grow in both size and sophistication.”

While Australian revenues, where EnergyOne has a significant market share (approaching 50%, according to the company), grew almost 18% in the prior 12-months, the acquisitions in recent years of UK-based Contigo and eZ-nergy in France, has produced 83% revenue growth for the European business (i.e. Contigo and eZ-nergy as compared to the previous 12-months). Importantly, European revenues are now the greater share of the business and yet EnergyOne’s market share in Europe is significantly lower than Australia suggesting further room for growth. Contigo’s revenues were up 26% for the 12 months to December and importantly, Contigo’s profitability is also up. eZ-nergy also posted a strong performance. The company provided guidance on full-year revenues at $27.5m AUS.

The results are interesting in a number of ways. Firstly, since very few CTRM vendors are obliged to release financial results as they are private companies, the evidence from EnergyOne is that the talk from CTRM vendors this last year of a fairly buoyant market since the summer is borne out in these results. It offers further tangible evidence of a software market that is both active in terms of activity and deal closure. Secondly, the results reinforce the view that ComTech took that the acquisitions of Contigo and eZ-nergy were smart moves by EnergyOne. The two vendors complement one another in terms of functional coverage, are readily integrated having done so for joint customers prior to acquisition as well as providing an EU hedge with eZ-nergy being based in France.

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Additional information disclosed in the reporting merely confirms what ComTech had reported via previous briefings and includes the following additional details,

  • “eZ-nergy won 14 new accounts in 2020 (a record year) including several prestige clients in the “major industrial’ segment. Large customers often insist on dealing with companies that have broad capabilities and strong balance sheets. Being part of a larger group has allowed eZ to meet these customer requirements improving our chances of winning contracts,
  • eZ-Ops and enTrader –provide an opportunity for customers to manage their physical and contract energy positions seamlessly. The two products already share customers in common. During 2020 the Company won a major EU utility with its joint product offering under a single contract and service agreement,
  • Contigo won 6 new accounts during the year, losing 1 due to a market exit. Contigo grew its recurring revenue base by 26% on the pcp and improved earnings margins again for another year, demonstrating the quality of EOL’s business practices and leadership expertise,
  • Contigo has recently been busy implementing two large projects. Both of these two projects have now reached a phase 1 go-live and are progressing well.”

EnergyOne also notes that “scope exists for another complementary European acquisition” and also looks forward to a potential move into the North American markets in a couple of year’s time, “should the right opportunity arise.”  CEO, Shaun Ankers, also notes in his presentation that synergies between the three companies are another area of projected growth for the business. Here, significant opportunities exist between Contigo and eZ-nergy in Europe to cross-sell their software as well as to market software like EnergyOne’s EnFlow (a process automation tool essentially geared explicitly for commodities like energy) into Europe.