The directors present the strategic report for the period ended 30 September 2024.
The company was incorporated on 13 June 2023.
On 26 July 2023, the company commenced the purchase of shares in several subsidiary companies, as detailed in note 14.
These group consolidated financial statements represent the new corporate group from 26 July 2023 to 30 September 2024.
The new corporate group includes the "Ruby Energy" group, one of the UK's leading independent commercial energy suppliers. The Ruby Energy group are dedicated to empower SME's nationwide with bespoke energy solutions.
The group also includes complementary businesses associated with the installation of smart meters and card payment services.
The group are committed to innovation and continually improving our services, tailoring solutions for our customers. This includes considering renewable energy options and ensuring affordable renewable electricity products are accessible in the future to everyone.
Fair review of the business
The results for the new corporate group accumulate the financial performance of each acquired subsidiary from the date of acquisition. As such the new group's reported performance for the period and the financial position as at 30 September 2024 only includes transactions allocated to the new ownership period.
Despite the group's reported loss for the period, the main trading subsidiaries of the group are profitable and growing in terms of turnover.
The reported group loss principally relates to group non-trading costs, including group amortisation of purchased goodwill and interest payable on promissory notes associated with the purchase of shares in subsidiaries.
The group loss reported in the initial consolidated period has created a net liabilities position on the balance sheet at 30 September 2024 of £9.6m. The board are confident that this group financial position will improve in 2025, when a full years trading profits of the subsidiary companies is recognised. Despite the group net liabilities position reported as at 30 September 2024, from a group financial standing perspective, the main individual trading subsidiaries each have strong balance sheets in their own right and as such places the group in a strong financial position.
It should also be highlighted that the new corporate group has significant net current assets of £16.2m as at 30 September 2024. Creditors, amounts falling due after more than one year amount to £94.4m, of which £83.9m relate to promissory notes owed to close family members of the directors, with maturity dates of 2028.
The board are confident that the group's financial performance and financial positions will substantially improve in future years and that the initial reported position has been impacted by timing factors.
Ruby Energy group
The Ruby Energy group consists of Ruby Energy Holdings Limited, Ruby Electricity Ltd and Ruby Gas Ltd, with Ruby Electricity Ltd being the largest contributor to the new corporate group both in terms of turnover and profitability.
The Ruby Energy group business model and target market remain consistent with prior years, and the business offers Fixed Rate or Variable products to a predominantly SME and small corporate customer base.
During the period, the company’s directors and ultimate shareholders changed, and significant progress is being made to establish an independent executive board of advisors and consultants, with industry and finance experience, with the ultimate aim to improve the efficiency and management of the company (and its wider group), including systems, controls and compliance.
Smart Choice Metering Limited
Smart Choice Metering delivers smart meter solutions to domestic customers, businesses and energy suppliers nationwide.
The Company's team of fully-qualified Smart Meter Engineers are committed to the UK Government’s Smart Metering Implementation Programme (SMIP), an energy-industry led initiative to roll-out approximately 53 million smart meters to domestic properties and non-domestic sites in Great Britain by 2025.
As a fully-authorised Meter Operator Provider (MOP), Meter Asset Manager (MAM) and Meter Asset Provider (MAP), the Directors believe that the Company combination of expertise, experience and in-house engineer training academy offers a truly smart, flexible solution to the challenges facing the energy efficiency and metering industry.
During the period ended 30 September 2024, Smart Choice Metering has achieved a significant growth in both sales and gross margin, which is testament to the strategic decisions made and the positive impact that has had, together with improved controls and procedures implemented. It is expected that with continued business activity, growth and effective management of both income and costs, the company will become profitable in 2025.
Card Saver Ltd
The principal activity of the company continued to be that of a supplier of card payment services.
Card Saver Ltd is the smallest of the subsidiaries acquired in terms of turnover, though its services are complementary to the wider group.
Historically Card Saver Ltd has been profitable, though a loss has been reported for the period ended 30th September 2024, due to exceptional external factors, resulting in reduced turnover. The board are pleased to report that post year end turnover growth has been achieved, securing the return to profitability for 2025.
Objectives and Strategy
The objectives of the group are to deliver long term value to the owners. The Board’s strategy to achieve this is based upon the following principles:
Continued growth by continuing to offer relevant, competitively priced products into core markets, underpinned by high quality service for customers.
Commitment to the rollout of smart metering and other industry initiatives to improve the accuracy of billing and customer experience.
To attract, retain and develop exceptional senior managers to continuously improve the organisation’s capabilities and present challenge to the dominant suppliers in the market.
Diversification into new market segments or adjacent markets to support and spread growth.
The group seeks to manage risk through a combination of Board oversight, operational routines, and policies and the principal risks are aggregated as follows:
Energy industry specific risk
The UK non-domestic supply market is highly competitive, and while risk is present in all markets, this continues to be an attractive place to do business.
Operating in a regulated market opens up regulatory and political risks as well as costs, and it is a feature of normal operations that such risks, costs and changes must be accommodated, albeit that they may cause disruption and/or prices changes for customers.
The business has continued to mitigate the risks noted above through the following strategies:
Ensuring the business has the right skills and capabilities to monitor and maintain compliance with regulatory requirements.
Offering products that pass or share risk with end users combined with comprehensive hedging strategies to reduce exposure.
Commodity risk
Commodity risk being the risk of volatility in the price of wholesale energy impacting customer margins. The company seeks to manage this risk by utilising forward energy contracts that align to the term and pricing of customer contracts.
Ukraine war and energy costs
The Ukraine war has resulted in increased costs generally, increasing wages and general overhead costs. The effect on energy prices has been significant. These inflation related price increases are expected to remain for some time to come.
Liquidity risk
The risk that the group is unable to meet its financial obligations due to insufficient credit or cash reserves. This is managed on a short and long term basis with reference to internal working capital strategies and access to external funding.
Credit risk
The risks of bad debt from the customer portfolio and the risk of failure of a counterparty or supplier to meet its contractual obligations. A credit onboarding process is followed for new customers, which predominantly included direct debit as the principal means of payment and trade debtors are monitored on an ongoing basis. To reduce this risk further, 25 additional field agents have been subcontracted to ensure that debts can collected on a timely basis.
Interest rate risk
The group finances its trading operations through a combination of retained profits and finance leases.
Directly related to the acquisition of subsidiary companies and the formation of this new corporate group, the group has committed to promissory loan notes, with interest incurred at a fixed % above base.
The group exposure to interest rate fluctuations on its borrowings is managed by the use of both fixed and floating facilities.
The board reviews the groups’s KPIs at the monthly board meetings. These include operational and financial measurements.
Specifically with the energy trade subsidiaries, key operational KPIs are customer retentions, % of customers on direct debit and bad debts written off.
Customer retentions is key to the business as losing customers results in a loss of revenue. For the period ended 30 September 2024, 69.0% of customers have been retained.
Having customers on direct debit improves the amount of debt that is collected from customers and reduces the potential bad debt exposure. The % of customers on direct debits as at 30th September 2024 amounted to 80.0% of customers.
The amount of customer debt that is written off is a significant KPI for the business as this illustrates the performance of the customer relationships team. Bad debts as a % of sales for the period ended 30 September 2024 amounted to 9.0%.
The group also uses key financial performance indicators to monitor its business. These include:
|
| 2024 |
|
|
|
| Turnover | £151m |
| Gross profit margin | 27.4% |
| Loss before tax | (£6.1m) |
| EBITDA | £10.3m |
| Cash at bank | £7.2m |
| Net current assets | £16.2m |
| Net liabilities | (£9.6m) |
| Net assets (excluding LT debt maturing in 2028) | £74.3m |
The corporate group was formed during the period, and as such, group turnover only includes turnover from acquired subsidiaries from the respective date of acquisition. Group turnover for the forth coming year will be substantially higher as a full trading year will be included.
The group has reported a loss before tax, which is expected given the significant interest expense in the period payable on the group's long term liabilities. This has resulted in the group's net liabilities position at the balance sheet date. The group's balance sheet position is expected to significantly improve in 2025 (and future years) as above, when the benefit of a full years contribution from profitable trading subsidiaries is recognised.
Group EBITDA evidences that the group is profitable and generates cash from an trading perspective.
As the balance sheet date, the group’s cash position was substantial. That, with significant net current assets, demonstrates the group's strong liquidity position and financial stability.
The net liabilities position at 30 September 2024 is reflective of the partial consolidated period and the impact of timing allocations. It should be noted that the group has £83.9m of long term debt maturing in 2028. Excluding the longer term acquisition related debt, the group would have significant net assets. The board are confident that in due course the group financial position will be restored to a positive position and that the current net liabilities position is a timing matter only.
On behalf of the board
The directors present their annual report and financial statements for the period ended 30 September 2024.
The results for the period are set out on page 13.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Directors’ duties
The Directors of the group, as those of all UK companies, must act in accordance with a set of general duties. These duties are detailed in section 172 of the UK companies Act 2006 which is summarised as follows;
‘A director of a company must act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its shareholders as a whole and, in doing so have regard (amongst other matters) to:
The likely consequences of any decision in the long term;
The interests of the company’s employees;
The need to foster the company’s business relationships with suppliers, customers and others;
The impact of the company’s operations on the community and environment;
The desirability of the company maintaining a reputation for high standards of business conduct; and
The need to act fairly as between shareholders of the Company.’
The following paragraphs summarise how the Directors’ fulfil their duties;
Risk Management
We provide business-critical services to our customers. As the industry changes and becomes more complex our risk environment changes. It is therefore vital that we effectively identify, evaluate, manage and mitigate the risks we face, and that we continue to evolve our approach to risk management.
Our People
The group is committed to being a responsible business. Our behaviour is aligned with the expectations of our people, clients, investors, communities and society as a whole. People are at the heart of our the company and service provided to our customers. For our business to succeed we need to manage our people’s performance and development and bring through talent whole ensuring we operate as efficiently as possible. We must also ensure we share common values that inform and guide our behaviour so we achieve our goals in the right way.
Business Relationships
Our strategy prioritises organic growth, driven by cross-selling, retaining existing customers and acquiring new customers into the group. To do this, we need to maintain and develop strong relationships with industry partners, customers, suppliers and intermediaries.
Community and Environment
The group’s approach is to use our position of strength to create positive change for the people and communities within the local area and with which we interact. We want to leverage our expertise and enable colleagues to support the communities around us.
Shareholders
The board is committed to openly engaging with our shareholders, as we recognise the importance of a continuing effective dialogue, whether with major institutional investors, private or employee shareholders. It is important to us that shareholders understand our strategy and objectives, so these must be explained clearly, feedback heard and any issues or questions raised properly considered.
The group will continue to provide commercial electricity, gas and related services. This activity is expected to continue in the future with plans to continually grow the business.
The auditor, Sumer Auditco Limited, was appointed in the period and deemed to be reappointed under section 487(2) of the Companies Act 2006.
The group presents its emissions and energy consumption below.
The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2023 UK Government’s Conversion Factors for Company Reporting.
Vehicle fuel - all vehicles have a tracker fitted and we have extracted a report from the tracking software that records the miles driven by each vehicle and the emissions from that vehicle.
Electricity - we have analysed the electricity invoices received from the supplier and recorded the electricity usage.
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £1,000,000 of revenue.
We have installed smart meters across all sites and increased video conferencing technology for both staff and external meetings, to reduce the need for travel between sites. The group continues to monitor gas and electricity consumption and encouraging staff to be mindful of energy usage and environmental matters generally.
We have audited the financial statements of East Pines Holdings Ltd (the 'parent company') and its subsidiaries (the 'group') for the period ended 30 September 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussions with the directors (as required by auditing standards) and discussed with the directors the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation and taxation legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the loss of the company's license to operate. We identified the following areas as those most likely to have such an effect: laws related to energy supply activities and the regulated nature of the energy industry.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
We design procedures in line with our responsibilities, outlined below to detect material misstatement due to fraud:
Matters are discussed amongst the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud
Identifying and assessing the design and effectiveness of controls that management have in place to prevent and detect fraud
Detecting and responding to the risks of fraud following discussions with management and enquiring as to whether management have knowledge of any actual, suspected or alleged fraud;
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £26,417,511 (2023 - £0 profit).
East Pines Holdings Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Parkside Stand, Fleetwood Town Football Club, Park Avenue, Fleetwood, Lancashire, FY7 6TX.
The group consists of East Pines Holdings Ltd and all of its subsidiaries.
The company was incorporated on 13 June 2023 and prepared dormant accounts to 30 June 2023. The current accounting period was extended to a 15 month period, from 30 June 2024 to 30 September 2024, to align with fellow group companies.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company East Pines Holdings Ltd together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 30 September 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
The group has a reporting loss for the financial period of £9.6m, which has subsequently left the group in a net liabilities position of £9.6m. Principally, this reported loss is in relation to group amortisation of the acquired goodwill when the new corporate group was formed, and interest payable on promissory notes due to close family members of the directors with maturity dates of 2025. The main trading subsidiaries of the group are and continue to be profitable based upon forecasts prepared by the directors.
The group has creditors falling due after more than one year of £94.4m, which include £83.9m of promissory notes due to close family members of the directors with maturity dates of 2028. Excluding these promissory notes, the group is able to pay its liabilities as they fall due, as reflected by the significant net current assets position of £16.2m.
On this basis, the directors have adopted the going concern basis of accounting in preparing the financial statements.
Turnover represents the fair value of the consideration received or receivable from the sale of actual and estimated gas and electricity supplied during the period, net of VAT and discounts.
For gas and electricity supplied, the turnover is recognised on consumption. Due to the inherent nature of both the gas and electricity supply industry and its reliance upon estimated meter readings, gas and electricity turnover includes the directors’ best estimate of differences between estimated sales and billed sales. The company makes estimates of customer gas and electricity consumption based on available industry data, and also seasonal usage curves that have been estimated through historical actual usage data.
Also included in turnover is other income arising from late payment fees and other site works and disconnection costs which are charged to the Company’s customers.
Revenue from the installation of meters and the provision of card payment terminals, is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on installation), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Other revenue is recognised for provision of engineer services. Recognition is based on a hourly rate, with associated income being recognised when the service has been provided.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Trade and other debtors/ creditors which have no stated interest rate, do not constitute a financing transaction, and are due to be settled within one year and as such are initially and subsequently measured at the undiscounted amount of consideration expected to be received, net of impairment.
The group has long term commercial contracts in place for the purchase of gas and electricity. On the grounds that these contracts are held for the purpose of the delivery of a non-financial item in accordance with the group's expected purchase and sale requirements, the own use exemption has been applied. As a result, the agreements do not fall within the scope of Section 12 of FRS102 and are not accounted for as derivatives.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Turnover derived from the supply of gas includes an estimate of the value of gas supplied to customers between the date of the last meter reading and the end of the reporting period. Estimation of the number of units consumed but not yet processed through the settlement process are based on industry data until final reconciliation data is received.
Similarly purchase volumes are also subject to the same degree of estimation, with associated settlement costs dependent on the receipt of final reconciliation data.
Trade debtors are stated net of provisions for both after date sales credit notes and bad or doubtful debts .
Provisions for bad or doubtful debts are recognised when recovery is uncertain, considering the age of the debt and recoverability trends based on actual payments received at the assessment date.
Provisions for after date sales credit notes typically relate to estimated usage invoices and the necessary credit and re-billing based on actual meter reads.
At the balance sheet date, Trade debtor balances, as per note 16, are shown net of a provision totaling £18,485,584, in respect of sales credit notes and bad or doubtful debts.
The useful economic life of intangible fixed assets has to be estimated by the directors to ensure and appropriate amortisation charge is recognised each accounting period.
The amortisation charge (excluding the separate negative goodwill release) included within these financial statements amounts to £7,525,746.
Refer to note 11 for the carrying value of intangible assets impacted by this key accounting estimate.
Renewable Obligation Certificates (ROCs) are certificates used by suppliers to demonstrate that they have met their renewable obligations. The value of a ROC is determined by the buy out price, set by the market, and a recycle element of the final ROC value determined once all energy suppliers have demonstrated either compliance or non-compliance. The group estimates a recycle value based on industry data relating to the total output of renewable energy in the UK, generation capacity and demand, until a final value is determined.
Accruals per note 17/18, includes an accrual for ROCs at the balance sheet date totaling £3,654,846.
All turnover arose in the United Kingdom.
EBRS income received in the period and prior year is effectively government grant income in relation to claims made under The Energy Bill Relief Scheme. Although government grant income, it has been treated as other income, part of gross profit on the basis that the grant income provided by the government is to directly replace lost income from sales to the customer. Customers are given a discount, the income for which is provided directly to the company by the government in lieu of the lost turnover.
In the current period, the group realised an exceptional net gain, on the sale of hedged energy contracts back to the market. The net reported gain, is the combination of the margin made on committed purchases being sold back to the market, less the cost to the group to re-purchase the required energy needed to fulfil its commitments to customers. This net gain is considered exceptional as it is not related to normal trading conditions and is directly related to the "knock-on" impact on energy prices, following the war in Ukraine.
Non-trade legal fees have been incurred in relation to a one-off ongoing legal matter and the costs are defined as exceptional on the basis they have not been incurred as a result of regular trade.
Provision for related party debt in the current period represents a provision for non-recoverability of related party loans due from Fleetwood Wanderers Limited, The Leisure Channel Limited and CX International Limited, which are companies under common control. This is considered exceptional as it was not incurred as a result of normal trade.
Full and final settlement has been agreed on 2 historic legal matters, requiring provision for £286,250 and £560,000. An interim settlement payment of £500,000 was made in 2022 in respect of the first legal matter, which has been deducted from the final settlement.
During the period, an historic provision has been released to the profit and loss account on the basis that any associated liability is no longer payable due to the expiration of time.
The average monthly number of persons (including directors) employed by the group and company during the period was:
Their aggregate remuneration comprised:
The actual charge for the period can be reconciled to the expected credit for the period based on the profit or loss and the standard rate of tax as follows:
Deferred tax has been recognised at a rate of 25%. In October 2022, the government announced an increase in the corporation tax main rate from 19% to 25% for companies with profit over £250,000. There is a small company rate of 19% for taxable profits under £50,000 and marginal relief available for profits falling between £50,000 - £250,000 with effect from 1 April 2023.
Details of the company's subsidiaries at 30 September 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
Commercial Power Limited and AI Home Services Limited are exempt from audit under the provisions of s479a of the Companies Act 2006. The company has provided a guarantee for the liabilities of these subsidiaries in connection with the period ended 30 September 2024.
Obligations under hire purchase agreements are secured against the assets to which they relate.
Obligations under hire purchase agreements are secured against the assets to which they relate.
Other creditors include various promissory notes owed to close family members of the directors in respect of shares acquired in subsidiaries at deemed fair value. Of these promissory notes, £18,166,300 are secured by a fixed charge over group assets and £65,728,919 are unsecured balances.
The promissory notes are subject to interest based on SONIA plus 375 basis points per annum and have a maturity dates of 2028. At the balance sheet date interest payable in accordance with the various promissory notes are included in accruals.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
A provision has been made in respect of two historic legal matters of £846,250, which represents a full and final settlement of these matters. An interim settlement payment was made of £500,000 on one of these matters in 2022, which has been deducted from the final settlement.
A provision has been made of £253,147 in respect of repair and maintenance work that was agreed as part of the lease agreement of Adamson House,a property leased by the group. The provision made is based upon estimates and quotes received from suppliers after the balance sheet date.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax asset for the group is net of fellow group deferred tax liabilities and assets.
Accelerated capital allowances will release over the associated fixed assets useful economic lives. Tax relief on both retirement benefit obligations and short term timing differences will be clamed in the period when paid.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
As at the balance sheet date, contributions due to the schemes in respect of the current reporting year were £102,321.
The company issued 100 Ordinary shares of £1 each on 13 June 2023. At the period end, debtors includes £100 (2023: £100) unpaid share capital.
On 26 July 2023, the group acquired the business of Ruby Energy Holdings Ltd.
The goodwill arising on the acquisition of the business is attributable to the surplus paid on the net assets of the company, and totals £42,319,831.
On 1 December 2023, the group acquired 100% percent of the issued capital of Card Saver Ltd.
The negative goodwill arising on the acquisition of the business is attributable to the surplus net assets of the company received on the amounts paid, and totals £1,286,248.
On 24 October 2023 the group acquired 100% percent of the issued capital of Commercial Power Limited.
The goodwill arising on the acquisition of the business is attributable to the surplus paid on the net assets of the company, and totals £29,208,849.
The group has a contingent liability in respect of a dispute with a supplier over faulty goods supplied. An amount of £593,064 was invoiced by the supplier for these goods but remains unpaid and disputed. Further to this amount the group has a counter claim for loss of earning against the supplier. The dispute is ongoing and at this time the outcome uncertain.
The group had committed at the balance sheet date to purchase wholesale gas and electricity totalling £36,250,789, the commitment to purchase wholesale gas and electricity is to September 2026.
The group had committed at the balance sheet date to sell wholesale gas and electricity totalling £18,650,610, the commitment to sell wholesale gas and electricity is to September 2026.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
After the balance sheet date, the group has undertaken of a number of corporate transactions;
On the 28 November 2024, the group acquired a subsidiary company for initial cash consideration of £350,000. On the 31 March 2025, the group acquired another subsidiary company for total cash consideration of AED 500.
As part of a wider group restructure, eight new subsidiary companies have been incorporated to support the future growth and diversification strategy of the group.
These events are classified as non-adjusting events after the reporting period, as they relate to conditions that arose after 30 September 2024. Accordingly, no adjustments have been made to the results or financial position as at that date.
The company has taken advantage of the exemption available in accordance with Financial Reporting Standard 102 Section 33, not to disclose transactions entered into between two or more members of a group, where any subsidiary party to the transaction is wholly owned.
As a part of the restructure of the group, the following transactions with related parties occurred;
During the period, the group acquired shares in 2 subsidiaries from close family members of the directors for £69,245,000. During the period, interest of £7,593,250 has been accrued to close family members of the directors of the group. Repayments of £3,514,188 have been processed in the period to the close family members of the group directors. At the balance sheet date £7,945,248 is accrued to close family members of the directors of the group as included in accruals, amounts falling due after more than one year and £69,781,832 included in other creditors amounts falling due after more than one year. These balances are unsecured and have a maturity dates of 2028. Interest is charged on the principal loans at a rate of SONIA plus 375 basis points p.a. with late interest of 1% p.a. applied when interest is paid late.
During the period, a loan of £5,000,000 was advanced to The Willows 96 Holdings Ltd, a related company due to common control. During the period, interest of £149,325 has been charged to The Willows 96 Holdings Ltd on the related party loan. At the balance sheet date £5,149,325 is owed by The Willows 96 Holdings Ltd, as included in other debtors amounts falling due after more than one year. This balance is unsecured, with a maturity date of 29 May 2029. Interest is charged on a monthly basis on the principal loan balance at a rate of SONIA plus 375 basis points p.a. with late interest of 1% p.a. applied when interest is paid late.
During the period, the group received a loan of £3,200,000 from East Pines Investments LLC, a related company due to common control. During the period, interest of £68,838 has been charged by East Pines Investments LLC on the related party loan. Repayments of £3,207,357 have been made to East Pines Investments LLC during the period. At the balance sheet date £61,481 is owed to East Pines Investments LLC, as included in other creditors amounts falling due within one year. This balance is unsecured, with the monthly interest payable being due on demand. Interest is charged on a monthly basis on the principal loan balance at a rate of SONIA plus 375 basis points p.a. with late interest of 1% p.a. applied when interest is paid late.
During the period, a balance of £745,000 was transferred by way of an inter-group transfer from Ruby Gas Ltd to East Pines Holdings Ltd, in respect of amounts due from New Primrose Developments LLP. At the balance sheet date £745,000 is owed from New Primrose Developments LLP.
At the balance sheet date £12,865,280 is owed Jaymel Limited, a connected company. This liability is included in other creditors, amounts falling due after more than 12 months. The balance is unsecured and has a maturity date of 31 October 2028. Interest is charged on the principal loans at a rate of SONIA plus 375 basis points p.a. with late interest of 1% p.a. applied when interest is paid late. The interest incurred by the company on this related company balance amounts to £832,907. At the balance sheet date £90,415 is owed to Jaymel Limited in respect of unpaid interest, as included other creditors, amounts payable within 12 months.
As part of the group's trading activities, the following related party transactions occurred;
During the period, the company has recognised various managed services due to Fleetwood Wanderers Limited, a company under common control, of £1,371,254 within expenses, and recharged £627,747 for various services. During the period, a provision has been made of £5,324,395 in one of the subsidiaries for the non-recoverability of a debt due from Fleetwood Wanderers Limited, this amount is included within exceptional costs. At the balance sheet date an amount of £3,052,153 was owed by Fleetwood Wanderers Limited, as included within other debtors.
During the period, the group recharged various costs amounting to £247 to Jaymel Limited, a company under common control. At the balance sheet date an amount of £1,023,841 was owed from Jaymel Limited, this amount is included within other debtors. There are no official repayment terms, however it is expected to be repaid over a number of years and is non-interest bearing.
During the period, the group has recharged £1,984 for various services to The Leisure Channel Ltd, a company under common control and incurred various costs totalling £2,972. During the period a provision has been made of £52,575 in one of the subsidiaries for the non-recoverability of a debt due from The Leisure Channel Ltd, this amount is included within exceptional costs. At the balance sheet date an amount of £46,015 was owed from The Leisure Channel Ltd, this amount is included within other debtors.
During the period, the group has recognised various managed services due to Poolfoot Sports Complex Limited, a company under common control, of £3,745 within expenses, and recharged £228,780 for various services. During the period, Poolfoot Sports Complex Limited made advancements of £181,105 to the group. At the balance sheet date an amount of £82,576 was owed from Poolfoot Sports Complex Limited, this amount is included within other debtors.
During the period, the group has made sales to Waterford FC (Powergrade), a company under common control, of £3,744. At the balance sheet date an amount of £971 was owed from Waterford FC (Powergrade).
During the period, the group has recognised sales invoices for various managed services from CX International (PTY) Ltd, a company under common control, of £601,054 and incurred costs of £30,600 in relation to commissions payable. During the period a provision has been made of £148,696 in one of the subsidiaries for the non-recoverability of a debt due from CX International (PTY) Ltd, this amount is included within exceptional costs. At the balance sheet date an amount of £594,534 was owed from CX International (PTY) Ltd, this amount is included within other debtors.
During the period, the group has recognised various managed services due to CX Global Holdings FZCO, a company under common control, of £8,490,210 within expenses, recharged £440,588 for various services. During the period £110,000 was advanced to CX Global Holdings FZCO. At the balance sheet date an amount of £34,305 was owed to CX Global Holdings FZCO, this amount is included within other creditors.
During the period, the group recognised various services due to New Primrose Developments LLP, a company under common control, of £137,328 within expenses, and recharged £32,979 for various services. During the period £395,000 was advanced to New Primrose Developments LLP, there are no official repayment terms, however it is expected to be repaid over a number of years and is non-interest bearing. At the balance sheet date an amount of £902,852 was owed by New Primrose Developments LLP, this amount is included within other debtors.
During the period, the company has recognised various management services from JRP Management Services Limited, a company under common control, of £2,283,775 and has also made sales to JRP Management Services Limited of £31,555. At the balance sheet date £880,302 was owed by JRP Management Services Limited, this amount is included within other debtors.
During the period, the company has recognised various management services from Davidson Family Limited, a company under common control of £798,304 and has also made sales to Davidson Family Limited of £57,528. At the balance sheet date £309,891 was owed by Davidson Family Limited, this amount is included within other debtors.
At the balance sheet date an amount of £10,000 was owed from Utilisearch.
At the balance sheet date £661,292 is owed from a close family member of a company director, as included in other creditors amounts falling due within one year. This balance is unsecured, non-interest bearing and repayable on demand. This balance was repaid in full on the 31 January 2025.
At the balance sheet date £2,910,831 is owed from a close family member of a company director, as included in other creditors amounts falling due within one year. This balance is unsecured, non-interest bearing and repayable on demand. On the 31 January 2025, a partial repayment of £2,529,742 has been received.
All group and related company debts are unsecured non-interest bearing and repayable on demand unless stated otherwise.