A fall in energy prices has prompted Tyneside intermediary Utilitywise to offer many of its customers chance to “lock in” to favourable contracts.
The Cobalt Business Park-based firm, which arranges utilities deals for commercial clients, said energy suppliers’ propensity to offer more competitive rates amid recent oil price fall had prompted them to revisit deals with existing customers.
Geoff Thompson, the firm’s chief executive, said the “temporary” switch in focus had changed the firm’s revenue mix, which is expected to return to more “normal patterns” in the second half of this year.
In a trading update to shareholders, Utilitywise said Group pipeline revenue, an off-sheet measure which does not account for contract renewal and extension, stood at £23.5m on January 31, down from £28.2m at July 31, 2014 and £23.8m at January 31, 2014.
Mr Thompson said Utilitywise directors were pleased to see both revenue and profitability performing in line with expectations, and that Utilitywise’s ongoing recruitment towards a staff target of 1,400 was progressing.
Speaking to The Journal, Mr Thompson said: “The energy market, and the sentiment among providers, has changed significantly since the fall in global oil prices. We took the decision to go back to a big proportion of our enterprise customers and offer them an opportunity to capitalise on suppliers’ offers of longer term deals.
“We’ve continued to acquire new customers throughout this period, as we always have done, it’s just the revenue mix has changed because of the current market situation.”
Utilitywise’s operation is split into two divisions – enterprise and corporate – dealing with SME and larger corporate customers respectively. The move to extend and renew contracts of customers was concentrated within the enterprise arm.
Mr Thompson said: “Going forward, our efforts will revert to focusing on the acquisition of new customers in our highly fragmented target markets. We expect to report a significant increase in both revenue and profits for the full year in line with previous expectations.”
He added: “The move to Cobalt has gone extremely well, and we continue to be a highly profitable, growing North East company.”
In October last year the firm reported a 76% surge in pre-tax profits following a string of company acquisitions.
Accounts showed pre-tax profits before exceptional items rose to £13.05m in 2014 from £7.4m the year previously.
Utilitywise is expected to reveal its interim results for the period on April 21.