annual report & accounts • 2019 •
Climate change is our responsibility Let’s keep the world our home Annual Report & Accounts 2019
Contents
Strategic Report
Why we exist: Let’s keep the world our home 4
How we achieve our purpose & CSR: Powering a cleaner, greener future together 16
What we do to achieve our purpose & CSR: Empowering you to use, share, generate and store clean energy 34
Governance Report
Board of Directors 58
Governance & Directors’ Report 60
Audit & Risk Report 71
Nomination & Remuneration Report 75
Independent Auditors’ Report 88
Financial Statements
Consolidated Statement of Comprehensive Income 97
Consolidated Statement of Financial Position 98
Parent Company Statement of Financial Position 100
Consolidated Statement of Changes in Equity 102
Parent Company Statement of Changes in Equity 103
Consolidated Statement of Cash Flows 104
Parent Company Statement of Cash Flows 105
Notes to the Financial Statements 106
Contents 1 Strategic Report
Why we exist: Let’s keep the world our home
Our purpose and manifesto 5
2019 achievements 6
Chairman’s statement . . 8
The business model 10
Ohief Executive Officer’s review...... 13
How we achieve our purpose & CSR : Powering a cleaner, greener future together
Strategic review 18
Key performance indicators 22
Operating review 25
Key risks 28
Chief Financial Officer’s review 32
What we do to achieve our purpose & CSR: Empowering you to use, share, generate and store clean energy
A regenerative business 36
Our environmental impact 38
Our social impact 50
2 Good Energy Annual Report 2019 Why we exist: Let’s keep the Our purpose world our home climate change is our responsibility. Strategic Report let’s keep the world our home.
Our manifesto Foreword from our CEO and Founder, Juliet Davenport We believe that everyone deserves a future on our home planet. 2019 marked 20 years since I founded Good Energy, with the explicit purpose of fighting climate change. It was also the year that the rest of the world stood up and joined the fight. Greta Thunberg’s global Swimming in our rivers, walking in the forest or simply breathing climate strike movement, David Attenborough addressing climate change on BBC prime time, the UK clean air should always be an option; for us, for our children and for government declaring a climate emergency and setting a net zero target. Our purpose of tackling climate change became well and truly mainstream. But the challenge of how we deliver it remains. their children. The clean energy grid we need to tackle climate change will be distributive. People generating, using, sharing and storing their own power. In 2019 we accelerated our investment in clean technologies to help change the way people engage with energy – from how they use it in the home to how they travel. We know that to keep the planet our home we have to get to 100% We have invested in systems that will enable us to serve more customers, with more services, at a renewable energy. So that’s what we are working towards every lower cost. single day. Governance Report To empower more households and businesses to choose to use genuinely renewable power today, we had success in 2019 in calling for more transparency in the energy market. We were given the highest green rating from Which? magazine and saw Ofgem acknowledge that they intend to address the We exist to give you the ability to generate your own power, not problem of consumers being misled by greenwashed tariffs. just buy ours. No one owns the sunshine, the wind or the rain, so Informing all of this is our new manifesto. This is a bold expression of who we are and our purpose, for a decade in which the world must achieve unprecedented cuts to carbon emissions. let’s share it.
2020 will be a crucial year. While in the UK a net zero goal has been set, how the country will achieve it is the real test. Of course, since that goal was set, societies have undergone dramatic changes to counter the Our goal is to turn every home and business into its own clean COVID-19 pandemic. National lockdowns have caused carbon emissions to drop. But temporary reductions are not enough. Global governments must prioritise green economic recovery that enables sustained power station. Get your clean energy from families and businesses emissions reductions and cleaner, greener societies. in your local community. Power generated by people like you, for Last year I spoke at the United Nations Conference of Parties (COP25) of Good Energy’s role in pushing the perceived limits of what is possible — proving that 100% renewable can be done. COP26 is due to take people like you. place in Glasgow, where the world’s governments will assess progress on the Paris agreement. As the UK’s climate action takes centre place on the global stage, we will continue to prove that 100% renewable is possible and necessary. Our time is now. We believe that we all have our part to play. We do ours not only by
This 2019 Annual Report and Accounts sums up a fantastic year for Good Energy. Together with our empowering you to buy and share clean energy but also by investing investors, people, customers and generators, we are continuing to help tackle the climate crisis. in clean technologies. Financial StatementsFinancial We must be bold, stand up and take action to tackle climate change. We are more powerful together with our customers, generators, shareholders, partners and people. Juliet Davenport Founder and Chief Executive Officer We invite you to stand up with us.
4 Good Energy Annual Report 2019 StrategicStrategic Reportreport 5 2019 achievements
Putting the business on a firm footing for the future Strategic Report
Customer numbers Commenced increased next generation overall with Smart Meter business roll out supply Investment growing 33%
in ZapMap, a Juliet Governance Report catalyst for the Sold Davenport energy sharing Brynwhilach spoke at economy and at solar farm into COP25 of the forefront of EV community Good Energy’s market growth ownership Green role in pushing but continuing credentials the perceived One point to be the PPA recognised limits of what EV charging offtaker for by OFGEM is possible proposition the site Continued for businesses reduction in launched underlying debt
32.5% growth in domestic FIT StatementsFinancial Investment in registrations Awarded highest market-leading following surge green rating by customer service in registrations Which? in their platform, Kraken, before the investigation into HAVEN trial to enable growth scheme closure in green energy completed in domestic supply Q1 2019 tariffs revealing battery storage savings
6 Good Energy Annual Report 2019 Strategic Report 7 Chairman’s statement
In 2019, we had another year of good performance to protect our employees and continue to deliver in January 2018, becoming responsible for finance, as we continued to deliver against our stated strategy products and services for our customers. trading, legal and investor relations. His previous roles and shift to the energy world of the future. We include senior financial and commercial positions at
We have seen no significant financial impact from the Strategic Report continue to demonstrate our resilience to changing Centrica, British Gas, Serco and Avis Europe. Rupert coronavirus (COVID-19) outbreak to date. This is due and difficult markets and remain well positioned began his career as an accountant for PwC and is to a strong starting cash position and cash collections both financially and operationally. We made tangible a Fellow of the Institute of Chartered Accountants in in Q1 2020; the offset of demand impacts between investments in our future strategy, progressing in our England and Wales. Domestic and Commercial supply; mitigations in transition to providing technology enabled energy place for potential cashflow issues; and successful We are proud that we continue to live our values as services for the generation, supply and sharing of business continuity plans. However, we continue a company and our board composition has an equal 100% renewable clean power for all. to monitor the situation closely while planning for representation of men and women. Diversity and a range of scenarios including changes to current inclusivity are principles which we are passionate Our Market: opportunities and challenges government guidance or policy. I believe that as about and continue to promote throughout the Looking back, we saw a significant amount of a business our financial and operational resilience company. We now have a Board in place to guide uncertainty: Brexit negotiations, parliamentary inertia provides us with the flexibility to handle significant and oversee the company to meet its strategic and a sense of constant macroeconomic volatility market volatility. We have a good cash position, a objective and goals. dominated the landscape. Recent events have only high proportion of our customers paying by Direct served to heighten this. Following genuine signs of an Debit and an operating model which can handle Dividend economic resurgence in 2020, the ongoing impact of remote working. coronavirus (COVID – 19) has become a global issue. Alongside our ongoing investments, we aim to Strategic developments deliver a progressive dividend policy. The policy has We are witnessing unprecedented actions from both the objective of increasing the dividend over time as governments and businesses: The Bank of England As a Board, a key area of focus is to create and profitability grows to provide an appropriate return slashing interest rates, tangible impacts on global deliver a strategy to navigate the many challenges to shareholders. We remain mindful of maintaining supply chains and many countries in lockdown from and opportunities the business faces. We have and balancing the ability to invest in long-term March 2020. Whilst these remain highly uncertain to ensure that the business is well positioned to
growth opportunities. Governance Report times, we believe that our financial and operational capitalise on these growth opportunities – both now resilience is allowing us to react to these market and in a way that is sustainable for the long-term. Despite a good performance in 2019 and our challenges. We remain cash generative and have a confidence in the ongoing business, the Board has As the energy market evolves, so do we. We have good cash balance. Despite the pandemic, energy recommended deferring the full year dividend been actively updating our business model to position remains an essential service in homes across the considering the ongoing COVID-19 pandemic and ourselves to prosper in the developing energy-as- country. We have a well-diversified customer base prudent cashflow management. The operation of a-service space. Decentralisation, digital products across a range of demographics, who have all the Good Energy scrip dividend scheme whilst and data analytics will help us thrive and deliver this actively chosen to support our purpose in providing still operational, will also be deferred alongside new service model to our customers. We continue 100% renewable clean power for all. the dividend. The Board will review this position to invest across the business to make this transition a following the publication of our interim results in Operationally, our UK focused business is well placed reality. We remain focused on technology, strategic September 2020. to respond. The implementation of our new customer partnerships and our people. Our investments in technology platform is progressing as planned, with both Kraken and Zap-Map allow us to have the Looking ahead a large proportion of customers already operational technological capabilities to play in the right markets on the new platform. This provides us with further and deliver our vision of a zero-carbon future. We will In 2020 we remain confident in our ability to operate flexibility to operate and deliver all our products and ensure that these decisions are taken in the context in our chosen markets. We expect growth to carry services to customers. of the evolving situation regarding COVID-19. on being driven by business volumes. Continued digital investment will fuel customer propositions, The health and wellbeing of our employees remains Board update supported by a cash generative business model. We of critical importance. We have a strong business aim to realise a return on our investments made to continuity process in place to ensure we can In February 2019 Nemone Wynn-Evans joined the date, while taking advantage of further strategic safeguard against future developments. Whilst the Board as a Non-Executive and has taken on the and commercial growth opportunities. We will potential impact of the virus remains unknown, we role of Chair of Audit and Risk Committee. Nemone make further investments across the business as we remain confident in our capabilities as a business has extensive experience across the financial services sectors and has listed plc and PRA, FCA/ continue our evolution as an integrated clean energy StatementsFinancial FSA regulated experience, having acted as finance supplier, building on our long and successful history in “In 2019, we had another year director on the main board of a stock exchange. this market. of good performance as we Nemone is also a Fellow of the Chartered Institute of Securities and Investments. Nemone’s experience continued to deliver against our continues to be an asset to the group as we continue Will Whitehorn stated strategy and shift to the to reshape the company, leading the shift from supplying to sharing energy. Chairman energy world of the future. ” In January 2020, Rupert Sanderson was appointed 3 June 2020 Chief Financial Officer. Rupert joined Good Energy in February 2017 and was appointed Finance Director
8 Good Energy Annual Report 2019 Strategic Report 9 The business model – energy as a service Strategic Report
Products Homes Energy Sharing energy & services Zero carbon supply Businesses future Future energy Energy as services
a service Governance Report
Decentralisation Data analytics
Digitalisation Decarbonisation Financial StatementsFinancial
Regenerative Provide energy that doesn’t contribute to - and works to - combat climate change Health Income Gender equality Education Energy Voice Jobs
10 Good Energy Annual Report 2019 Strategic Report 11 Chief Executive Officer’s review
Our market and positioning providers. In 2019, we received recognition that the way in which our model supports renewable Our addressable markets in both the domestic and generation is different from the vast majority of
business markets continue to grow. We have seen suppliers. Ofgem granted us permanent derogation Strategic Report a secular shift in customer demand following a from the price cap on standard variable tariffs, growing societal awareness. This focus has not been recognising that our customers choose to be on limited to households, but businesses and financial this tariff which enables us to provide a high level institutions as well. BlackRock, Goldman Sachs and of support for renewable generation. Additionally, Microsoft have all recently released bold visions Which? magazine gave us the highest green rating for the future focused on combatting the climate in their 2019 investigation into green energy tariffs. emergency. Businesses recognise that they need to provide solutions for their own customers and staff. Our purpose remains to power the choice of a Demand for green propositions is now firmly part of cleaner, greener future together by helping people the mainstream conversation. to be part of the solution to the climate crisis. This is at the core of who we are. And it remains central to In 2018 and 2019 we have successfully put Good our strategy today and into the future. Energy on a new trajectory. Embracing the potential of the business sector, as well as focusing on generating and managing power behind the meter; sharing power rather than supplying. We believe we have found a niche where we can utilise the expertise across our business effectively and compete in the ever-changing energy market. Twenty years ago, we launched net zero electricity to enable people to be part of the solution to climate change. Over the next twenty, we will continue to Governance Report support the transformation of the electricity market to 100% renewable. We will also work to transform the heat and transport markets, too. In doing so, we’re expressing our purpose of taking responsibility for addressing the climate emergency and protecting our planet.
Our objective Overall, our aim is to support the move to a renewable future. Our long-term goal is to support Good Energy customers to have a zero carbon footprint in electricity, heat and transport as part of the transition to a zero carbon Britain. In 2020, our focus is on building the platform to allow customers to start a journey in electricity, heat and transport towards reaching zero emissions. Genuinely smart tariffs and products, electric vehicle (EV) propositions and continued supply backed by 100% renewable electricity and carbon neutral gas.
Our opportunity in a decentralising market
When the Group was founded, 98% of the UK’s power StatementsFinancial was from non-renewables and customers had far less choice than they do today about where their energy came from. Today, 35-40% of the national fuel mix is now from renewable energy sources. We are proud of the part we have played – and continue to play – in supporting renewable generation that is making the power grid cleaner. Good Energy continues to supply 100% renewable electricity, now from 1,500 different locations across the UK. We are also one of the largest Feed-In Tariff
12 Good Energy Annual Report 2019 Strategic Report 13 Our vision for the clean energy grid of the future Our strengths It is our belief that the clean energy grid of the future will no longer be dominated by a few large fossil fuel Credibility and trust and nuclear based gigawatt generators, but will instead be comprised of millions of households and businesses • 100% renewable for two decades generating, using and sharing clean, renewable power. • People who are experts in their fields, highly engaged with clean energy Strategic Report Strategic Report
Expert partnerships • Proven understanding of renewables attracts leading partners in the energy sector and beyond • Research and innovation into clean energy technologies with our project partners
Experienced leadership • Strong leadership team with extensive industry experience • Non-management Board of Directors with expertise in brand development, renewables and digital platforms.
The future of Good Our business model allows us to directly interact with customers throughout the entire value chain. From power generation to clean energy use, all the way through to how customers engage with how These new generators will need energy services to support them – and this shift represents a major they use and save energy. opportunity for us. We estimate that today there are approximately one million renewable energy generators powering the grid. We are unique among UK energy companies in having more generation customers that we We see our medium-term growth focused on two key areas: (i) the home and (ii) businesses. This is support with FiT management than supply customers, making us well placed to sell the services that enable underpinned by both the utilisation of 47.5MW of installed renewable capacity, and our access to power energy sharing. The key will be to make being a low carbon household or business of the future simple. purchase agreements (PPAs) and export from generators in the future. In both home and business, we intend to build a platform for future growth through system investments, Governance Report Energy as a service – the business model which will enable us to benefit from scale and drive efficiencies. In the home, this will be realised through Governance Report the investment in the Kraken customer technology platform, while business will enhance its existing Our business already has a foothold in the energy sharing future. Evolving our model to enable energy as a customer service capabilities. service manifests in four key themes: decentralisation, digitalisation, data analytics and decarbonisation. This platform will allow us to expand the customer proposition through improved products and services. This shift from the old world of energy generation and supply towards technology enabled energy services We have a clear roadmap for future energy services, ranging from expanding the number of business is already happening and is what will drive the future of our business. Best in class digital technology and customers the Group supplies gas to, to battery storage and electric vehicle (EV) opportunities including products, underpinned by real time data analytics will help customers understand and act upon their energy leveraging our investment in Zap-Map. We will invest in the right systems, technology and customer service needs, allowing us to help them decarbonise their lives. levels to benefit all our customers and drive growth.
Juliet Davenport
Founder and Chief Executive Officer 3 June 2020 Financial StatementsFinancial
14 Good Energy Annual Report 2019 Strategic Report 15 How we achieve our purpose & CSR: Powering a Strategic Report cleaner, greener future together Governance Report Financial StatementsFinancial
16 Good Energy Annual Report 2019 StrategicStrategic Reportreport 17 Strategic review
Compliance with section 172 of the Recent projects with Octopus Energy, Ørsted and price sensitivity across the wider economy. We For example, we recently launched an electric Companies Act 2006 Zap-Map are evidence of our continued progress have also seen substantial market volatility and vehicle (EV) charging solution for businesses, in our markets. since the start of 2018, at least 18 companies One Point. This provides businesses with the
Section 172 of the Companies Act 2006 requires have exited the market. On top of this, there has infrastructure and capability to act as a dedicated EV Strategic Report To achieve our strategic goals, we will accelerate directors to promote the success of the Company been a shift in politics, policies and society as the charging destination. Developed following detailed investment in products and services across several for the benefit of the members as a whole and in climate crisis begins to play a larger role in everyday market positioning work and existing customer insight, key strands. These will cover both our domestic and doing so have regard to the interests of stakeholders decision making. we refined the proposition through a soft launch business customers as well as having the appropriate including shareholders, clients, employees, regulators before launching a full roll out. We are also working capital structures to achieve scalable growth. Our new customer services technology platform will and the wider society in which it operates. closely with Zap-Map to leverage an increasing allow us to improve our service; decrease customer Throughout this Strategic Report, we have set out number of propositions and services for both our Transformation through technology: Kraken platform acquisition costs through being better able to take on how we have engaged with our key stakeholders and existing and potential customers. customers at scale; and to realise expected operating how the Board have considered their interests during investment efficiencies through a lower cost to serve. These Alongside further propositions, we continue to invest the year when making strategic decisions. Putting our expansion plans into action requires a step savings will allow the Group to reinvest in customer in systems and people within our business teams that change in performance: combining automation, case propositions – making tariffs more competitive and will support future growth and customer retention. management and technology to support our business Strategic goals to drive growth improving customer retention over the medium term. processes. Our investment in a proven customer Successfully delivering on our business plan will drive services technology platform and operating model To continue improving customer retention, we also sustainable growth through: with Kraken Technologies Ltd., part of Octopus Group, plan to provide a suite of low carbon home services; was identified as a required first step to facilitate the market for which is anticipated to grow to over • Lowering customer acquisition cost these plans. £5 billion by 2023. Our propositions will focus on energy management, control, and connectivity in • Implementing the systems and scale to acquire This investment, announced last year, is in line line with our addressable market and customer customers more effectively with our goal of lowering customer acquisition demand. These will include the roll out of smart cost, improving customer retention and increasing • Improving customer retention metering (with the latest SMETS2 technology) and overall customer lifetime value through an improved in-home devices such as smart energy monitors • Complementary new products and services that offering of products and services. This platform will
and thermostats. We are already trialling smart Governance Report compel customers to stay for longer enable significant future growth potential in our energy monitors with a small number of customers domestic business. • Increasing customer lifetime value and will begin a larger rollout throughout 2020. Total forecast investment of £4m will be split • Drive greater value from the Group’s customers Our strategy is clear: we will reduce our cost to serve approximately equally between cash and non-cash through becoming more efficient and selling through improved customer service systems. We are elements. Operating cost savings will be realised more products and services. developing new propositions with existing customers through a significant reduction in headcount and and will acquire new customers with a lower cost operating cost efficiencies. They are expected to Achieving these goals will provide clear benefits for to serve and acquisition cost, through an improved achieve payback of the forecast investment within our customers. Our aim is to create more compelling bundle of propositions. propositions geared towards helping people cut their 18 months of the Q2 2020 full implementation. carbon emissions. These propositions will simplify The write down of existing systems and the cash Business customers’ lives and meet their needs. investment into implementation and transition will be We see a significant opportunity to expand with taken across 2019 and H1 2020. Transformation costs mid-market industrial and commercials (I&Cs). of £865k were incurred in 2019. Investing for growth Corporations are becoming increasingly aware Our strengths Expected efficiency savings will be reinvested in of the need to power their operations sustainably. both price and further proposition development and This grows our addressable market, expanding the Our 100% renewable status, over the past twenty roll-out. This will enhance existing products, services number of larger electricity supply customers and years, gives us credibility with customers and the and competitiveness. The new platform will provide extending into gas. We will also continue targetting experience and knowledge to attract leading significant scalability and flexibility. It will enable consumer-facing brands in the leisure, tourism, arts, partners in the energy sector. We have developed digital and clean technology innovation of significant property and services sectors. a proven expertise and an understanding of benefit to customers. the renewable energy and clean technology In 2019, business supply outstripped domestic markets underpinned by partnerships with supply numbers for the first time. There is an
Home StatementsFinancial like-minded companies. expanding opportunity to build our business Our addressable market in domestic supply continues proposition while maintaining healthy margins, Our people are experts in their field and have high to grow in line with the societal shift towards climate with a substantially lower acquisition cost and levels of engagement. This has been fundamental action. Around half of the UK’s twenty-five million better retention rate than the domestic supply base. to helping us build a strong reputation over time. households feel climate change is important. These Leveraging this expertise, working in partnerships We have a pipeline of planned propositions to households with ‘good intentions’ to reduce emissions and focusing on innovative technology is at the enhance relationships with our business customers account for roughly 25% of our addressable market, heart of what we have always done as a business. ranging from supply to carbon reduction services, to providing a significant growth opportunity. We continue to develop research into clean energy help businesses understand their energy usage and technologies, and work in close partnerships to However, the domestic market remains highly provide benefits for their employees and customers. deliver these innovative products and services. price competitive, reflecting the ongoing energy
18 Good Energy Annual Report 2019 Strategic Report 19 Our EV investment in focus: Zap-Map Strategy in action – recent, ongoing and BestRes future initiatives Our Home Innovation Trial is part of the European- In Zap-Map (ZAP), we have invested in the UK’s Charge point availability is also a significant In 2019, we have been focused on laying the right wide BestRes project, which is researching how to leading electric vehicle data platform. This creates influence. In May 2019 the number of EV charging foundations for growth. This has consisted of systems, better integrate renewable generation into energy huge opportunities to launch products and services locations in the UK overtook the number of petrol people and proposition investment. We have already grids. We provided each household that signed in the crucial area of zero-emission transport – and stations in the UK; a key milestone in diminishing begun to implement the Kraken customer technology up to the trial with a smart hub and linked app, is also a catalyst for the sharing economy. range anxiety for current and future EV drivers. platform, have invested in our leadership team and which measured energy usage by different types Strategic Report We are at the birth of a growing market, on the have a clear proposition roadmap in place for 2020 of appliance. The aim is to explore and better ZAP is the go-to app for Britain’s 280,000 EV route to zero emission motoring. Through ZAP, we and beyond. understand energy usage and management in drivers, used for planning routes, identifying charge invested in this market to be part of this future. the home. points, checking their availability and sharing We continue to refine our proposition pipeline, with power. With close to 250,000 app downloads several products in development. and more than 90,000 registered users, ZAP has Smoothing the transition to EV a significant user base within the fully electric EV ZAP helps existing and potential customers with One Point: innovative solutions for a growing and market. Both the number of EV drivers in the ZAP the transition to EV driving. ZAP is the foundation, fragmented market community and the number of charge points in allowing customers to plan and check routes. The EV market is currently fragmented and complex, its network have been increasing rapidly, which Zap–Pay, soon to be launched, will enable users to but it will soon be essential for UK businesses to offer enhances the breadth and quality of the available access and pay across multiple networks through charging facilities and services. We are now offering data. By actively logging the status and availability one single app – reducing one of the key barriers a new solution to make it easier for businesses to of the public charging network, ZAP provides for mass EV adoption. install chargers and to secure available network crucial insights on individual users charging capacity. 2019 saw the launch of One Point: our experience and requirements. Range anxiety persists for many potential EV drivers. However Zap-Map’s new route planning end-to-end service which supports businesses wanting to offer EV charging to their staff, customers Leveraging the UK’s leading EV platform function, linked to real world driving distance and availability of various charge points, provides and visitors. We ran a pilot with our customer, With the Government consulting on pulling the users with the information to overcome this Watergate Bay Hotel; installing four charging sales ban on new diesel, petrol and hybrid vehicles perceived difficulty. points on the premises, with two more planned. back five years to 2035, the growth potential for Further pilot projects will be launched soon with our the UK EV market is compelling. It is forecast to partners. Lessons from the pilot scheme will help us Delivering value for business Governance Report grow at an accelerated rate with more than 1 expand One Point to companies up and down the million EVs on UK roads forecast by 2025. This is Businesses will play an ever-increasing role in country, with the potential to integrate Zap–Pay driven by factors including: the adoption of EVs. ZAP is well placed to provide to enable open and simple access to all One Point products and services to capitalise on growth in charging locations. • Subsidies and exemptions for EV purchases this market. Investing in innovation and charging As businesses look to evolve their own EV • Road tax exemption propositions, understanding EV usage data will be The clean energy sector is constantly evolving, and key. With the data they possess, ZAP are building we want our customers to be a part of it. • 0% Benefit in Kind tax rate for EV a platform to provide businesses with genuine That’s why we’re working on new products and company cars insight on the state of the market. Additionally, ZAP services to help customers support a clean energy release regular market insights and reports which • An expanding number of new models on future, along with investing in new technologies and can help businesses plan their next steps. the market. research. Aside from our investments with Zap- Map, smart meters and One Point, we continue to innovate in a number of ways. Recent research projects with both Honda and BestRes as examples.
HAVEN: using EVs for home energy storage We recently completed an innovative research project with Honda, Upside Energy and Salford University. The study was designed to examine the value of ‘vehicle-to-grid’ (V2G) technology, where an electric vehicle is used alongside a special Financial StatementsFinancial charger and other home systems: battery storage, solar panels, a smart hot water tank, and heat pumps. The technology is designed to maximise efficient energy usage, save money, and cut carbon emissions.
20 Good Energy Annual Report 2019 Strategic Report 21 Key performance indicators Admin cost (£’000) Operating margin (%) PBT from continuing Measures Measures operations (£’000) min cost perating margin operational profitability as Measures efficiency by a proportion of profitability as Good Energy measures its progress with a number of key performance indicators (KPIs). In 2019, we looking at revenue after a proportion of added new measures which closely align with our business. 2 administration operating costs revenue after cost growth1
Further detail on the factors driving our KPI performance is set out in the Chief Executive, Financial and operating costs Strategic Report Operating reviews within this Strategic Report.
-0.7% Churn (%) Cost to serve Cost per acquisition -2.4% -7.9%
Reflects (total business)Cost (£) to serve (£) (total business) ost per(£) ac rn the rate of Measures the Measures turnover overhead cost the cost or loss of per customer to acquire customers excluding each acquisition customer costs (ie. sales and marketing) -1.2% EBITDA (£’000) Net debt (£’000) Cash & cash et e t as cas e i Measures Measures the equivalents (£’000) -16.0% profitability of Company’s Measures the the company ability to repay un-restricted -6.0% before the all debts if cash and cash cost of they were due equivalents interest, tax, immediately held by the depreciation
business at a Governance Report and point in time amortisation Supply volume Revenue growth (£’000) Gross margin (%) 0.5%
S ppl vol me Measures Reven e gro t Measures Electricity (MWh) Gross margin -0.7% -12.7% growth in profitability Measures sales over as a the the period2 proportion amount of of revenue electricity after the we cost of sales2 supplied to customers
6.4% Employee NPS Carbon avoided (MWh) -3.6% S ar on avoi e engagement (%) Measures Measure the 5.5% how likely a carbon we Measures how mplo ee engage customer is to avoided in engaged our recommend the year people are Good Energy based on Gas (MWh) S ppl vol me G Gallup Measures 12 survey
StatementsFinancial the amount of gas we 4.6% supplied to 17.4% customers 5.0%
-8.1%
1. Administration cost including depreciation and amortisation 2. Revenue, Margin and EBITDA figures reflect continuing operations
22 Good Energy Annual Report 2019 Strategic Report 23 Operating review
2019 performance - continued delivery Our overall customer mix was split 52% domestic against our strategy customers to 48% business customers. This has shifted from 53% domestic to 47% business split in 2018. We In 2019 we continued to deliver against our strategic anticipate this shift in focus from domestic to business Strategic Report objectives and progress on our journey from energy customers will result in our overall volumes increasing generation and supply to energy services as a – assuming seasonal weather conditions follow a business model for the future. We have taken steps normal pattern. towards achieving this goal by further developing our capabilities across smart metering and investing in Importantly, the business market is driven through technology enabled services to support the rapidly quality renewable products and our ability to deliver growing electric vehicle (EV) market. Our shift a more sophisticated solution for businesses than towards business supply was in line with our plans the consumer market. This creates a wide range of to expand our products into the fast-growing potential customers to engage with, particularly in the business markets. SME segment of the business supply market. We have a clear policy focused on delivering profitable growth, built around a fair price and better service. Supply – a continued shift to business Total customer numbers increased by 2.5% to 266.5k. Feed-in Tariff Within that, we saw a continued shift in customer mix in line with our ambitions to focus on the business The FiT scheme closed to new entrants on 31 March sector. Including both supply and Feed-in Tariff 2019. However, for people already signed up to the (FiT) segments , total business customer numbers scheme, FiT payments will continue for up to 20 increased 4.9% to 127.8k, while domestic customer years. We continue to administer the scheme for numbers increased marginally by 0.6% to 138.6k. both our domestic and business FiT customers. The FiT proposition, in which we have one of the largest Customer number growth was driven by an overall market positions, remains an important aspect of our Governance Report increase in FiT customers of 10% to 167k customers. business as it is the foundation of energy as a service The Business supply growth aligns to the longer-term in our business model. strategy of a more balanced earning supply portfolio and is the third year in a row of consistent growth in Business FiT customers increased 3.8% to 120.0k in this segment. Domestic supply meters fell by 8.4% the period. Domestic FiT customer growth increased in 2019. In line with our stated plans, the ongoing by 32.5% to 46.7k customers, driven by an uptake in price sensitive nature of the domestic supply market registrations ahead of the scheme closure in Q1 2019. remains challenging. However, Ofgem’s decision to award a derogation from the standard variable price Generation cap on a permanent basis provides firm validation of Our 47.5MW generation portfolio now consists of our green credentials. six solar and two wind sites, following the successful Our new billing platform, Kraken, is transforming sale of Brynwhilach solar site during the year. The how we serve customers and is expected to drive sale of the Brynwhilach solar site completed in May operating cost savings, customer experience benefits 2019, with the site planned to end up in community and future growth. This will enable more customers ownership longer term. The focus has shifted to to access competitively priced clean energy and delivering value from our existing sites, where technology services. Kraken implementation is in generation levels performed well in the period. We line with the Company’s strategic goals of lowering are committed to working on our existing sites and customer acquisition cost, improving customer delivering value to stakeholders. retention and increasing overall customer lifetime We continue to take a prudent approach to the value value through an improved offering of products of our generation business, reflecting the underlying and services. economics of each asset. We constantly monitor both Electricity supply volumes grew by 5.5% in 2019 to the performance and outlook of all the sites to ensure StatementsFinancial 542GWh, with business supply slightly exceeding that our valuation reflects current market conditions. domestic for the first time. Gas volumes fell by 8% to 532GWh, driven by a reduction in domestic supply meters and not seeing a repeat of the extreme cold weather seen in Q1 2018. Gas volumes in Q1 2019 were 42GWhs lower than the same period in 2018.
24 Good Energy Annual Report 2019 Strategic Report 25 COVID-19 disclosures Market overview Finance Following the ongoing COVID-19 pandemic, we are witnessing unprecedented actions from both Governments and businesses. As a business, we believe that our financial and operational resilience will Revenue allow us to react to these market challenges. We remain cash generative and have a strong cash balance. From a revenue perspective we expect to see a reduction in energy supply revenue on account of Operationally, our UK focused business is well placed to respond. The implementation of our new customer reduced demand in commercial supply, but this is expectedto be partially offset by an increase in domestic technology platform is progressing as planned, which provides us with further flexibility to operate and supply demand. Strategic Report deliver all our products and services to customer. Cashflow Energy market Clear quantitative evidence to show the impact on domestic demand for Good Energy’s customer base is Good Energy and the rest of the UK energy suppliers will have to play their part in supporting the UK only beginning to emerge. It is clear that there will be an increase in domestic demand, and this will be a population through the COVID-19 crisis. Specific measures on PPM (pre-payment meters) will have natural offset to reduction in commercial demand. However, whilst demand will almost certainly increase, limited impacts for Good Energy due to our small PPM customer base (<1k meters, and <1% of our total people’s ability to pay bills has the potential to be reduced. Cashflow is a higher risk than gross margin when meters on supply). considering the domestic supply business. However, debt windows and reassessment of bills - including pausing payment - will likely have a greater We will continue to monitor our expenditure in a prudent manner. There are several mitigations we have impact. What remains unclear is the scale of our customer base that these measures will affect. We have already put in place to ensure a good cashflow position is maintained, including a reduction on discretionary undertaken a detailed stress testing approach to understand a range of potential implications. spend in the short term.
Business continuity Uncertainty and stress testing We have been extremely focused on activating our operational response plan and now have our full Uncertainty around the scale, timing and impact of the coronavirus pandemic means it is difficult to give business of just under 300 people working remotely. We are operating our core billing, supplier payments, meaningful external guidance for forecasts in the year ahead. We have analysed a range of outcomes for forecasting, trading and customer contact normally although we are needing to make adjustments, such as the current year for different sales scenarios. The resulting stress test is very useful; it gives a clear picture encouraging substantial self-serve on meter reading etc, given those 3rd party face to face operations are of the possible effects on our balance sheet and finances and points to the practical steps we can take to being substantially curtailed. ensure the Company is best places to cope with all imaginable outcomes. As of Friday 20 March 2020, GE transitioned to a 100% remote workforce. This was actioned in We have performed stress testing on our cashflows, to determine what is the maximum strain that the several waves, to ensure continuity was uninterrupted, particularly within customer care. Good Energy is business could bear over the next 12 months in respect of the potential impacts of COVID-19 and the full behaving in an agile way, by identifying employees within the business who may be less busy as a result redemption of Good Energy Bonds II in June 2021, against cash requirements, financial covenants with Governance Report of COVID-19 and training them to provide additional support to customer care, either in data analytics or trading counterparties within the supply business and debt covenants within the generation business. customer interaction. Early impact The business works predominantly on cloud-based servers, and already had in place several online communication tools, including Skype for Business and Microsoft Teams. Initial findings have shown that BAU We have currently seen no deterioration in direct debit or pay on receipt of bill cash receipts from can be achieved, despite the lack of physical proximity. This includes the customer care team, who are now customers since the start of the COVID-19 pandemic and lockdown. 100% remote working and have seen almost no difference in call waiting times or customer service levels. Early indications have shown a 10-15% increase in demand for domestic electricity and gas with this We expect to be able to maintain this level of service, as we become more accustomed to remote working. segment accounting for approximately 55% of Good Energy’s supply cash flow. We have seen a reduction Wider business functions continue to operate as normal whilst working remotely. Forecasting, trading, sales of approximately 25% in electricity demand from our business customers. This segment accounts for and ancillary functions have all been successful in transitioning to this new model. approximately 45% of Good Energy’s supply cash flow. It is a sector diversified portfolio of c.8000 customers including a number of prestige clients. We have currently seen no deterioration in direct debit or pay on Generation sites are likely to be unaffected. Sites can operate without human intervention, and contractors receipt of bill cash receipts from customers since the start of the COVID-19. However, as the lockdown will be able to attend site for any required maintenance as they are exempt from travel restrictions due to period continues, and an economic downturn commences we are expecting an impact on business and utilities being an essential service. domestic customers’ ability to pay for energy usage.
Billing and customer relationship Stress testing and going concern The business has been proactive in discussions with several of its key customers. Conversations have been As with all businesses, we have spent considerable time assessing the potential impacts that COVID could held with our largest customers, where we remain confident in their liquidity and ongoing ability to pay. This have on our operations. Despite the limited impact that we have seen to date, we continue to monitor a represents a significant portion of our business portfolio. range of potential worst-case scenarios. Further details can be found on page 72. For those smaller businesses who are more likely to see negative impacts from COVID, we are working with them to understand their needs. For many who have been forced to postpone operations, we will look Summary for accurate meter readings. This will ensure that any bills they receive will be for lower, actual volumes We believe that Good Energy Group has a resilient financial and operational platform after taking the StatementsFinancial consumed, as opposed to relying on estimates based on historic consumption. This provides customers with impact of the COVID-19 outbreak into account. This is due to a strong cash position, the offset of demand actual figures, and not larger potentially more daunting figures based on incorrect consumption estimates. impacts between Domestic and Commercial supply, mitigations in place for potential cashflow issues, and These conversations are ongoing across all of our business customers, with our sales and billing team successful business continuity plans already in place. being proactive. Further information can be found on page 72. We are asking customers to self-serve meter readings where possible, due to the operational challenges with sending technicians out on our behalf. We have seen positive results to date. Working closely to understand our customers’ needs will ensure that we can partner with them during these uncertain times.
26 Good Energy Annual Report 2019 Strategic Report 27 Key risks
Risk management approach: Our business model Good Energy recognises that effective risk management is critical to enable it to meet its strategic objectives. Good Energy has two principal business areas: Supply and Generation. Our Supply business where we
serve over 260,000 domestic and business customers and match all the electricity used by them with power Strategic Report The Company has a clear framework for identifying and managing risk, both at an operational and strategic sourced directly from 100% renewable sources. Within Supply, our Feed-in Tariff (FIT) administration services level. Its risk identification and mitigation processes have been designed to be responsive to the changing help households and business meet either all or part of their electricity demand directly from their own environment in which it operates. The impact of emerging risks on the Company’s business model are also renewable technology. considered and used to make informed decisions, including as to the delivery and evolution of the Group’s strategy. The risks below capture those risks that would have the most significant, adverse impact – based Our Generation business delivers 100% renewable electricity to the UK electricity grid from eight renewable on their impact and / or likelihood – on the Company. While the risks are typical of the risks faced by other energy facilities across the UK that Good Energy owns and operates. energy suppliers, we believe the Company is well positioned to mitigate through a combination of our risk management processes, our control activity and our evolving strategic direction. Operationally, our segments are supported by a common central operating platform which provides functional support to our businesses around sales, IT, marketing etc. This allows us to achieve efficient scalable growth and to use the platforms to cross-sell different services and capabilities to different customer types. In 2020 we will introduce a new customer services platform. Licensed from Kraken Technologies, a subsidiary of the Octopus Energy Group, the new platform will provide significant scalability and flexibility. Built to efficiently Generation Energy supply Sharing services handle large data volumes, it will support the roll out of future smart products and services and provide a single customer view. This will allow Good Energy to play to its strengths in the home and business clean energy services market, through simplifying its customer services processes and supporting a step change in the ability for the company to respond to future customer needs. Supply Supply Generation PPA FiT P&S Our business model relies on some important partnerships and communities, in addition to our customers who B2C B2B range from individual consumers and households, small businesses through to large corporations. Our proposition to our customers is to be a trusted and fair customer-focused supplier of 100% clean energy, who is driven by a clear purpose to power the choice of a cleaner, greener future together. This unique proposition, along with our strong brand, are important elements of our business model. Political In our Supply and Generation business areas, we continue to ensure we have robust continuity planning Governance Report Regulatory process in place to support our operational and financial resilience. The coronavirus (COVID-19) pandemic provides an example of an exogenous shock we have prepared for. We have seen no significant impact from Financial risk management the pandemic to date, however we are monitoring the situation closely while planning for a range of scenarios including changes to current government guidance or policy. The business is confident that it has the flexibility Cyber and plans in place to mitigate sufficiently the material impacts of the crisis.
Wholesale market and price volatility
Weather, forecasting demand and generation
Brand, Trust and Reputation
COVID-19
lower risk lower/medium risk medium risk elevated risk
Power purchase agreements (PPA) Feed-in-Tariff (FIT) Domestic customer supply (Supply B2C) Products & services (P&S) Business customer supply (Supply B2B) Financial StatementsFinancial
28 Good Energy Annual Report 2019 Strategic Report 29 Principal risks and uncertainties
Political risk: In 2018, the government introduced a market-wide Standard Variable Tariff (SVT) price cap. Weather, forecasting demand and generation: On the supply side, temperature drives demand and customer This is a price cap, setting the maximum price that a supplier is allowed to charge for electricity and gas for behaviour. From a generation perspective, the impacts of climate change alongside the annual variability of domestic consumers, focused on consumers that have not proactively engaged in the market and chosen wind speeds and solar radiation, can result in year-to-year fluctuations. Any material reduction could have an a tariff (and are therefore on the SVT, or other default tariffs). On 1 August 2019, Ofgem awarded us a adverse impact on financial results. permanent derogation from the price cap in recognition of the many ways in which the Company continues to support renewable energy generation across the UK. This was recognition of our strong level of customer Accurate forecasting is key, in the long term, to guide informed hedging and thus mitigating against adverse Strategic Report engagement; active decisions by our customers to be on chosen tariffs; and essentially demonstrating to market movements, and in the short term to avoiding imbalance risk. Continued investment in forecasting Ofgem the associated costs of providing green energy. capability and systems has provided Good Energy with good visibility and forecasting performance.
Successfully proving all these factors underpinned our achieved derogation which will apply for the full duration of the price cap until it is removed in 2023. Brand, trust and reputation: Good Energy’s purpose is key to its proposition, damage to its brand and reputation would compromise its competitive position. Good Energy was founded in 1999 to help homes and Beyond the derogation the past 12 months have seen two Prime Ministers, a general election and the UK leave businesses be part of a sustainable solution to climate change. We remain as true to this purpose as we were the EU - Political risk is ever present. As a result, Good Energy will continue to support, lobby and influence twenty years ago. wherever it is appropriate especially when it comes to the Green agenda. This has become more and more important politically and in society and Good Energy will continue to push hard to be part of the national Our community of shareholders, bondholders, generators, customers and employees are helping create a conversation on tackling the climate crisis. cleaner, greener future powered by renewables. From using digital innovation to help UK households and businesses manage their energy usage, to empowering them to generate, store and share their own clean power, we are leading the charge towards a cleaner, distributed energy system. Regulatory risk: The energy industry is constantly changing to keep up with technology, consumer needs & demands as well as government policy (e.g. SMART and EU General Data Protection Regulation (GDPR) etc.). Regulations require the Company to make various changes to its procedures within set timelines and have COVID-19: The worldwide spread of the COVID-19 virus and subsequent impacts on people and businesses already led and will continue to lead to the Company incurring additional time and cost in order to ensure around the World creates unique risks for all businesses. For Good Energy, those risks can be summarised as compliance with these new regulations. cashflow, business continuity, employee welfare and supplier/customer relationships. The Group is actively
monitoring the impact of COVID-19 on its business and has put in place a number of mitigations to minimise A significant volume of regulatory change is a risk to the Company as it can divert time and resource away the impact. The Group has been working with a variety of stakeholders to ensure our UK focused business is from growth initiatives as well as the risk of not meeting regulatory deadlines. The Company has invested in well placed to respond. We now have our full business of just under 300 people successfully working remotely. its regulatory and compliance capability and has enabled the Company to respond effectively to the volume
All core business functions including customer care are functioning as expected although we are needing to Governance Report of change, thereby reducing the risk. GDPR came into effect from May 2018. Good Energy takes the security make adjustments, such as encouraging substantial self- serve on meter reading etc, given those third party of all personal data very seriously and manages the risk in a number of ways to ensure our customer and face to face operations are being substantially curtailed. employee data is protected. There are a number of controls in place to minimise the risks, such as system access rights, mandatory training for all employees upon induction with periodic refresher training appropriate The Group has spent considerable time assessing the potential impacts that COVID-19 could have on our to the employee’s role. Our Guiding Principles set the requirements for all employees and contractors which operations. This assessment has taken in to account the current measures being put in place by the Group include consequences for non-adherence. to preserve cash and reduce discretionary expenditure, and potential reductions in revenues resulting from
the economic impact on domestic and business customers due to lockdown and an expected economic
downturn. Please see the Going Concern disclosure (page 72) for details. . Cyber-attack: As we grow as a business and as technological advances are made, we are increasingly exposed to the threat of cyber-attack. As with many businesses, a successful cyberattack on Good Energy’s network could result in the Company being unable to deliver service to its customers, potentially damaging its reputation, and leading to consequential customer and revenue loss. It could also lead to the imposition of Financial risk management: This has been considered within note 3 in the Notes to the Financial Statements. financial penalties.
Good Energy continually assesses its security policies, standards and procedures and adjusts them, so they are proportionate to the threat profile the Company faces. The Company actively monitors our threat environment utilising the National Cyber Security Centre (NCSC) which provides weekly updates on the latest cyber landscape.
Wholesale market and price volatility: Revenue from sales of electricity and gas are affected by fluctuations in wholesale prices and the associated costs of purchases when market conditions are volatile. Good Energy mitigates this risk partly through the benefits of its vertical integration, and partly via its forward-looking and Financial StatementsFinancial prudent hedging policy.
Due to these policies Good Energy was able to hold prices unchanged through 2019 giving its domestic SVT customer base certainty on pricing.
30 Good Energy Annual Report 2019 Strategic Report 31 Chief Financial Officer’s review
In 2019 we demonstrated financial and Finance costs increased by 1.7% to £4.3m, as overall Earnings and dividend Investment in associate operational resilience with a strong cash debt paydown was offset by an increase in reported finance costs following the implementation of IFRS16. Basic Earnings per share (continuing) decreased The share in loss of associate of £42k in the period, position. We saw strong business growth, to 7.5p from 10.2p as a result of the underlying relates to the equity stake investment in Next Green Strategic Report increased our FIT portfolio and made Underlying profit before tax decreased by 7.9% to performance and decreased profitability. Alongside Car Ltd. Further details can be found in the notes to significant investments in line with our £2.1m (2018: £2.3m). Continuing profit before tax our ongoing investments, we aim to deliver a the accounts (note 18). – after the impact of the one-off Kraken platform progressive dividend policy. Despite a good strategic shift from supply to sharing power. investment – decreased by 45.4% to £1.3m. performance in 2019 and our confidence in the Outlook The tax charge includes the effects of the impairment ongoing business, the Board has recommended Profit and loss deferring the full year dividend considering the The business continues to perform in line with of a wind development project and Substantial management expectations. We have seen no Revenue increased by 6.3% in the period to £124.3m Shareholding Exemption on the sale of Good Energy ongoing COVID-19 pandemic and prudent cashflow management. The operation of the Good Energy significant financial impact from the coronavirus (2018: £116.9m). The increase was driven by strong Brynwhilach Solar Park Ltd. (COVID-19) outbreak to date, however we are business supply growth particularly in the second scrip dividend scheme whilst still operational, will also be deferred alongside the dividend. The Board will monitoring the situation closely while planning for half of the year, offset by lower domestic supply Cash flow and cash generation a range of scenarios including changes to current customer numbers. review this position following the publication of our Our business model is cash generative with £8.1m interim results in September 2020. Government guidance or policy. Cost of sales increased by 10.9% to £92.6m (2018: cash generated from operations (2018: £18.1m), with We believe that Good Energy Group has a resilient £83.5m). This was predominantly driven by a market £10.0m generated before movements in working Investment valuations financial and operational platform after taking the wide increase in commodity prices during 2018, capital (2018: £10.6m). The performance in 2018 impact of the COVID-19 outbreak into account. This As part of our overall financial review, we continue which flowed into the cost base at the beginning of included the recovery from delayed billing and cash is due to a strong cash position, the offset of demand to monitor the fair value of all of our investments the year. There was also a rise in compliance costs, collection during 2017. impacts between Domestic and Commercial supply, through an understanding of the wider environment with significantly increased costs for ROC, CFD and mitigations in place for potential cashflow issues, and There was a cash inflow of £1.4m from investing as well as the underlying economics of all assets capacity market contributions in 2019. successful business continuity plans already in place. activities (2018: outflow £2.6m) following the sale of across the business. As a result of this process, the Gross profit decreased by 5.4% to £31.7m (2018: Brynwhilach solar site in May 2019. This was reduced Board has decided to fully write down the value of In 2020, underlying profit growth will be underpinned £33.4m) driven by the increase in commodity prices, by a net outflow of £7.5m (2018: £9.5m) from
our investment in its remaining un-developed wind by both core business growth and finance cost Governance Report lower domestic gas volumes and planned shift financing activities following the repayment in full farm site. savings. Following increased investment throughout to lower margin but more stable business supply of Good Energy Bond I June 2019 and continued 2019, we are focused on execution in 2020. The investment had a carrying value as at 31 customers. Gross profit margin decreased to 25.5% debt paydown. We will monitor our execution to deliver system December 2018 of £1.3m and is reported under (2018: 28.6%). improvements, digital and online capabilities to drive Discontinued Operations. Administration costs decreased 5.9% to £25.2m Funding and debt future growth and the longer-term strategy. These (2018: £26.8m), excluding the one-off £0.9m impact investments will provide us with a platform for future The remaining £3.6m of Good Energy Bond I was of the Kraken platform investment incurred in 2019, Non underlying costs growth beyond 2021. repaid in full in June 2019. Following the repayment of costs decreased 2.7%. To help offset the increased Bond I, Group finance costs will be significantly lower, An amount of £865k has been incurred as non- compliance and commodity costs the business kept making this a positive step towards lowering the underlying costs within the period. This amount close control over costs in 2019. Through this we Company’s ongoing financing costs and reducing the relates to the one-off expenditure resulting from were able to deliver a £1.6m reduction in like for like gearing ratio over the medium term. implementing the Kraken technology platform and Rupert Sanderson costs versus 2018. associated restructuring costs. Net debt increased 0.5% to £41.1m (2018: £40.9m). Our investment in the Kraken billing platform Chief Financial Officer Excluding the impact of IFRS 16, net debt decreased comprises the first stage of our Customer Services IFRS16 12.6% to £35.7m following the bond repayment. 3 June 2020 2020 project (CS2020). Gearing ratio increased to 68.6% from 68.5%. The business implemented IFRS16 regarding This project enables a move to a more customer Excluding the impact of IFRS16, the gearing ratio treatment of leases as a new accounting standard in centric and less resource intensive customer support was 65.5%. the period, affecting the treatment of leases. Further and billing system. In addition to the initial £0.9m details can be found in the notes to the accounts The Group continues to maintain a robust financial in admin costs in 2019, CS2020 will have further (note 16). position. We look to ensure we optimise our use of cost impacts before delivering significant ongoing capital by continually reviewing the returns on our administration cost savings from its activation in 2020. assets, balancing operating requirements, Total forecast investment in Kraken of £4m will be split investment for growth, and payment of dividends StatementsFinancial approximately equally between cash and non-cash back to shareholders. elements. Operating cost savings are expected to The Group is currently evolving its strategy towards achieve payback of the forecast investment within energy services and remains mindful of the need to 18 months of the full implementation by Q2 2020. It capitalise on strategic business development and is anticipated that the write down of existing systems investment opportunities. Prudent balance sheet and the cash investment into implementation and management remains a key priority. transition will be taken across 2019 and H1 2020. Operating margin decreased to 4.5% (2018 5.7%). Excluding the impact of £0.9m investment costs above, operating margin was 5.2%.
32 Good Energy Annual Report 2019 Strategic Report 33 What we do to achieve our purpose & CSR: Empowering Strategic Report you to use, share, generate and store clean energy Governance Report Financial StatementsFinancial
34 Good Energy Annual Report 2019 StrategicStrategic Reportreport 35 A regenerative business
Sustainability is an increasingly important focus for businesses of all sizes. The UN’s How can the SDGs be achieved? Sustainable Development Goals (SDGs) provide a guiding framework. These 17
goals range across environmental and social factors, from protecting life on land to Economist Kate Raworth argues that sustainable development is nearly impossible under our current economic Strategic Report ending hunger. system: a linear economic model that relies on endlessly extracting resources. To change this ‘degenerative’ linear economic system, Raworth proposes a ‘doughnut’ model for the economy Good Energy is a founding member of the UK Stakeholders for Sustainable Development that is based on the SDGs, covering environmental and social factors with a safe space in between. Being — a network of organisations working together to act on the SDGs in the UK. ‘within the doughnut’ means meeting the social needs of people, whilst not having a harmful impact on the planet. She explains that there are several levels of responsibility a business can take for its social and environmental impact: do nothing, do what pays, do your fair share, do net zero, or be regenerative. Two of the SDGs are at the core of everything we do: Being regenerative means making a positive impact for both people and planet. People: Affordable & clean energy (Goal 7) Good Energy is aiming to be in this category — we want to go beyond ‘net zero’ and have an actively positive impact on the world. Empowering our customers to be part of the solution to the climate crisis is central to our purpose. We do this by sourcing 100% of our electricity from certified renewable sources. And we continue to support households and businesses to benefit from generating their own renewable power — a distributive approach to increasing access to affordable, clean energy.
limate change Planet: Climate action (Goal 13) ge Fre n ironmental ceili s ha nv ng hw We started life as a business to fight climate change. This informs how we operate as a company on c a se te u r a day-to-day basis. We work hard to accelerate climate action in everything we do; from lobbying u d t space s n us fo e Health Income government to take stronger policy measures to public petitions in support of clean power. a nd r h a um fe a a l found s ocia ation n it e y Governance Report h ater p T h s s ncome o s i o Food t l p r
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How Good Energy fits the model StatementsFinancial The social foundation of our business is to provide energy in a way that doesn’t contribute to – and works to combat – climate change. In doing so, we also strive to positively engage with other elements of Raworth’s model. Altogether, our aim is to become a fully regenerative business and have a net-positive impact across the SDGs.
36 Good Energy Annual Report 2019 Strategic Report 37 Our environmental impact: combatting Our wind farms and solar parks The decarbonised energy system will be built on technology-enabled energy services, allowing the flexibility climate change with clean energy needed for a 100% renewable electricity grid in the UK. We are applying this vision of the future energy system to how we serve our customers. All underpinned by our own wind and solar parks which are the bedrock of our business and contribute to the UK’s renewable generation capacity.
Zero-carbon Britain Good Energy owns and operates six solar parks and two wind farms. We’ve taken care to consider how the Strategic Report biodiversity of our sites can be protected and enhanced where possible, and also how our sites can benefit Good Energy has always set an example for what Price Cap Exemption the communities in which they are based. is achievable in clean energy for the UK. When In 2019, Ofgem introduced the price cap on default the company was first founded, no other energy Delabole Carloggas energy tariffs, designed to protect consumers who company was doing 100% renewable electricity. Location: Cornwall Location: Cornwall are on the most expensive standard variable tariffs – We created HomeGen in 2004, allowing people to often without realising it. Capacity: 9.2MW Capacity: 8.3MW get paid for generating clean power at home, which Homes powered: 6,4001 Homes powered: 2,200 became the blueprint for the government’s Feed-in Good Energy was one of three green energy 2 Tariff scheme that led to an explosion of hundreds suppliers to be awarded a temporary derogation to Community fund: £9,200 per year. Biodiversity: Diverse grassland, butterfly and of thousands of small-scale renewable generators. the price cap when it was first introduced. After a Projects supported include new fencing moth friendly planting, bird and bat boxes With the UN’s next international climate change lengthy application which went into every aspect of for the allotment society and installing on existing mature trees. conference, COP26, due to take place in Glasgow, our business the regulator awarded us a permanent solar PV at the cricket club. Community fund: £8,300 per year. the country has an opportunity to show global exemption from the cap, recognising we offer Projects supported include installing a leadership. material support to new renewable generation in the Hampole new heating system in a local community UK. And our customers actively choose to support this Location: Yorkshire centre and providing community waste We intend to build on our historical role in clean unique service when they join one of our tariffs. and recycling bins. power – and lead further in the ever more pressing Capacity: 8.2MW areas for decarbonisation: heat and transport. The exemption proves that Good Energy is different, Homes powered: 5,400 Woolbridge offering a service to customers which can’t be Community fund: £8,200 per year. Location: Dorset Changing the energy conversation matched by the vast majority of energy suppliers. Projects supported include a public wildlife garden, improvements to local churches Capacity: 5MW We work hard to inform the debate around energy and support for community action and Homes powered: 1,350 Governance Report and climate change. The market is changing rapidly, neighbourhood watch groups. Biodiversity: Wildflower meadow, and consumers need to play a central role in shaping sheep grazing. Rook Wood the country’s energy mix. We are supporting people Community fund: £5,000 per year. to do this by calling for greater transparency about Location: Wiltshire Projects supported including refurbishing green energy tariffs. Capacity: 5MW a library, improving a local skatepark and Homes powered: 1,250 installing solar PV at three primary schools. The fight against greenwashing Biodiversity: Wildflower meadow to support Creathorne Farm Good Energy has been leading the fight against pollinating insects, bird and bat boxes on greenwashed energy tariffs for the past three years. existing mature trees. Location: Cornwall Capacity: 1.8MW This is the practice of buying renewable certificates, Community fund: £5,000 per year. called REGOs, separately from the power they relate Projects supported include a garden project Homes powered: 1,350 to at a very low cost. Many energy suppliers are using at the local primary school and community Biodiversity: Wildflower meadow to support the loophole to offer customers ‘100% renewable’ coffee mornings. pollinating insects, sheep grazing. tariffs without buying any renewable power. Community fund: £60,000 grant split Crossroads In the past year, the campaign has drawn the between the parishes of Poundstock Location: Dorset attention of both the regulator, Ofgem, and Which? and Marhamchurch. magazine. In September, Which? published a report Capacity: 5MW on the problem, calling out the majority of energy Homes powered: 1,250 Lower End Farm suppliers and giving Good Energy the highest ‘dark Biodiversity: Wildflower meadow to Location: Wiltshire green’ rating for its power. support pollinating insects, sheep grazing, Capacity: 5MW Financial StatementsFinancial Following this success, which was widely covered on-site beehives. Homes powered: 1,300 in the national media, Ofgem has revisited Community fund: £6,000 per year. Biodiversity: Enhancing existing hedgerows greenwashing in its new Decarbonisation Action Plan. Projects supported include the installation to support birdlife, diverse grassland, The plan explicitly states: “We are aware of growing of solar PV on the roof of a local school and wildflower meadow to support pollinating concerns about ‘greenwashing’…we expect suppliers energy-efficient heating for the village hall. insects, sheep grazing to be transparent about what constitutes a ‘green Community fund: £7,500 per year. tariff’ and we will undertake work to ensure that Projects supported include enabling consumers are not misled.” Worton and Marston Village Hall to run free community events, church repairs and buying a community defibrillator.
1 Data for number of homes powered is approximate and based on average annual household electricity consumption for 2017 of 3,750.08kWh (Source: BEIS: Average annual domestic electricity bills by various consumption levels 2017) 2 All community fund amounts rise with inflation
38 Good Energy Annual Report 2019 Strategic Report 39 Carbon neutral gas Sichuan biogas Investing in innovation One Point Sichuan is one of China’s poorest provinces, 2019 saw the launch of One Point – our simple, As well as 100% renewable electricity, we where average annual incomes equate The clean energy sector is constantly evolving, end-to-end service that supports businesses wanting have thousands of customers signed up to to €500. The province was also struck by and we want our customers to be a part of it. to offer EV charging to their staff, customers and our carbon neutral gas. an earthquake in 2008, which left nearly visitors. A pilot scheme was put in place at the
That’s why we’re working on new products and Strategic Report 5 million people homeless. services to help customers support a clean energy Watergate Bay Hotel in Cornwall, with Good Energy What makes it carbon neutral? Xuyong Biogas helps communities to rebuild future, along with investing in new technologies managing the installation of four charging points on the premises. Read more about One Point on In 2019, we worked to increase the by installing household biogas digesters – and research. page 21. proportion of renewable biogas we’re able and providing training on how to maintain to supply our customers from 6% up to 10%, them. This allows farmers to use animal Zap-Map with 10% representing the percentage of the waste to generate clean fuel, reducing Smarter smart meters In May 2019 we announced our investment UK’s gas demand that it would be possible to the need for households to spend money in Zap-Map, taking a majority stake in the We have always believed in the power of smart source from UK-generated biogas. As of 1st on polluting coal. Bristol-based EV charging platform. The meters to change people’s relationship with energy. April 2020, all our gas tariffs offer 10% biogas. As well as improving access to clean, start-up simplifies the driving experience The next generation SMETS2 meters will offer Biogas – also known as biomethane – is renewable energy, this project creates new for EV owners, helping them share and detailed insights and control over our energy usage. generated by breaking down organic matter job opportunities to become biogas installers. pay for charge points. The app is widely This technology is crucial to supporting a zero- such as farm waste in an anaerobic digester. used among the UK’s 280,000 EV drivers, carbon energy grid. We are currently piloting our The benefit of using biogas - rather than Turkey commercial-scale biogas and we are helping the company develop smart project with over 100 customers, ensuring we natural gas is that it maintains the carbon new products for the fast-growing market. get the project right before rolling out nationwide. This project works with one of Turkey’s largest balance. This means that, when it’s burned, You can find more detail on our Zap-Map dairy companies, which has the capacity to it releases the same amount of carbon investment in the Strategic review, on process 500 million litres of milk annually. HAVEN: using EVs for home energy storage dioxide that the organic matter used to page 20. We completed an innovative research project produce it absorbed while it grew. Burning Waste from the plant and surrounding with Honda, Upside Energy and Salford University. natural gas, however, releases carbon farms is used to create biogas, which is The study was designed to examine the value of dioxide locked up millions of years ago. then burned to create renewable electricity. ‘vehicle-to-grid’ (V2G) technology, where an electric This grid-scale generator is expected
As well as using biogas, we neutralise vehicle is used alongside a special charger and other Governance Report to generate over 14.9GWh annually. emissions from all the gas our customers home systems: battery storage, solar panels, a smart That’s equivalent to the power demand use by investing in verified carbon reduction hot water tank, and heat pumps. The technology is of 4,500 typical UK homes. schemes, in partnership with ClimateCare. designed to maximise efficient energy usage, save All three projects we support have received As well as producing clean power and money, and cut carbon emissions. Gold Standard accreditation, which is an helping to make Turkey’s power grid greener, The study concluded that the technology could internationally recognised benchmark for benefits include the production of quality save up to £300 a year by enabling households to carbon offset projects. fertilizer and providing new green jobs. store and share electricity in their car’s battery. But the new clean energy technology faces India biogas significant roadblocks, with fresh policy needed In India, more than 1,000 women and to enable its future. children die every day from exposure to smoke produced by household cooking with solid fuel. This project works with rural districts to install biogas digesters. These turn a readily available fuel source, cattle dung, into clean, renewable energy for cooking. Benefits include reducing deforestation from felling trees for fuel, protecting biodiversity and improving health within the home. “Vehicle to grid is the missing link between electrification of transport The digestate produced at the end of the and decarbonisation of our grid and our homes. V2G is where solar biogas generation process can also be StatementsFinancial used as crop fertilizer. power was 10 years ago – the technology exists but it requires innovation, investment and joined up thinking. With the right policy support it could become another clean technology British success story.”
Juliet Davenport, CEO & Founder, Good Energy
40 Good Energy Annual Report 2019 Strategic Report 41 Our customers
Eco-conscious households Sustainable large businesses: Jay and family made the switch from a ‘Big Six’ supplier to Good Energy over 4 years ago. Opera North “That’s what really stood out. Strategic Report “The reason we chose and have remained customers with Good Energy is because we care about Opera North chose Good Energy Good energy knew more about the environment and want to be part of the green revolution, knowing all energy provided by the as their supplier in 2017. And since the source of their electricity company is genuinely 100% renewable.” switching to renewable electricity, the National Opera company has seen than the other suppliers.” workplace culture transform into one Home generators that’s far more energy conscious. Jamie Saye, Opera North At Good Energy, we administer Feed-in Tariff payments for over 150,000 sites. This makes us the only When looking for a new energy supplier UK energy company that has more customers that generate their own power than who buy it from us. Jamie Saye, a Senior Technician at Opera Bob is one of our long-standing Feed-in Tariff customers. North, was impressed that we knew where “When we installed our solar panels in 2007 (I believe we were the first to do this in Alton every kW came from. “That’s what really Hampshire) it was clear our energy supplier could not handle the changes. Good Energy were stood out. Good Energy knew more about recommended and we soon joined. the source of their electricity than the other suppliers.” We decided also to invest in what GE was planning to do so purchased shares and later bonds as well. This was to support the company’s schemes for wind farms and community action. We had The Opera North facilities team saw the also put in Thermal Solar panels and together with our PVs got a good initial FiT. We consciously introduction of renewable electricity as adapted our lifestyle to minimise energy use (and cut back on material use as well). I have an opportunity to also save energy at purchased an electric vehicle and have also installed a Tesla Powerwall storage battery. the organisation’s headquarters, Premier House. The first step was encouraging staff My wife and I are active in our town, joining a climate action group and local environmental group. to think about how they could cut their It is noticeable that the arguments against tackling climate change have shifted considerably in own electricity use. Thanks to Good Energy recent years.” providing half-hourly data Jamie was able Governance Report to produce graphs showing how their actions were making a difference. Small green businesses: The Garden The Garden restaurant is just down Knowledge is power the road from Good Energy’s offices in Opera North uses our half-hourly data Chippenham. Owner John says customers visualisation portal. It allows businesses to and staff like the fact that it runs on 100% access more than 75 online reports to find renewable power. out how and when they are consuming “We are always striving to be green and electricity. In addition it can compare to do things that help the world go round. data from the past two years to show year Having Good Energy as our energy on year trends and average consumption provider has helped us to become wholly ranges. Jamie says the data from Good sustainable. If we weren’t using renewable Energy has been a game changer, energy I feel we would be missing out on making them fully informed consumers. something very important. It’s great to open people’s eyes and make them understand that it’s not that difficult to be green. I think the more and more we let people know about our relationship with Good Energy, the more Other businesses to have joined us in 2019 include: and more people will enjoy what we do, and come to us.” Financial StatementsFinancial
42 Good Energy Annual Report 2019 Strategic Report 43 Our independent generators Our generator map Generation type 20 years and still flowing: our long relationship with Glen Lyn Gorge Glen Lyn Gorge is just one of 1,500 independent renewable generators that we source power from. One of our longest running partnerships is with Glen Lyn Gorge hydroelectric plant in Devon. This map and the table show the number and type A small-scale hydro scheme with a capacity of 300W, Glen Lyn generates 1.5GWh per year. of generators we buy from across the country. Strategic Report Solar Wind Hydro Bio The scheme came online in 1987 and was the brainchild of Ken Oxenham. His son Matthew now runs the plant and signed up with Good Energy not long after we started – making Glen Lyn one of our 1. North 17 55 22 2 first independent generators. Scotland For two decades, they have relied on us to make sure they get the best deal for their power through our PPAs (Power Purchase Agreements). We also handle Glen Lyn’s monthly ROC (Renewable 2. South Obligation Certificate) and REGO (Renewable Energy Guarantees of Origin) submissions to Ofgem. 17 45 10 6 Scotland We ensure they arrive before the deadlines and that Matthew is paid on time.
Matthew is a committed environmentalist and avoids computer use where possible; “I’ve chosen to 3. North make a principled stand on computers because of the amount of energy they use”. Western 29 12 19 4 England All our dealings have been through the post or over the phone because that’s the way Glen Lyn prefer it and we’re happy to accommodate that. “I stay with Good Energy because of my principles 4. North and theirs, particularly their commitment to renewable energy”, says Matthew. “I have only positive Eastern 20 5 6 3 things to say about Good Energy”. England 1 5. Merseyside & North 31 14 25 6 Wales
6. Yorkshire 47 23 4 2 2 Governance Report
7. West 78 14 4 4 Midlands 3
4 8. East 78 14 4 4 Midlands 6 9. South 35 25 7 5 5 Wales 8
7 10. Eastern 123 11 1 2 9 10 England
13 11. South Western 260 51 7 6 12 England 14 11 12. Southern 185 51 4 5 England Financial StatementsFinancial
13. London 10 - - -
14. South Eastern 128 - - 2 England
*Based on data from October 2019
44 Good Energy Annual Report 2019 Strategic Report 45 “At BAFTA we have a responsibility to lead the film and television Partners for change industries towards a wholly sustainable future and this is an important step in that journey. We are delighted to be working with Good We work with sustainability organisations across different sectors. Together, we’re helping businesses of all sizes to reduce their environmental impact and tackle the climate crisis. Energy to achieve this. Strategic Report BAFTA Albert Kevin Price, BAFTA Overseen by BAFTA (British Academy of Film and Television Arts) the Albert consortium is the UK’s flagship thinktank on sustainability in film and television. We work with them to enable more creative organisations and production studios to cut their carbon emissions by switching to 100% renewable electricity. Through Albert’s Creative Energy Partnership, Good Energy has already signed-up BAFTA as well as TV companies including Baby Cow Productions, Mammoth Screen and Directors UK to power their production spaces and head offices. BAFTA’s Chief Operating Officer Kevin Price thinks industry needs to take a lead when it come the climate emergency.
“A long journey starts with a single step and I think what’s been brilliant about Albert is that every week we’ve got examples of progress being made. And those are all small steps towards a much bigger endeavour. The more steps we take the more confidence there is that we can make a difference.” Governance Report
We work with a range of organisations We’re also proud to work with charities and created to promote sustainability in various organisations that share our commitment industries, including: to tackling the climate crisis and creating a cleaner, greener future. Financial StatementsFinancial
46 Good Energy Annual Report 2019 StrategicStrategic Reportreport 47 Reducing our business’s environmental impact
Everything we do is about reducing society’s impact on the environment. But inevitably there are elements of Ethical, sustainable procurement running a business that do have an impact. We track and work to reduce these elements to make sure we’re We’re proud to be on the Ethical Consumer Best Buy list and strive to put ethical choices at the core of our treading as lightly on the planet as possible. business operations. Strategic Report Measuring and mitigating our carbon emissions We also aim to procure day-to-day office essentials as sustainably as we can. Our coffee comes from Cool Earth, which supports indigenous communities to stand strong against rainforest deforestation. The We have achieved ISO14001 accreditation, which confirms that we’re meeting international coffee that we buy helps protect 168 acres of rainforest in Asháninka in the Peruvian Amazon, storing 1014 standards for measuring and continually improving our environmental performance. tonnes of carbon.
Corrected total 9 2
Reported total 1 1 2
Total 9 1 1
1 Direct emissions 2 Indirect emissions from electricity used Indirect emissions such as employee (0, due to 100% renewable electricity self-supply) travel & procurement
A correction to our 2018 figures Governance Report We work hard to make sure our emissions reporting is as detailed as possible. More up to date information about employee travel for 2018 became available, which has allowed us to provide corrected figures for the year.
2019 reductions We’re pleased to report an emissions reduction of 12% between 2018 and 2019. This was mostly due to reductions in our Scope 3 emissions, which covers factors such as emissions of companies in our supply chain as well as employee travel. From our Green Travel Allowance to increased home working, we’re exploring ways to continue making progress in this area. We continue to neutralise emissions we can’t yet avoid by investing in the carbon reduction schemes we support through our carbon neutral gas.
How the Green Travel Allowance is driving down emissions The daily commute can rack up a considerable cost not just in money, but in carbon. Colleen and Kira were looking to reduce theirs by car sharing. In 2019 we introduced a Green Travel Allowance to reward people that choose a greener way to commute, whether that’s car sharing, driving an EV or travelling by Financial StatementsFinancial public transport. “It’s a great way to encourage people to think about how they travel”, says Colleen. “Car sharing just makes sense – it reduces your running costs and it means there’s one less car on the road”. Thanks to our annual travel survey, we were able to measure that due to shifts in commuting, we were able to save 65 tonnes of carbon emissions. “It’s great to know that some relatively small changes to my lifestyle do actually have an impact”, says Kira. “Being able to reduce my own carbon footprint in itself is a good feeling, but to get recognition from your employer for making the choice to travel sustainably is even better!”
48 Good Energy Annual Report 2019 Strategic Report 49 Our social impact: an ethical business Education Working with schools From the moment people join Good Energy, we focus Gender equality on providing all they need to work in a way that As sustainability issues are a regular part reflects our values: Straightforward, Inclusive, Fair and Gender pay gap reporting of the school curriculum, Good Energy’s
Determined. This is how we bring our purpose to life. We’re committed to tackling our gender experience as an ethical company is sought Strategic Report Here are just a few examples of how we put our pay gap and making sure we have an after. Our people often go into local schools values into action: equal gender balance at all levels of our to give talks about climate change and organisation. Our overall workforce is made renewable energy, and over the past year our experts have spoken to hundreds of • Having an inclusive workplace with people up of 52% women to 48% men. students. We are building on this work to of diverse backgrounds and characteristics. We already have equal numbers of men create a wider educational programme for We include Diversity and Inclusion training in our and women in our most senior board and primary and secondary schools. induction programme, bringing this commitment executive team roles. We are working to life in practical ways so that it can inform how towards a balanced gender split in our Working with universities Physical wellbeing we serve our customers and work together. middle management roles, aiming to have • Providing leadership training to all our managers a senior leadership team that is at least 30% Good Energy CEO, Juliet Davenport, We offer a range of benefits designed to support our in giving straightforward, useful feedback that female by April 2022. regularly speaks at events for students and people’s wellbeing: lunchtime sports clubs, subsidised encourages their teams to achieve their potential. higher education professionals. In 2019 she local gym memberships, showers and bike lock ups Our mean gender pay gap for 2019 was just spoke for MBA students at the Said Business to support active commuting – as well as a health • Appointing Culture Champions from across under 27%. The reason we have a pay gap is School, discussed the future of the retail insurance scheme which gives people financial the business to play a key role in developing that we have fewer women than men within energy sector at the Aurora Spring Forum support towards medical and wellbeing treatments. our people policies, infrastructure, employee our middle manager population, particularly at the University of Oxford and spoke at the By supporting green travel for our people and engagement initiatives and more. in science, technology, engineering and Sustainability in Higher Education conference working to improve access to clean transport more maths (STEM) related roles. To close the at the University of Wales. Juliet also featured widely, we’re also playing our part in improving air gap, we’re stepping up our efforts to recruit on a panel about reducing urban transport Fair pay quality in towns and cities. women in this area and develop more emissions through building links with the To reflect the skill level of our roles, our women within the business to middle and renewable energy sector as part of the people receive a rate of pay that’s senior management. London School of Economics Cities Series. Governance Report substantially above the wage set by the Real Women in energy Living Wage Foundation. The pay for every Health role is benchmarked against equivalent jobs Our CEO, Juliet Davenport, started Good to make sure that we pay people fairly. Energy in a market dominated by men. 20 Mental health and wellbeing years later and out of over 50 UK energy In the UK, around one in four of us will Supporting our local community suppliers, you can still count the number led experience mental ill health in any year, by women on one hand. and we want to make sure our people Good Energy is based in Chippenham, feel comfortable asking for support Wiltshire. As well as being one of the Promoting the next generation of women to when they need it. biggest employers in the area, we’re always take on STEM subjects is a key part of fixing exploring ways to have a positive impact on this problem. That’s why we have teamed We already offer free access to our surrounding community. We continued up with the STEMettes, a UK social enterprise counselling services through our Unum our sponsorship of Chippenham Rugby seeking to encourage more girls to pursue Lifeworks Employee Assistance programme. Football Club, supported town cultural events careers in science, technology, engineering We have also teamed up with MHFA and teamed up with local schools to talk and maths. England to train 11 people across the about clean energy, climate change and 2019 was our second year of collaborating business to be mental health first aiders, as careers in STEM subjects. with the charity which involved a workshop well as offering mental health awareness with local secondary schools in Wiltshire. The training to every one of our people. day-long event included a mini-hackathon, Building on this, in 2019 we worked with app designing and talks from women across the Time to Change social movement, the company. to endorse their mental health pledge. By signing the pledge, businesses agree Financial StatementsFinancial “It is vital to run stem experience days to change the way they think and act with companies like good energy about mental health at work. because only 21% of the UK’s stem workforce is female. Stemettes’ mission is to raise this number to more than 30%.” “We want to make sure mental health is recognised as being as important as physical Lucy Cox, Community & Schools Manager, health. And our mental health first aiders are there to give people a helping hand. This Stemettes could simply mean having a chat over a cup of coffee or offering advice on how to access further support.” Fran Woodward, Director of People & Culture
50 Good Energy Annual Report 2019 Strategic Report 51 Voice: providing a platform COP25 for change Our CEO and Founder Juliet Davenport spoke at We have always stood for action against the UN’s global climate conference COP25 in Madrid. the climate crisis - and for enabling people Taking part in a panel as part of the Energy Action to take action themselves. In 2019, we Event, Juliet explained that “one of the roles of an Strategic Report Strategic Report were inspired by the rise of the youth organisation like Good Energy, is to be in the room climate strike movement sparked by Greta when we are talking about possibilities.” Thunberg’s solo school strike. As the school strike movement continues to grow, we want to amplify their message. We worked with our local youth climate group in Bath, arranging a takeover of our social media feeds on the day of the first global school strike in March 2019. We also posted an interview with a youth climate activist on our blog, and attended the September global climate strike to interview protesters and share their views. We have continued to support the strikes, including encouraging our people to attend the strike in Bristol March 2020 to hear Greta Thunberg speak.
“In my last job I had to take a day
off work to go on the last climate Engaging customers in our purpose strike. My passions are now aligned Many of our customers are committed to helping with my company’s and I hope that create a cleaner, greener future in any way they can. Governance Report as a collective we can encourage We aim to share news of how the energy industry is Governance Report more people to show their support changing and, when we can, encourage people to stand alongside us in driving change ourselves. for making a difference”. In 2019, we challenged the proposed tax increase on Johanna Pettipher, Good Energy low carbon energy generation and storage systems Accounts Specialist to 20% - while coal was set to remain at 5%. After setting up a petition we went out to our customers, Sponsoring the first Local Conference of Youth who helped us secure over 18,000 signatures. Unfortunately, the planned tax increase is set to go In November, we were the exclusive sponsor of ahead. But we won’t give up the fight for a zero the first UK Local Conference of Youth, part of an carbon Britain. And neither will everyone that has international programme coordinated by the United joined us. Nations Framework Convention on Climate Change. Run for and by young people, over the course of a weekend attendees worked together to shape a policy proposal for tackling climate change. This fed into a global Conference of Youth policy to help inform the agenda for COP25, which took place the following month in Madrid. As well as sponsoring the event, Good Energy ran a workshop introducing renewable energy, clean technologies and our vision for a 100% renewable Britain. Financial StatementsFinancial
52 Good Energy Annual Report 2019 StrategicStrategic Reportreport 53 Our people
We couldn’t work towards reaching 100% renewable energy without the dedication and expertise of our people. Get to know some of them – from their roles here at Good Energy
to how they put our commitment to being green into action outside the office. Strategic Report
Robbie India Trading Analyst, Trading Employee Engagement & Portfolio Management Coordinator and Personal Assistant to Fran Woodward, Robbie first walked into People & Customer the Good Energy office for Operations Director his school work experience at age 16. After studying From sourcing on brand hard climate science at university, hats to arranging ‘pint pulling’ he came back to join us. training for the Exec team ahead Starting in our domestic Feed-in Tariff of company parties, no two days are team, Robbie moved into Levelisation to work on the same for India. Her role is focused on making claiming FiT payments and paying them out to our sure everyone at Good Energy feels like part of 140,000 FiT sites. He’s now part of the trading team one team – and can get together to celebrate our and loves the new challenges this presents. successes. India also works with our team of Culture Champions, who explore ways to make sure Good “The best part of my job is how my role naturally Energy is an engaging, supportive place to work. keeps me up-to-date with the world, energy market and policy. That and being able to work “The best part of my job is how wide ranging it is.
with lots of other like-minded people keeps me I love that every day is completely different. Governance Report feeling really immersed and interested every day. My whole career so far has been spent in I like to think I’m pretty green. I walk or catch renewables. My first job out of university was as a the train almost always. And I’m a Good Energy renewable energy planner. There are a couple customer for power and gas – and have solar of wind turbines that I got planning permission for panels on my roof.” in Cornwall. Today, as well as working at Good Energy I’m a customer and shareholder.” Nicola Connor Senior Operations Manager, Service Desk Analyst Customer Operations Apprentice, IT & Digital
It’s safe to say that Nic is At Good Energy we’re good with people. Having pleased to support the worked at Good Energy apprenticeship scheme, for six years heading up our which Connor joined us business account management through in 2019. As a Service and sales support teams, Desk Analyst, Connor helps make she also volunteers for a mentoring sure our people have the IT equipment charity. Nic’s latest role includes supporting the and software they need to do their job. implementation of our new billing system. Every day, she and the team focus on providing our business “I’ve always wanted to go down the customers with the best possible service, which is apprenticeship route as I just wanted to get stuck what keeps many with us for the long term. into working life. The best part of what I do is
getting the satisfaction of fixing something and StatementsFinancial “It’s amazing when the team receive feedback knowing that I’m helping someone by making directly from customers and I get the chance their job easier. to read or hear it. It makes me so proud to work with them. I do my best to recycle and put rubbish in the right bins. I also walk to work and, at the When it comes to being green in my own life, moment don’t drive.” like most people I’m reducing how much plastic I buy and try to recycle what I can. I’ve have also changed all the bulbs in my house to LED to save on energy and I turn absolutely everything off!”
54 Good Energy Annual Report 2019 Strategic Report 55 Governance Report
Board of Directors 58
Governance & Directors’ Report 60
Audit & Risk Report 71
Remuneration & Nomination Report 75
Independent Auditors’ Report 88
56 Good Energy Annual Report 2019 Strategic Report Governance Report Financial Statements 59 Governance Report Governance Nemone Wynn-Evans - Non-Executive Director (Independent) Director - Non-Executive Nemone Wynn-Evans Nemone in the financial services sector, experience With extensive business audit, management, risk skills across of range brings a broad relations investor governance, finance, corporate corporate development, a member the Risk Committee, Chair of currently She is and marketing. Shepherds of and Director Senior Committee is Independent the Audit of of a range across roles Friendly a number Society. holds of Nemone also Building & Rugby at Hinckley companies, a Non-Executive including as a Board is & Risk Committees, the Audit on both sits she Society where the Commercial LLP anda member is of Partners at SORBUS Advisor the of a Fellow also She is University. at Coventry Committee Advisory Securities and of Investments. Institute Chartered London in the City of Skills and Nemone began Expertise: her career regulated and PRA/FCA/FSA PLC listed with many and worked has a of on the main board a Finance Director as companies, having acted exchange. stock Emma Tinker – Non-Executive Director (Independent) Director – Non-Executive Emma Tinker of a wealth who brings Director equity investment a private Emma is energy renewable numerous of a Director She is experience. investment HG Capital at in business energy the renewable companies, established the spin- in 2016 as Management Investment Asper 2002 and founded Officer. been She has Investment Chief is she where that business out of producers, power and independent developers renewable for a Director a Director also Emma is technologies. renewable of a range across working Society. Benevolent Royal the Gardeners’ of spanning the experience commercial Skills and substantial Has Expertise: across and worked has businesses, in energy investments of lifecycle entire technologies. renewable of a range Timothy (Tim) Jones – Non-Executive Director (Independent) Director – Non-Executive (Tim) Jones Timothy in December 2017. Tim Director Non-Executive appointed Tim was 20 years who brings over Executive Technology anis experienced been Tim has CIO of and operation. execution innovation, digital of the CIO of Times 2013, Insurance since PLC Group Moneysupermarket the annual CIO 20 of member in the top in 2014 and a regular Year and an co-founder Tim was joining MoneySupermarket, 100. Prior to one giant media marketplace UK, the internet at AutoTrader Executive course and of Skyscanner AO.com, alongside ‘Unicorns’ the UK Digital of MoneySupermarket.com. development in leading digital experience of Skills and Depth Expertise: innovative delivering for responsible with companies. currently Tim is insurance, of verticals in the highly regulated propositions consumer and travel. telecommunications financial services, energy,
Joined Board: Joined Board: December 2017 Responsibilities: & Risk Audit Member of Committee & Nominations Member of Committee Remuneration Joined Board: February 2019 Responsibilities: & Risk Audit Chair of Committee & Nominations Member of Committee Remuneration Joined Board: Joined Board: 2016 September Responsibilities: & Nominations Chair of Committee Remuneration & Risk Audit Member of Committee Rupert Sanderson - Chief FinancialRupert Sanderson Officer - Chief all finance, legal for Rupert in February joined us 2017 and responsible is Having including managing our financial stakeholders. matters, and trading well as organisations support services and energy widely in larger worked Rupert programmes, growth through in supportingas smaller organisations its services and it develops as Good Energy to experience brings valuable financial senior and include commercial roles previous His propositions. Europe. and Avis Gas, British Serco at Centrica, positions the of PwC and a Fellow is for an as accountant Rupert began career his in England and Wales. Accountants Chartered of Institute Juliet Davenport – Chief Executive Officer Executive – Chief Davenport Juliet – a Good Officer Energy of Executive and Chief founder is Juliet cleaner a greener, power to with a mission company energy renewable over for been has an innovator Juliet with its customers. together future change climate fight to and innovations technologies developing 20 years, awarded In was 2013, she the better. for sector the energy and transform the of on the board sits She currently renewables. services to an OBE for the of UK and President Vice is Innovate Association, Energy Renewable leading UK of In addition, boards on the advisory sits she Institute. Energy and Energy, Oxford Catapult, Aurora, Systems including Energy think tanks, Institute. Grantham LSE’s Commission on at the European a year for Skills and Worked Expertise: on carbon Parliament then at the European policy, energy European economics. in environmental and a masters holds taxation William (Will) Whitehorn – Non-Executive Chairman Chairman William – Non-Executive (Will) Whitehorn (Independent) companies, with extensive and growing fast-moving on Will focuses especially in technology, sectors, of range a broad across experience and branding. digital a range across roles Non-Executive other a number holds of Will currently Deputy he is where PLC, Group companies, including Stagecoach of He Sweden. of Microtec AAC company Chairman, and space technology Campus, host Event and the Scottish PLC Craneware Chairman also of is Purplebricks of shareholders the founding one of also COP 26. He was of a Non- as Board Air Force Royal joined the recently He has PLC. Group Vice-marshal. Air to equivalent the rank with Director, Executive where Group, with Virgin than 20 years Skills more and Will Expertise: spent He affairs. and corporate development global brand for responsible he was including Virgin businesses Virgin several in founding role a key played also Branson. Sir Richard to special advisor and was Galactic and Virgin Rail
Good Energy Annual Report 2019 Report Annual Good Energy
Joined Board: Joined Board: July 2018 Responsibilities: the Board Chairman of June 2019) (effective Nominations Member of & Remuneration andCommittee & Risk Audit Member of Committee Joined Board: Joined Board: January 2020 Appointed CEO: CEO: Appointed 2002
58 Board of Directors of Board Strategic Report Governance Report Financial Statements 61 Governance Report Governance 5. Maintain the Board as a well-functioning, as a well-functioning, the Board 5. Maintain the Chair balanced led by team and Executive two comprises currently The Board described as on pages Directors Non-Executive four the Chairman, of and responsibilities 58-59. The roles and the Directors Executive Directors, Non-Executive and regularly clearly defined are Secretary Company and responsibilities roles current of Details reviewed. overleaf. out in the table set are Committee & Remuneration The Nominations Directors, from time commitments members discusses the period Over Directors. particularly Non-Executive with Good 20-25 days spent Directors Non-Executive a Committee. Chair of are if they the latter Energy, level. Our risk identification and mitigation processes and processes mitigation Our identification risk level. changing the to be responsive been designed to have of The impact operate. we in which environment model business on the Company’s risks emerging informed make to and used considered also are of and evolution the delivery to including as decisions, our strategy. described in are the Company by faced Risks Key the typical of are While the risks Report. the Strategic the believe we suppliers, energy other by faced risks through these mitigate to positioned well is Company processes, our management risk of a combination we direction and the strategic activity our control pursuing. are and controls management on risk Further information Report & Risk Committee described in the Audit are on page 71. In recognition of the many ways in which we we in which ways the many of In recognition generation energy support renewable to continue a permanent secured the UK, we across OFGEM’s cap price in from derogation 2019 August certified from all our electricity source We wind power, solar power, as such renewables always We and biofuels. power hydroelectric UK energy will other – no and always have that. Our carbon is gas supplier can promise and biomethane from 6% comes too: neutral Gas the Green through the rest offset we only aren’t We Certification programme. carbon though. emissions in reducing interested in wider benefits deliver select we The projects local includingtheir local tackling communities, local women and empowering poverty supplier” electricity green named “best were We companies of ethical the UK’s most and one of Consumer Ethical Magazine by 25 years the last been an accredited have to proud also are We 2015 since employer Living Wage 4. Embed effective risk management, risk management, 4. Embed effective opportunities and threats, considering both the organisation throughout enterprise that effective recognises Good Energy its meet enable it to to critical is management risk objectives. strategic and identifying for a clear framework have We and strategic at an operational managing both risk, Purpose-led from the outset, Good Energy continues continues Good the outset, Energy Purpose-led from better: is way” “other that the prove to • • • • part of an is integral culture the right Establishing information More strategy. Gooddelivering Energy’s outlined is below. on this we and how about where can find out more You our people look and after we how our energy, source Report in the Strategic our customers treat we how and at: group.goodenergy.co.uk. be as to aspire we purpose-led a business, As The possible as about our activities. transparent been doing describes what we’ve Report Strategic on our progress our and mission reflects deliver to our purpose. achieving towards Partnerships – innovating and accelerating and accelerating – innovating Partnerships strategic key through potential our growth partnerships 3. Consider wider stakeholder and social and social 3. Consider wider stakeholder and their implicationsresponsibilities for successlong-term its primary legal responsibility recognises The Board the for the Company of the success promote to into a whole, taking as its members of benefit including stakeholders other of the interests account regulators, suppliers, partners, employees, customers, and in which the local communities the environment responsibility, this Interpreting operates. Good Energy the published by and in linerecommendations with to that its duty not is considers GC 100, the Board of and those the Company of balance the interests determine, to but instead identified stakeholders other of the course factors, up the relevant weighing after success the long-term to leads best it considers action the Company. of 2. Seek to understand and meet shareholder shareholder and meet 2. Seek understand to needs and expectations shareholder a diverse have to proud is Good Energy private of proportion includingbase, a significant Good also Energy whom are of (many shareholders Board The investors. long-term and other customers) of and the needs expectations understand to seeks through particularly shareholders, its stakeholders, and surveys customer regular from gained insight and obtaining surveys periodic investor groups, focus Good roadshows. investor from feedback structured gained the insight to responds strategy Energy’s consultations. these through and other shareholders provides Good Energy in a timely information with relevant stakeholders and balanced with its largest manner and meets their views understand periodically to shareholders plans. and future performance on Good Energy’s shareholders encourages actively Good Energy all an as opportunity for in its AGM participate to openly with the their views share to shareholders shareholders. and other whole Board • better aligned has model to its business Good Energy have ambitions. We its strategic of enable delivery ongoing communication, engaged our people through pioneering, the reinforce to channels multiple using to continue to Good enables that Energy agile culture change. and drive innovate progress describes the excellent Report The Strategic its strategic of made in pursuit has Good Energy building to are we ambitions and momentum the the future. of market the energy deliver
Good Energy Annual Report 2019 Report Annual Good Energy
Customers - putting the customers at the heart of at the heart of - putting the customers Customers clean make to do and striving that we everything choice the natural energy for technology – leveraging technology Energy driving engagement our customers, of the benefit of in control putting customers by and growth usage their energy the and retain attract we Experts – making sure our for deliver to roles, people, in the right right ambitions our strategic and realise customers • • • Good Energy is a different kind of energy company, company, energy kind of a different is Good Energy future a cleaner, greener of the choice powering Good and our values, principles Guided by together. challenging successfully of record a track has Energy the back into done, putting power things are the way across and communities businesses families, hands of the country. Board the strategy, Good Energy’s In establishing Good Energy’s of interests the long-term considered aligns which those a course and set stakeholders the promoting the Company, of with those interests and long-term the Company of interests long-term shareholders. for value the accelerate to seeks strategy Good Energy’s a a service, as facilitating energy towards transition which future energy and affordable clean, secure a whole and as reduces consumers energy benefits The lifecycle. the energy from impacts environmental in strategy describes Good Report Energy’s Strategic detail. more long-term deliver to positioned well is Good Energy of the implementation through shareholders for value on: focusing its strategy, 1. Establish a strategy and business and business a strategy 1. Establish for value long-term model which promote shareholders Good Energy is committed to high standards of of standards high to committed is Good Energy and good places governance governance corporate In July 2018, the Board the business. at the heart of the Quoted adopted formally Good Energy of corporate Companies code of Alliance’s (“QCA”) of (“the Code”) in line with requirements governance The Board AIM Rules. Exchange’s Stock the London the Company Code provides QCA that the believes framework governance corporate with a rigorous in the long- and support its success the business to governance The Code out 10 corporate sets term. meets Good in which Energy The ways principles. sections described is in the following principles these in which about the ways information and incorporates under its duties the Companies discharges the Board on our view to available also is 2006, s172. This Act at group.goodenergy.co.uk. website Overview
60 Governance & Directors’ report Directors’ & Governance Strategic Report Governance Report Financial Statements 63 Governance Report Governance Changes are made to the composition of the Board the Board of the composition made to Changesare balance of the right ensure to and its Committees the next skills and capabilities for complementary can which be found growth, Good Energy’s of phase on page 67. including about the Board, Further information experience, Director’s each describing biographies out on pages 58-59. set are identify to Director each encourages The Company support the effective to needs their individual training the of and the delivery the Board of operation specific provides The Company strategy. Company’s both markets and energy energy on renewable training appropriate. as providers and external using in house briefings received also have the period, Board the Over in including developments topics of on a variety handling of and appropriate governance corporate customers shareholders, from insight data, personal Good of and expectations on their views and staff the Company’s from briefing formal as well as Energy and the AIM rules to on updates adviser nominated matters. markets capital other enable individual Directors to in place are Procedures the of at the expense advice independent seek to The in place. is cover and appropriate Company advice external may take and its Committees Board appropriate. as team and the Executive the period, the Board Over information of the flow evolve to together worked have insight- in simpler, resulted has This the Board. to and debate effective facilitate to reporting focussed and decision-making. timely enable robust that is based culture a corporate 8. Promote and behaviours values on ethical in its role of the importance recognises The Board desired the Company’s and monitoring promoting with the Company’s consistent and it is ensuring culture objectives. strategic long-term company. energy kind of a different is Good Energy determined straightforward, - fair, values Our core our of – underpin the delivery and inclusive a cleaner, greener of the choice power purpose to together. future 7. Evaluate board performance based based performance board 7. Evaluate seeking objectives, on clear and relevant improvement continuous process an annual evaluation conducts The Board its that of as well as its effectiveness, assess to its drive to and the individualCommittees Directors, described is in The process improvement. continuous key with the Board’s on page 69, together detail more made and progress year the current for focus of areas objectives. previous towards The roles of Chairman and Chief Executive have have Executive Chairman and Chief of The roles in a been splitChairman with the acting always capacity. non-executive to accountable are Directors The Executive and financial the operating for the Board the Group. of performance the approving for responsible also is The Board Executive setting Executives, of appointment programmes, incentive and devising remuneration policies and financial and accounting agreeing properly are that the shareholders ensuring the businesses. of about the state informed the for responsible is In addition, the Board the Company of and removal appointment Secretary. period, the Board the reporting the end of At Officer, Executive the Chairman, Chief comprised whom of each Directors, Non-Executive and four In January be independent. to considers the Board Financial Officer joined the Board. 2020 the Chief a has that it currently satisfied is The Board and operational relevant of range sufficient its discharge be able to to financial experience responsibilities. Committees: two constituted has The Board & Risk and & Remuneration. Nominations Audit only Non-Executive comprise Committees Both Directors. a substantial has the Directors One of in aggregate the Company, in shareholding the issued 3.8% of approximately representing in the hold shares Directors All current capital. does not although the Company Company do so. them to require The Board is satisfied that it has an appropriate an that it has appropriate satisfied is The Board an as well as skills andbalance experience of qualities and personal balance of appropriate long-term the Company’s deliver capabilities to to committed is The Board objectives. strategic women both of balanced representation maintaining including at Board the organisation, and men across team. and within the Executive level and its composition reviews regularly The Board to access it has ensure to its Committees that of and the necessary up-to-date perspectives diverse its skills and discharge capabilitiesexperience, to the length reviews also The Board effectively. duties and on the Board served has Director time each of Director each made by if contributions assesses can tenure the Director’s of Details effective, remain on page 77. be found Other information: • • • • • • • them the Directors that between 6. Ensure the necessary experience, up-to-date have andskills capabilities Overseeing and managing financial Overseeing and its the Group for resources subsidiaries. working a close Maintaining & Audit with the Chair of relationship Risk Committee. and advisory governance, Providing the Board support to administrative and its Committees. Overseeing and monitoring business business and monitoring Overseeing controls, internal performance, and risk governance corporate management. – including principal risks of Oversight political position, and risk competitive delivery. programme ensure to Managing the Board at Board allocated time is adequate all agenda of discussion for meetings items. receives the Board Ensuring timely and clear accurate, information. formal and maintaining Establishing of delegations and appropriate authority. working a close Maintaining with the Chairman. relationship • • • • • • • • • The Board and each Director has has and Director each The Board the Company to access unlimited has Limited Eversecretary Secretary. Secretary the Company as served 2 Januarysince 2020 and is for: responsible and the Board to Secretary as Acting compliance ensuring its Committees, and procedures with Board requirements, governance corporate and ongoing induction Directors’ requirements. training Developing and implementing the and implementing Developing the by approved as strategy Group’s Board. formal and maintaining Establishing of delegations and appropriate authority. Effective running of the Board the Board running of Effective in accordance and its Committees good of with principles corporate governance. agenda. Setting the Board support the Chairman to experience skills and external knowledge, Providing and the Executive. the day-to-day Overseeing business. the Group’s of operation the and implementing Developing the by approved as strategy Group’s Board. Setting Group strategy and strategy Setting Group with the in collaboration objectives Executive. and knowledge leadership, Providing and guide experience to support the Executive. Engaging with shareholders. • • • • • • • • • • • •
Good Energy Annual Report 2019 Report Annual Good Energy
Role of the Company Company the of Role Secretary Rupert Sanderson Chairman William Whitehorn Other Non-Executive Directors Financial Chief Officer Chief Executive Chief Davenport Juliet The Board the Board of Role 62 Strategic Report Governance Report Financial Statements 65 Governance Report Governance updating customers on Good Energy’s activities activities on Good Energy’s updating customers via communications newsletters, regular through on content and publication of platforms digital social and on the Company’s goodenergy.co.uk media channels; of and expectations views hearing customers of thematic assessment through Good Energy gathering in the moment contact, customer during or immediately customers from feedback periodic consumer calls, conducting following and surveys; customer and regular groups focus and products new of in trials customers involving services. with Good engaging our people regularly through purposeand performance Energy’s and discussion briefings regular structured, the year; throughout forums with our people engagement regular maintaining an established individually and through both the across from champions employee of group business; via sharing and debate information encouraging Good portal, Hub; communications our internal and surveys engagement semi-annual conducting received. the feedback account into and taking interests of internal and external stakeholders when stakeholders and external internal of interests in ways of Examples level. at Board making decisions communication active maintains Goodwhich Energy include: stakeholders with other Customers: • • • People • • • • Audit & Risk Committee & Risk Audit Governance Corporate Financial Reporting Controls Internal Risk Management Auditor External principal risks of Oversight The Board’s Committees The Board’s Committee & Remuneration Nomination Composition Board planning Succession nominations Board policy Remuneration setting design and target Incentive review remuneration Executive 10. Communicate how the Company is is the Company how 10. Communicate maintaining by and is performing governed and other a dialogue shareholders with stakeholders relevant that its duty considers the Board described above, As and the Company of balance the interests to not is determine, to but instead stakeholders other of those the course factors, up the relevant weighing after the long-term to leads best it considers action of welcomes Good Energy the company. of success particularly the need for dialogue with shareholders, and strategy open on the Company’s communication by expressed perspectives calibrate to care takes Good Energy’s of in the context individual members a whole. as members are with shareholders Principal communications results, and Interim the Annual through conducted on key RNS announcements and interim AGM supplements Good Energy developments. business with presentations results and Interim its Annual (all stakeholders interested and other analysts to with larger and meets on its website) available discuss annually twice to at least shareholders our as well as and governance, performance both plans. future shareholder encourages actively The Board and other Meeting participation General at its Annual time. time to from meetings general supports team Relations Investor Good Energy’s with shareholders communications effective at: and can be contacted investors and other [email protected]. ensuring of the importance recognises also The Board engagement effective maintains that the Company the account into and taking stakeholders with other 1 2-5 Yrs 0-2 Yrs Tenure Non-Executive Non-Executive amework to empower Good Energy Good Energy empower to amework provide a fr provide that decisions informed make to employees andits the Company of interests in the best are stakeholders and other customers the Company in which the environment reflect operates risk mitigate advice. can get our employees where explain 1 9. Maintain governance structures and and structures governance 9. Maintain purpose and for fit that are processes the Board support good by decision-making support its structures governance Good Energy’s its stage to appropriate and are culture corporate business. the of and the complexity development of and a Nominations established has The Board and Risk andCommittee an Audit Governance governance support effective to Committee and decision-making. listed are the Committees for focus for areas The key page. on the next of the effectiveness monitors continuously The Board evolve enabling them to structures, its governance growth support the Good time to Energy’s over and development. who works at Good Energy reflects our ethos and our ethos reflects at Good Energy who works and that our policy together when working values in supports the Board framework and procedural its duties. discharging Our Guiding Principles: • • • • Our on Guiding can be Principles found details More under 10. Principle the Board Balance of Balance of Executive Non-executive 1 Female Male Gender Diversity Good Energy Annual Report 2019 Report Annual Good Energy Data as at 31 March 2020. at 31 March as 1. Data We were named “best green electricity supplier” and electricity green named “best were We last the companies of ethical the UK’s most one of are Consumer Ethical Magazine. We by 25 years Living Wage been an accredited have to proud also 2015. since employer the Strategic out within set is Further information on pages 50-52 and & the Nominations Report on pages 75-81. Report Remuneration a that on the principle operates Good Energy valued are people’s differences where workplace and effective innovative productive, a more creates that attracting, recognise also We organisation. its to integral is talent key and incentivising retaining objectives. its strategic meet ability to practice best policies follow employment The Group’s all employees, on equal opportunitiesbased for gender, nationality, sexual race, of irrespective or age. religion disability, status, marital orientation, objective, are employment to relating All decisions and criteria and bias upon based work from free or their with employees individualConsultation merit. with the at all levels, continued has representatives account into taken are that views ensuring aim of affect to likely made that are are when decisions of aware are and that all employees their interests of the financial and performance economic the business. on gender about our performance information More can be modern slavery to pay and ourapproach the Company’s pages of on the relevant found at group.goodenergy.co.uk. website of upgrade a group-wide completed Good Energy a code in 2015, introducing environment its control that is a ‘Guiding approach Principles’ conduct: of design, By business. a fast-growing for appropriate under duties the Board’s our Guiding reflect Principles everyone ensures 2006, s172. This the Companies Act 64 Strategic Report Governance Report Financial Statements 67
3
– – Audit & Risk & Risk Audit Management
Governance Report Governance – – Renumeration Nominations & Nominations & Independence of the Independence the of Directors Non-Executive the of an annual review conducts The Board and Directors the Non-Executive independence of be to Directors its Non-Executive all of considers and judgement. character in both independent independent was The Chairman, Will Whitehorn, in July 2018. the Board to upon appointment During the year, the Board decided there was no was there decided the Board During the year, Committee the Funding & Investment from benefit funding and investment Any discontinued. was this so the Board. made by now are decisions Financial Officer,Rupert was Chief Sanderson, on 2 January 2020. the Board to appointed 2
Board Not applicable/invitation only applicable/invitation Not – Member
Chair
Juliet Davenport (CEO) Davenport Juliet Rupert (CFO) Sanderson (Chairman) Will Whitehorn (Non-Executive) Emma Tinker (Non-Executive) Tim Jones Nemone Wynn-Evans (Non-Executive) Directors Former Chairman) (former John Maltby Assumed Chair following 2019 AGM 2019 AGM Chair following 2. Assumed in June 2019 Good Energy to induction of completion 3. Following Board & Committee Changes & Committee Board and process its annual evaluation partAs of its reviews the Board required, as otherwise to access has that the Group ensure to composition skills and experience complementary a balance of its strategic achieve to the Group enable to ambitions and wider purpose. the Board during the year, reported, previously As of announce the appointment to pleased was Deputy Chair and of the role to Will Whitehorn in July 2018. Director Non-Executive independent in June 2019, Will the assumed the AGM Following the Board. Chairman as of role Nemone Wynn-Evans reported, previously As & Risk Committee the Audit the Chair of assumed Good to her induction of completion following in June 2019. Energy Board and Committee composition and Committee Board December at 31 as 2019, and its committees the Board of composition out the sets table The following serving and 2020 those during the year: planned for changes maintaining a constructive dialogue policy- with a constructive maintaining Good Energy’s to relevant on matters makers operations; and current strategy regulator, energy with the engagement regular public through as well as bilaterally both Ofgem, and forums; and industry consultations aligned participation groups in industry targeted and strategy. purpose, values Good Energy’s to Policy-makers and regulators Policy-makers • • • The Board has established two principal committees principal committees two established has The Board out below. set as on particular areas focus which the Board to reports Committee each The Chair of meeting. Committee each after on its activities in later included are Committee each from Reports section. this the shareholders, to reserved not that are Matters the responsibility are its Committees or one of Board and established who have Directors the Executive of delegations of schedule a documented maintains and the Executive of members authority to of authority delegation of This management. other Guiding within the Company’s incorporated is a authority includes The delegation of Principles. financial limits matrix covering authorisation detailed on business needed when conducting and approvals the Group. behalf of Good Energy Annual Report 2019 Report Annual Good Energy progress updates are provided via the Company’s the Company’s via provided are updates progress and periodically as newsletters investor websites, for bondholders, to communications other partof interest of notice enclosing within letters example payments. support the to approach a tailored operating strategic of and maintenance development relationships. with local open relationships maintaining in Wiltshire groups business andauthorities key and the South West; with communities our engagement continuing generation renewable Goodhosting Energy’s and assets; in local schools talks providing 66 The Board is ultimately responsible to shareholders shareholders to responsible ultimately is The Board of and performance management the direction, for and its business. the Company out set are Directors the Board’s of Biographies remuneration, the Directors’ of pages 58-59. Details out in the set are options, including share on pages report andNominations Remuneration in ordinary interests the Directors’ of 75-81. Details out on set are the Company of in the capital shares information. and other page 84 under Statutory for reserved matters of a list maintains The Board affect which items being those generally its approval, the of direction or strategic the shape, profile risk The Board financial items. the key as well as Group, annually schedule and this updated it is reviews necessary. as The Board and Committees its The Board Delivery partners and suppliers Delivery • Local communities • • • Bondholders • Strategic Report Governance Report Financial Statements 69
Governance Report Governance Board and Directors’ and Directors’ Board Evaluation Performance with the Chair a new to transitioned In the period we of with the prospect on embedding together focus Chair. under new evaluation first Executive Team Executive and Chairman have Executive Chief of The roles in a been split, with the Chairman operating always and the roles capacity. outline An of Non-Executive Executive, the Chairman, Chief of responsibilities and, Non-Executive Directors Executive other on page 62. provided are Directors Officer Executive Chief the of The responsibilities out on page set Financial Officerand are the Chief As team. an Executive by supported are 62 and they the comprised at 31 December 2019 the Executive Officer, Commercial Financial Officer, Chief Chief The Operations. & Customer People of and Director the Board to appointed Financial Officer was Chief on 2 January 2020. forum an is executive-level team The Executive the by chaired leaders, senior most the Group’s of communicate, to together It comes Executive. Chief Group- of and actions on issues andagree review and implement develop, wide significance. to It helps plans, considers and operational strategic monitor and applicability, appropriateness the continuing and the aids culture the Group’s leads risks, of impact and Chief Executive the Chief of decision-making Financial Officer in the in managing the business duties. their of performance forums making our decision reviewed Duringwe 2019, and weekly monthly implementing and in 2020 are the allowing governance clearer provide to forums reduce in good decisions, strengthen to Company plans, the Audit alongside strategic andrisk, review and & & Risk Committee the Nominations will forums Monthly Committee. Remuneration Customer Committee, the Executive include Board Energy Board, & Operations People Board, are forums and weekly & Forecasting and Budget meetings. and Sales & Operations Executive for the forthcoming year is reviewed and authorised reviewed is year forthcoming the for Board. the by access have its Committees and of each The Board and Secretary the Company the services of to necessary. as advisers external Operations of the Board of Operations meetings Board scheduled number the of of Details on the table out in set is Directors of and attendance at reviewed is performance page The Group’s 68. responsible is and the Board meetings scheduled these the Group, for the strategy and reviewing agreeing for months) (twelve term short both it maintains which for plans. years) five to (three and longer-term to relating matters for In addition, responsible it is strategy, and remuneration, recruitment employee areas. specific subject and other health and safety and team the Executive of members relevant, Where to invited are within the business leaders senior other Members and discussions. Committee Board attend the of with members engage also the Board of on directly leaders senior and other team Executive initiatives. relevant Committees and relevant the Board During the year, support to ad-hoc proceedings a number of convened and implementing refining in developing, the Group ambitions. In its strategic in support of initiatives held Committees or relevant addition, the Board to topics of on a variety discussions informal regular events, macro-economic of the impacts consider provide and to policy in Government developments in support the Company to guidance and insight objectives. and longer term term its short delivering the Group’s of review a formal conducts The Board members annually, all at which Board at least strategy present. are team the Executive and all of one week at least circulated generally are packs Board time adequate allow to meetings scheduled ahead of review to and/or Members Committee the Board for unable is a Director Where and prepare. information the meeting for the materials a meeting, attend to are briefings them and subsequent to provided are appropriate. as provided regular maintain Executive The Chairman and Chief the from a briefing and the Chairman receives contact meeting. Board scheduled each before Executive Chief the Non-Executive to a briefing The Chairman provides to meeting Board scheduled each before Directors effectiveness align and the Board’s priorities maximise de-briefs The Chairman regularly also at meetings. meetings after Directors with the Non-Executive opportunities and identify feedback capture to do not Directors The Executive improvement. for discussions. in these participate that any request to the right have All Directors in the appropriate recorded are have they concerns minutes. or Board Committee and financial the operational reviews The Board a against month each for the Group of performance In addition, targets. performance of set pre-agreed of a system through information receives the Board better financial it to planning enables which continuous inform and to forecasting, flow and cash manage profit financialplan formal making. The decision investment 2/2 2/2 2/2 1/1 1/2 1/1 Committee Remuneration Remuneration Nominations & Nominations &
4/4 4/4 4/4 1/2 2/4 4/4 Committee Audit & Risk & Risk Audit 8/8 8/8 4/5 8/8 7/8 8/8 Board 5 6 4 Good Energy Annual Report 2019 Report Annual Good Energy Tim Jones Emma Tinker Will Whitehorn Non-Executive Directors Non-Executive Nemone Wynn-Evans Directors Former John Maltby Juliet Davenport Juliet Executive Directors Executive Attendance and Committee Board Tim Jones was unable to attend due to prior business committements committements business prior due to attend unable to was 4. Tim Jones and its Committees Board the to her appointment since all meetings attended has 5. Nemone Wynn-Evans their tenure applicable to meetings those reflects the table during the year, retiring members 6. For 68 As permitted by the Company’s Articles of Association, the Directors have the benefit of anindemnity of the benefit have the Directors Association, of Articles Company’s the by permitted As 2006. the Companies 234 of Act Section by defined as party indemnity provision a qualifying is third which also Company The in force. and currently is financial year the last throughout in force The indemnity was in respect liability and Officers’ insurance Directors’ the financial year throughout and maintained purchased and Officers. and itself its Directors of Directors’ Indemnities and Indemnities Insurance Directors’ Strategic Report Governance Report Financial Statements 71 Governance Report Governance n upgrade of the enterprise risk risk the enterprise of n upgrade oversaw a business improve to framework management integration; financial and of an improvement oversaw and controls; reporting operational derogation with the application for involved were cap; price the energy from plan for on the implementation consulted were and project; the Kraken errors one-off of on the reporting consulted were results. andwithin the full half year Risk control environment and internal audit and internal environment control Risk and risk internal an has established The Company Counsel the General led by was which audit function 2020, For the year. throughout Secretary & Company and the risk structure, management under the new the of under remit the will fall audit function internal Financial Officer. Chief responsible is audit and function risk The internal activities, management risk Good Energy’s for include its activities such, audits. As and internal controls internal of review the regular ensuring the to events on risk reporting risks, key to relating and testing and & Risk Committee reviewing Audit audit through controls internal of the effectiveness on pages 28-31 in the shown are Risks Key reviews. report. Strategic the of upgrade its groupwide completing Since has in 2015, GoodEnergy environment control a ‘Guiding conduct, its code of evolve to continued a fast- for appropriate that is approach Principles’ who works everyone ensures This business. growing when ethos the Company’s reflects at Good Energy together. working to a framework The Guiding provide Principles make to employees Good Energy empower interests in the best that are decisions informed and other and its customers the Company of the which in the environment reflect stakeholders, where and risk, explain mitigate operates, Company The Guiding advice. demonstrate Principles get to with honesty, working to commitment the Group’s include also They and transparency. respect things, customer other amongst to, policies relating & approvals handling,service, health & safety, data responsibility. and corporate procurement, authorities, annually at least refreshed The Guiding are Principles in which the way evolve to continues and the Group at all levels employees from engagement it secures the organisation. across During the period, the Committee: • • • • • t is critical to enable it to meet its meet enable it to to critical t is Overview risk that effective recognises Good Energy managemen objectives. strategic identifying for a clear framework has The Company and at an operational and managing both risk, and mitigation identification Its risk level. strategic be responsive been designed to have processes it operates. in which the changing environment to on the Company’s risks emerging of The impact make to and used considered also model are business and the delivery to including as decisions, informed strategy. the Group’s of evolution out set is the Group facing risks the key A summary of on page 28. Report in the Strategic the for responsibility overall retains The Board controls and internal management risk Company’s the Company’s reviews While the Board framework. the internal of and the suitability principal risks the reviewing for annually, responsibility controls and internal management risk of effectiveness and Risk Committee the Audit to delegated is controls of on an this The system annual basis. reviews which manage, to designed effectively is controls internal achieve to failure of the risk than eliminate, rather objectives. business Committee & Risk Audit and Risk Management the Audit of The members on page 67. On 6th February shown are Committee as Nemone Wynn-Evans welcomed 2019 the Board Nemone Director. Non-Executive an independent following the Committee the Chair of assumed in Good Energy to her induction of completion June 2019. are and Nemone Wynn-Evans Emma Tinker financial and relevant recent have to considered of meetings attends Executive The Chief experience. with the only together invitation by the Committee Financial & Risk Specialist. Officer andChief Audit and Risk Committee the Audit The primary duty of and financial reporting the accounting oversee to is external practices, accounting the internal process, the Group’s of and effectiveness audit arrangements Further system. control and internal management risk of light 2020 in throughout will be undertaken reviews outbreak. the COVID-19 at least meets and also Risk Committee The Audit review to auditors external annually with the Group’s the to the audit services being provided and agree non - audit services. It also including any Group, without management auditors, with external meets the audit discuss process. to being present, Audit & Risk Management report Management Risk & Audit People at GoodPeople Energy practice best policies follow employment The Group’s all employees, on equal opportunitiesbased for gender, nationality, sexual race, of irrespective or age. All religion disability, status, marital orientation, free objective, are employment to relating decisions and individual criteria and bias upon based work from that on the principle operates merit. The Company valued are people’sdifferences where a workplace and effective innovative productive, a more creates or their employees with Consultation organisation. with the at all levels, continued has representatives account into taken are that views ensuring aim of their affect to likely made that are are when decisions the of aware are and that all employees interests the business. of financial and performance economic Shareholders are strongly encouraged to appoint the the appoint to encouraged strongly are Shareholders that ensure to in advance, Chairman their proxy as at the 2020 AGM. and be represented can vote they than the Chairman will be entitled other No proxy is proxy If another in person. the meeting attend to No vote. be unable to will therefore they appointed, attending as designated than those (other shareholder the quorum) to will be the purposes of admitted for in attend to attempting shareholders Any the meeting. entry. will be refused person to shareholders will be still opportunity for There questions. ask through members to will be circulated notice The AGM and will methods communication their preferred at website on the Group’s view to be available also group.goodenergy.co.uk. at all Company resolution on each A poll conducted is the have All shareholders meetings. general proposed of in respect their votes cast opportunity to post. by or either electronically proxy, by resolutions published and are outcomes voting the AGM, Following website. on the Group’s made available are Good Energy Annual Report 2019 Report Annual Good Energy 70 Based on UK Government advice at the time of at the time of advice on UK Government Based change the format to decided has writing, the Board the AGM. of advice UK Government the current of In light strongly public health guidance we and related attending from refrain that shareholders recommend entry. will be refused they as in person, the 2020 AGM of is our shareholders of The health and wellbeing monitoring are and us we to importance paramount the by advised andthe situation measures UK Government. Annual General Meeting (AGM) Meeting General Annual Good Energy Bonds Good Energy announcedOn that it 21 May 2019, the Company 30 Bonds before I in full Good Energy redeem would June 2019. permitted was the Company reported, previously As time and following at any investments those prepay to solar and Brynwhilach Downs Newton of the sales the Company community ownership, into farms bond was the first which deemed the purposes for Bonds II is had been fulfilled. Good Energy raised affected. not The individual performance of Executive and Non- Executive of The individual performance annually. reviewed is Directors Executive anindividual annual appraisal The Chairman conducts and Non-Executive each Directors with the Executive of commitments time The cumulative Director. the part as of reviewed are Directors Non-Executive that no ensure to evaluation annual performance over-committed becomes Director Non-Executive the Company time to sufficient devote and able to is Chairman’s The effectively. duties discharge to the Non-Executive by reviewed is performance and Directors the Executive with input from Directors, Team. the Executive of members team the Executive of members of The performance & Remuneration at the Nominations discussed is and on year each quarter duringCommittee first the the Executive of Members an required. ad hoc as basis that discussion. attend not do team Performance of Individual Directors of Performance Strategic Report Governance Report Financial Statements 73 Governance Report Governance Whistleblowing Policy Whistleblowing a by supported is policy whistleblowing The Group’s independent a secure, and includes clear process which helpline, through third-party and anonymous contract casual to employees from person, any doing, about wrong concerns may raise workers, the to in relation or dangers risks poor practices, dealings or activities. business Company’s annually by reviewed is Policy The Whistleblowing whistleblowing and Any Risk Committee. the Audit the to reported are and their outcomes incidents made during 2019. were No reports Committee.
External Audit External ent appointm Auditor the Group process, tender a competitive Following during 2017. auditors as & Young Ernst appointed by confirmed was appointment & Young’s Ernst LLP & Young Ernst at the 2018 AGM. members The Committee auditors. the Company’s as continue a the audit after re-tender to will whether consider period, or earlier if appropriate. year five independence Auditor the Group’s and monitors Risk Committee The Audit and the objectivity compromising against safeguards It annually auditors. the external independence of the Group to non-audit services provided any reviews believe the auditors and whether and their cost, their that may affect relationships any are there confirmation written independence and obtaining independent. are that they the auditors from its reviewed also and has Risk Committee The Audit non-audit work. awarding for policy ended 31 December 2019, the the financial year For the auditors’ of its review conducted has Committee of independence and that no conflict concluded LLP audit and & Young Ernst between exists interest and is Risk Committee The Audit non-audit work. audit only services. for & Young Ernst using and non-audit fees Audit the reviewed & Risk Committee The Audit non- for & Young Ernst by received remuneration during the period part as of conducted audit work further details their independence. For assessing the financial 7 to paid, note see fees regarding on page 136. statements equity or ensuring a waiver from the counterparty the counterparty from equity a waiver or ensuring plans, these point, at this However breach. covenant not are the Board, by under contemplation whilst being able not of the risk andin place therefore the liquidity includingbreach the risk mitigate to material represent covenant the counterparty of the Group’s over doubt that may cast uncertainty apply basis the going concern to continue ability to accounting. of described uncertainty the material Notwithstanding the and making enquiries assessing after above, and status projections forecast, against progress the above, to referred the mitigating actions of that expectation a reasonable have Directors and meets in operation will continue the Group the going due over fall they as its commitments continue the Directors period.concern Accordingly, the in preparing basis the going concern adopt to financial statements. The Group has long standing and well operated operated and well long standing has The Group with a number of relationships trading an contain which the majority of counterparties, Worth Net Tangible the Group’s that agreement contributions cash paid as up shareholder (defined more by decrease earnings) not should retained plus below to period or fall a 12 month than 25% over are covenants Worth Net Tangible level. a certain financial audited annually on publication of tested financial covenant this of Breach statements. request to decide, so if they counterparties, allows additional financial support may be (which in the credit of letter guarantee, company a parent of form may financial security). counterparty The or other additional if appropriate the contract terminate if requested, provided, financial security not is with at risk within a timely manner. The value commodity upon based current counterparties at estimated is prices market and current contracts £2m. approximately to with GCP, amounting borrowings The group’s service being a debt covenants two £33.8m, contains specifically ratio cover and a loan life ratio cover Compliance assets. with the generation associated prices on generation based is covenants with these not are concluded has the Board which and volumes, COVID-19. by affected materially Case which a Downside considered has The Board during usage a energy the reduced assumes that 10% of assumes months, four period of lockdown customers business and 25% of customers domestic during period, this 30% of that no payments make within a collected subsequently not are debts these bondholders period and that 50% of twelve-month bonds their in June 2021. The redeem to elect is that the Company Case indicates Downside and test covenant with the counterparty compliant of the date from months twelve for operate able to and Accounts. Report the Annual of approval period the lockdown over the uncertainty Given under been has sensitised this rates, and collection that the such test stress cash a plausible reverse that 30% of months, six to period extends lockdown customers business and 40% of customers domestic during period, this that 50% of no payments make and that collected subsequently not are debts these their bonds. redeem to elect bondholders 100% of sufficient have would scenario, the Group Under this the bond in full in June 2021, with nil repay to cash be compliant and would balancecash remaining, covenant. with its counterparty periods in the going plausible that lockdown It is longer than six a period of over periodconcern are worse is collection on cash or the impacts months, the were these If either of than above. the scenarios the test, stress cash the reverse in addition to case and/ covenant its counterparty breach would Group the bond in repay to cash insufficient have or would full in June 2021. that further mitigating confident are The Directors banking new of inception by be could taken actions new issuing sites, generation of the sale facilities,
Good Energy Annual Report 2019 Report Annual Good Energy 72 in place. in place. self-serve on meter reading etc, given those those given etc, reading on meter self-serve being are operations face to face third-party curtailed. substantially been has sites generation of The operation can period. Sites during the lockdown unaffected and contractors without human intervention, operate required any for site attend been able to have travel from exempt are they as maintenance service. utilities being an essential due to restrictions COVID of the impact forecast While difficult it is to continue operations day-to-day 19, the Group’s affected. without being materially increase a 10-15% shown Early have indications and with gas electricity domestic in demand for approximately for accounting customers domestic have We flow. supply cash Good Energy’s 55% of 25% in electricity approximately of a reduction seen Business customers. our business demand from Good 45% of approximately for account customers seen currently have We flow. supply cash Energy’s of debit or pay on receipt in direct no deterioration of the start since customers from bill receipts cash period the lockdown as However, the COVID-19. commences and an downturn economic continues, and on business an impact expecting are we usage. energy pay for ability to customers’ domestic time assessing considerable spent has The Group have could that COVID-19 impacts the potential in to taken has assessment This on our operations. being by put in place measures the current account discretionary and reduce cash preserve to the Group in revenues reductions and potential expenditure, on domestic impact the economic from resulting and an lockdown due to customers and business that assumes It also downturn. economic expected or additional loan facilities no overdraft are there Going Concern of the impact monitoring actively is The Group a and place put in has on its business COVID-19 the impact. minimise to mitigations number of of with a variety been has working The Group is business our UK focused ensure to stakeholders our of The implementation respond. to placed well progressing is platform technology customer new flexibility with future us planned provides as which We customers. all services and to deliver operate to under 300 people just of our full business have now business All core remotely. working successfully functioning are care including customer functions make needing to are we although expected as substantial encouraging as such adjustments, The internal audit and risk management function function audit and management risk The internal Company’s the as such build on initiatives to aims enhance the control Guiding to Principles, and Risk Audit the into Reporting environment. carried out audit has the function Committee, being are risks that key assurance provide to activity are controls and associated and mitigated, identified effectively. operating Strategic Report Governance Report Financial Statements 75 Governance Report Governance received and considered proposals to implement implement to proposals and considered received Financial Officer, including Chief of the role the Board of composition the resulting reviewing skills, mix of a suitable and of the availability and expertise; experience and appointment the recruitment, oversaw its Rupert following Sanderson of induction a Chief appoint that the Board recommendation and the Board; Financial Officer to the new of appropriateness overall reviewed to in order structure management Executive strategy. company and deliver implement conduct an annual appraisal of the performance the performance of an annualappraisal conduct and Directors; the Executive of against performance Company assess schemes. reward within targets performance Nominations the under review willThe Committee keep skills and the mix of the Board, of composition the and of the needs the Directors of experience the benefits for having due consideration business, developing in and support the Group diversity, of its meet plans to succession appropriate objectives. long-term diversity on promoting focused remains The Board and that women and notes the organisation across and Board at both equally represented men were during the period. level Executive the reviewing for responsible is The Committee prior to both Director each of time commitments the Board and annually, part as of all appointments devote that all Directors ensure to process, Evaluation their discharge to the Company time to sufficient effectively. duties During the period, the Committee: • • • • • to as decisions in any may be involved No Director remuneration. their own also Committee & Remuneration The Nominations strategy, remuneration the group-wide oversees inclusion diversity, to particularly with respect a Nominations of and gender pay. The functions the pre-existing to introduced were Committee during Committee 2016. During Remuneration these whether considered the period, the Board two into separated be better would functions and that it concluded committees separate be to the functions for appropriate remained The Board committee. within a single combined periodically. this will review review the structure, size and composition of and of composition size the structure, review that they ensure to and its Committees the Board support the Company’s to appropriate remain and making and development, growth the Board; to recommendations and rigorous a formal, is that there ensure of the appointment for process transparent the Board; to Directors new plans succession and develop consider to the Group; for appropriate the to approach the Group’s determine and Directors the Executive of remuneration on behalf of the Group, of managers senior the Board; Nomination & Remuneration report & Remuneration Nomination Overview a that on the principle operates Good Energy valued are people’s differences where workplace and effective innovative productive, a more creates that recognises also The Company organisation. is talent key and incentivising retaining attracting, objectives. its strategic meet its ability to to integral the for responsibility overall retains The Board strategies. people and reward Company’s Good which Energy beliefs are and inclusion Diversity promote to about and continue passionate are at Good Energy Diversity the company. throughout highly are which perspectives different provides in support the Company differences these as valued inclusion believe its purpose. The Company achieving and are with its values consistent are and diversity processes, selection in recruitment considered pay and promotion, development opportunities for equality & its people. Diversity, for and benefits to provided is guidance andinclusion online training during induction. all employees the ethnicity to begun gathering has relating Data the of understanding a fuller enable its people to of at Good Energy. representation these of the suitability reviews While the Board the reviewing for annually, responsibility strategies and underlying strategies these of effectiveness & the Nominations to delegated plans is Committee. Remuneration The Nominations & Remuneration Committee and the Nominations Remuneration of The members (Chair), Will Whitehorn, Emma Tinker are Committee whom are all of andTim Jones Wynn-Evans, Nemone Directors. Non-Executive independent & the Nominations The primary of duties to: are Committee Remuneration • • • • Good Energy Annual Report 2019 2019 Report Report Annual Annual GoodGood Energy Energy 7474 Strategic Report Governance Report Financial Statements 77 30,000 45,000 32,000 25,000 45,000 218,000 Annual SalaryAnnual (£) Governance Report Governance 9 months Notice period Notice 1 26 July 2018 02 August 2007 02 August 01 January 2019 15 October 2012 15 October 01 December2017 02 September 2016 02 September Date of contract of Date Position Chief Executive Chief Name Directors Executive Davenport Juliet Non-Executive Non-Executive Directors Emma Tinker Tim Jones Nemone Wynn-Evans Directors Former John Maltby Will Whitehorn Formal appointment to the Board took effect on 4 July 2018. effect took the Board to appointment 1. Formal Service agreements, notice periods and termination payments periods and termination notice Service agreements, Service agreements, notice periods and periods and notice Service agreements, payments termination Directors Executive the for The service agreements and may in normal term a fixed for not are periods on the notice be terminated circumstances page. on the following listed the Company the Chairman of of The remuneration that fees of consists Directors and the Non-Executive in arrears. paid monthly are did Directors The Chairman and the Non-Executive or long-term scheme bonus any in participate not any accrue nor did they schemes, reward incentive during the period.Following pension entitlement HMRC’s express 2015 of the publication in August Non- that apply rules to the travel of confirmation Non- reimburses the Company Directors, Executive home between expenses travel Directors’ Executive of terms Head Office.and The key the Company’s set are appointments Directors’ the Non-Executives page. on the following out in the table and fees Director Non-Executive reviewed The Group and structure annual fees that the existing concluded for The fee overleaf. See table appropriate. remain £25,000, with an is Director Non- Executive each The a committee. that chair those for additional fee the Deputy £40,000 and Chair is the to payable fee the Chairman £45,000. is to payable fee during the benchmarked also salaries were Executive where and adjusted data AIM company against year Company. the of the size reflect necessary to Good Energy Annual Report 2019 Report Annual Good Energy an Annual Bonus Plan that encompasses both both Plan Bonus encompasses that an Annual financial and non-financial annual performance out on page 79; set are which of details targets, and Directors Executive Plan for Share a Performance team, management the senior of and members out on page 80. set are which of details Details of the Company’s Nominations & Nominations the Company’s of Details out on page 67. set are Committee Remuneration Committee & Remuneration The Nominations policy a remuneration designed andhas adopted attract, able to is that the Company ensure to and Directors its Executive and motivate retain management. senior environment. in a competitive operates The Group competitive provide out to sets It therefore to appropriate its employees, all of to remuneration location and geographical environment, the business the Company. of aims strategic shareholders of align the interests to aims The Group and senior Directors Executive of with those the opportunity to giving the latter by management in the Company. interest build up a shareholding Remuneration Policy Remuneration • • Committee During the period, the Remuneration the performance to alteration a non-material agreed which measure an objective introducing criteria, the of in place talent key of retention considers No other criterion. engagement employee previous these of the operation been to made changes have during the period.schemes Information about the remuneration of the Directors Directors the of about the remuneration Information December ended 31 year the for the Company of is report This section. following out in the set 2019 is accordance in and been has prepared unaudited companies set listed AIM for with the requirements 2006 and the AIM rules. out in the Companies Act incentive and bonus share-based The Group’s 2016 and been since in place remain have schemes designed are They practice. best aligned with current the assist to talent key and incentivise motivate to and aims comprise: its strategic in achieving Group Remuneration 76 Strategic Report Governance Report Financial Statements 79 Weighting 10% 60% 20% 10% Governance Report Governance Target Between threshold and target threshold Between Target Target 2019 performance 2019 performance target against bonus being payable where threshold targets are are targets threshold where beingbonus payable unless the Group’s will No bonus be payable met. unless targets the threshold meets tax before profit in its Committee, & Remuneration the Nominations otherwise. determines discretion, Committee & Remuneration The Nominations under scheme the bonus discretion, retains also in line with individual payments any adjust to rules, performance. annually set are targets Individual performance financial the relevant of at the end and reviewed the four of each for and annual targets year, the by will be set metrics performance Company Committee. andNominations Remuneration 2020 for that the targets considers The Group therefore not and are sensitive commercially are of disclosure retrospective However, disclosed. ending 31 the year for targets against performance page. on the following December provided is 2019 ISO 14001 maintained. 14001 maintained. ISO neutralised Emissions 10.5% by and reduced per head. £1.7m 46 68% 2018 outturn Strategic objective Strategic Attract and retain employees with the right skills, knowledge skills, knowledge with the right employees and retain Attract plans growth the Company’s help deliver to and mind-set Maintain customer satisfaction ratings satisfaction customer Maintain Deliver profit growth profit Deliver Help to reduce carbon emissions reduce Help to ISO 14001 maintained. 14001 maintained. ISO neutralised Emissions 12% by and reduced per head. 2019 outturn £2.1 54 78% 7 8 reduction reduction 2 2 NPS retention Employee CO Corporate Corporate CO Corporate Absolute net promoter score promoter net Absolute retention Employee Measure tax before Profit Measure tax before profit Group This measure considered “employee engagement” in 2017 and was altered by the Committee for 2018. for the Committee by altered in 2017 and was engagement” “employee considered measure 7. This services investment. customer the Kraken to associated the £865k non-underlying costs £2.1m after of PBT on underlying8. Calculated continuing solar farm. Brynwhilach to relating £0.6m reclassification of the impact £1.7m excluding of PBT on underlying continuing 2018 calculated
Operation of the scheme of Operation a agreed Committee In 2018, the Remuneration criteria performance the to alteration non-material measure an objective introducing the scheme, for the of in place talent key of retention considers which No other criterion. engagement employee previous the bonus of the operation made to changes were duringscheme the period. individually are under scheme All bonus the bonuses 75% of of bonus capped. A maximum potential in relation salary payable is Directors’ Executive key four against performance the Company’s to and metrics performance The metrics. performance below. table in the shown are weightings their relative in the event willMaximum bonus only be payable performance these of all four for targets that stretch the targets against Performance met. are metrics the on a sliding between basis scale measured is and stretch on-target threshold, of achievement the potential of with one third starting targets, and performance 2019 targets ended 31 December 2019 the financial year outturn for and actual targets against performance The Group’s below. out in the table set are pandemic ongoing COVID-19 the of 2019, In light for threshold exceeded tax before profit Although the Group deferred. is bonus the staff Annual bonus scheme bonus Annual 6
- Total 19,422 31,911 25,842 48,259 330,625 330,625 125,434 456,059 2018 (£)
Total 46,278 31,864 25,109 32,719 33,750 367,902 367,902 537,622 169,720 2019 (£)
5
------95,000 95,000 95,000 2019 (£) Annual Bonus Annual
------22,391 22,391 22,391 2019 (£) Benefits in Kind Benefits
------27,580 27,580 27,580 Pension 2019 (£)
46,278 31,864 25,109 32,719 33,750 222,931 222,931 169,720 392,651 2019 (£) Salary/fee 3 2 4 Good Energy Annual Report 2019 Report Annual Good Energy Juliet Davenport Juliet Executive Directors Executive Will Whitehorn Sub-total Directors Non-Executive Name Emma Tinker Tim Jones Nemone Wynn-Evans John Maltby Sub-total total Overall Pro-rata for the period of directorship. Joined the Board effective 04 July 2018. effective Joined the Board directorship. the period of for 2. Pro-rata 06 February 2019. effective Joined the Board directorship. the period of for 3. Pro-rata 13 June 2019. effective the Board Left directorship. the period of for 4. Pro-rata paid5. 2018 bonus in 2019. £651,521. was directors) (including former 6. 2018 total Salaries/Fees, annual bonus and benefits Salaries/Fees, and benefits bonus annual 78 Strategic Report Governance Report Financial Statements 81 - 88,496 Cancelled/ surrendered during period - - - - - 88,496 10 Governance Report Governance - 15,000 Exercised Exercised during period - - - - - 15,000 are shown below. shown are 9 £0.05 £1.15 £1.15 £0.50 £1.25 £0.05 £0.05 Option Option price £0.75 122,472 602,233 86,956 17,390 189,052 144,000 - 42,363 Number of options options Number of as at outstanding 31 December 2019 - 15/11/2018 Date option option Date granted 13/02/2012 13/02/2012 18/09/2012 13/07/2013 22/04/2016 10/05/2017 01/06/2004 Total Name Davenport Juliet Chair of Nominations and Nominations Chair of Committee Remuneration 3 June 2020 Emma Tinker Directors’ share options share Directors’ Details of the Directors’ share options outstanding at 31 December 2019 outstanding options share Directors’ the of Details Rupert Sanderson joined the Board in January 2020. Options granted 15/11/2018. £58,427 outstanding at 31 December 2019. Option price £0.05. price at 31 December 2019. Option 15/11/2018. £58,427 outstanding granted in January 2020. Options 9. Rupert joined the Board Sanderson on 14 January in full 2019. 10. Exercised 20% Weighting 60% 20% Performance targets Performance and their relative metrics The performance shown are awards of grant the 2019 for weightings the targets considers The Group below. in the table and these sensitive be commercially to themselves retrospective However, disclosed. therefore not are will targets against performance of disclosure the relevant at the end of be provided period. measurement for achieving stretch targets. No award will vest will vest No award targets. stretch achieving for the over positive is Return Shareholder unless Total period. measurement may, Committee & Remuneration The Nominations reduce and including vesting, time up to at any been, has there where awards of level the vesting in misstatement things, a material other amongst on which information in any an error the accounts, misconduct gross based, were targets performance employee. the by or fraud Ensure long term sustainability sustainability long term Ensure operation our own of Strategic objective Strategic Drive shareholder value shareholder Drive higher customer Maintain than ‘Big 6’ rating satisfaction firms energy
reduction 2
Good Energy Annual Report 2019 Report Annual Good Energy
Earnings per share Measure to (relative score promoter net Relative companies) ‘Big 6’ energy CO Customer Performance share plan (“PSP”) share Performance 80 The existing scheme was implemented during implemented was scheme The existing remuneration external from advice 2016 following with the Company’s and in consultation consultants enhance designed It is to shareholders. largest ten and Directors Executive between alignment market current reflect and better shareholders, performance including the addition of practice, are which awards, of the vesting for conditions previously where below, detail described in more none. were there Executive to awards grant to is policy The usual salary at 50% of up to worth shares over Directors an award The maximum limit of grant. the time of financial year individual under the PSP in any any to the to annual salary, subject be 100% of would to increase to discretion Committee’s Remuneration circumstances. salary in exceptional 150% of under shall normallyscheme the granted Awards subject grant, of the date from years three vest of and satisfaction employment continued to a three over measured criteria performance period. year on a measured is targets against Performance the part of relevant the sliding20% of with scale, for 50% vesting level, at threshold vesting award 100% vesting to through performance on-target Operation of the scheme of Operation Strategic Report Governance Report Financial Statements 83 Governance Report Governance IFRS 16 IFRS 16 introduced plc has Group Good Energy 31 to time in its financial year the first for Leases December 2019. the modified adopt to chosen has The Group this implementing of approach retrospective in the information comparative and such, as standard, ending 31 December 2018 the year for Report Annual been restated. not has under IFRS a 16 will have requirements The new the Group in which the way impact significant contracts. its lease for accounts for and liabilities will assets be accounted Additional in the Costs Financial Position. of in the Statement Income will change Comprehensive of Statement a depreciation by replaced expense, a lease from in results This along with a finance cost. charge which the lease, of in the earlier years costs increased and the assets of the values time as over will reduce liabilities decrease. standard this of the implementation of The effects this 2.4 and 16 of in notes detail in more discussed are Report. Annual of the shares and no known agreements between the between agreements and no known the shares of of on the transfer with restrictions shares of holders rights. voting of or exercise shares issue shares to Authority the to given in 2019, authority was the AGM At a nominal up to shares ordinary new allot to Directors the of one-third to £276,192, equivalent of value at that time. The the Company of capital share issued thirds two up to allot to authorised also were Directors but the Company, of capital share issued the total of issue. a rights of only in the case in 2020, the AGM until valid are authorities These authority this at renew to propose and the Directors the AGM. authority this will allow believes The Board to respond to flexibility retain to the Company arise. and opportunities they as circumstances rights voting exercising Deadlines for and appointments, and paper proxy Electronic the by be received must instructions, voting before than less 48 hours not Registrar company’s meeting. a general Dividends dividend 2019 final the proposed to relating Details on page 9. out in the Chairman’s Statement set are Directors during the that held office the Directors The names of out on page 58-59. set are financial year % 4.0% 7.0% 25.1% 669,827 1,167,014 4,169,948 Number Number of shares of Martin Edwards Hargreaves Lansdown plc Lansdown Hargreaves Shareholder Limited Group Ecotricity Share class rights Share Ordinary shares out in the Company’s set are rights class The full share at view to available are which Association of Articles and summarised below: goodenergygroup.co.uk share ordinary each for member one vote Each has to: entitled are shares ordinary of held. Holders and Accounts; Report Annual the Company’s receive the of meetings and speak at general attend are or, if they proxies one or more appoint Company; and exercise representatives; corporate corporations, may receive shares ordinary of Holders rights. voting under the shares or ordinary a dividend in cash and dividend scrip scheme on liquidation Company’s the Company. of in the assets may share requirements and consent agreements Shareholder under which arrangements no known are There in the the shares of any carried by financial rights than the holder other a person held by are Company Statutory and other information and other Statutory information company General company a public is limited PLC Group Good Energy in England and Wales. incorporated and principal office registered The Company’s Hill, Monkton Reach, Monkton is: business of place and SN15 1EE the registered Chippenham, Wiltshire, number 04000623. is capital Share of shares On 31 December ordinary 2019, 16,621,245 on the listed is The Company in issue. were 5p each the London (AIM) of Market Investment Alternative the Social member of a founding is Exchange, Stock been have (SSE) and its shares Exchange Stock the NEX of on the Social segment Impact trading 5 January since 2016. Market Growth shareholders Significant shareholders 31 December the following 2019, At the issued 3% of exceeding an interest had notified (excluding the Company of capital share ordinary defined as families and their respective Directors out on set are which of details in the AIM rules, page): the next Good Energy Annual Report 2019 2019 Report Report Annual Annual GoodGood Energy Energy 8282 Strategic Report Governance Report Financial Statements 85 Governance Report Governance The Directors proposed a final dividend for the year the year a final dividend for proposed The Directors the ongoing COVID-19 Due to 2.6p per share. of proposed subsequently have the Directors outbreak more provide dividend, this to of the payment defer to the pandemic. to response Group’s in the flexibility the COVID-19 monitor to will continue The Directors on ansituation the and ongoing basis consider the final dividend. of payment 27%. The gap predominantly arises because the because arises gap27%. The predominantly in men than women more employs currently Group particularly in Science, roles, middlemanagement related and (STEM) Maths Technology Engineering, which Report, full Gender Pay The Group’s functions. close to the Board by initiated the actions details also gender pay gap, published on its website. is the Group’s Modern Slavery of risk the inherent considers Although the Group within its modern slavery of issues encountering be affiliations to and strategic chains supply business, and the that the Group an issue nonetheless it is low, full statement The Group’s seriously. very takes Board 2015 for Act the Modern Slavery 54 of under section the period 31 December ended published on 2019 is its website. Transactions Party Related 34 in the out in note set are party transactions Related Financial statements. Auditors to Information of Disclosure no relevant is there aware, is Director each as So far are auditors the Company’s which of audit information that all the steps taken has and Director each unaware, make to in order a Director as taken have to ought they and audit information relevant any of aware themselves of aware are auditors that the Company’s establish to and should given, is confirmation This that information. of with the provisions in accordance be interpreted, 2006. the Companies 418 of Act Section date the Balance after Sheet Events became a COVID-19 of 2020 the outbreak In March wide-ranging the outbreak’s of Inglobal light issue. a detailed undertaken have the Group implications, operations continued ensure to review going concern with a particular focus the period affected, throughout date, plans. To continuity and business flows on cash financial impact significant any seen not has the Group to it continues however outbreak, the COVID-19 from the coming throughout closely situation the monitor and months. weeks that the latest concluded have The Directors these signing of of the date up to developments further provided not have financial statements at existing about the circumstances information any expect do not therefore date, the reporting be to financial statements these to adjustments a consequence. made as a have the Directors review, the detailed of a result As will continue that the Group expectation reasonable fall they as its commitments and meet in operation material to period, the going concern subject due over going concern liquidity. The detailed over uncertainties & Risk per in full the Audit can be found review on pages 72-73. Report Management - - 3.78 0.01 0.06 0.17 capital %age of %age of issued share issued share
- - 1,523 9,489 2018 28,000 627,455 as at 31 as at 31 No. shares No. shares December December 3.78 0.10 0.01 0.06 0.06 0.31 1 capital %age of %age of issued share issued share the Company has obtained shareholder approval approval shareholder obtained has the Company General at its Annual arrangements the referral for that requesting 2015 and since anticipates Meetings General at the Annual be refreshed authorisation in 2020. Meeting on the environment Impact its reducing to committed is The Company and the carbon from emissions impact environmental achieved was accreditation ISO14001 its operations. that confirmation independent during 2017, providing measuring for standards international meets the Group performance. environmental improving and continually its Scope 1 and measures regularly The Company Scope 3 indirect Scope and many as 2 emissions possible to yet not it is possible. Where as emissions neutralised are these emissions, eliminate or avoid More projects. carbon reduction international through Report. in the Strategic can be found information Gender Pay in 2017 of the introduction welcomed The Board a strong has The Group reporting. Gender Pay gender balance and equality to at all commitment have to proud is The Board the business. of levels : male) at Board an equal gender balance (female the business within 50% women over and just level 2019 is mean pay gap for The Group’s overall.
1,560 9,489 9,500 2019 16,770 52,000 627,455 as at 31 as at 31 No. shares No. shares December December 2 3 Good Energy Annual Report 2019 Report Annual Good Energy Juliet Davenport Juliet Current Directors Current Rupert Sanderson Tim Jones Tim Jones Nemone Wynn-Evans Will Whitehorn Emma Tinker Certain of the Directors hold share options as detailed on pages 81 within the Nominations & Remuneration Report. & Remuneration on pages 81 within the Nominations detailed as options hold share the Directors of 1. Certain 638 Ordinary owns One daughter Shares. 43,000 Ordinary name. Her husband owns in her own in the Company Shares 583,179 Ordinary holds Davenport 2. Juliet daughter. another on behalf of Shares a further 638 Ordinary holds Davenport and Juliet Shares participation dividend. in the scrip of a result as during the year holding increased 3. Emma Tinker’s 84 Referral Arrangements/ Political Donations Political Arrangements/ Referral operate to and continues operated has The Company political parties. It with certain arrangements referral with arrangements, be commercial to these considers referred customer each made for payment a referral 2006 the Companies Act However, Good Energy. to political or the donations of the making of definitions a capable of are political expenditure incurring of transparency, of In the interests wide interpretation. Future developments & research developments Future in the Chief given are developments future of Details Review. within the Strategic Review Executive’s the of development the future to key is Innovation does not The Group propositions. business Group’s expenditure and development research incur material development research, selected but does undertake grant-funded. often are which projects and innovation Financial instruments bank include financial instruments The Group’s bond a corporate borrowings, loans and other and overdraft. raise to is instruments these of The principal objective manage purposes and to corporate general for funds are instruments these of Furtherfinancial risk. details 26 in the Financial Statements. in note given The interests (all of which are beneficial unless otherwise stated) of the Directors and their families as defined defined as and their families the Directors of stated) unless otherwise beneficial are which (all of The interests plc are: Group Good Energy of capital share in the issued Rules in the AIM Directors’ interests and their interests in the Company’s shares in the Company’s and their interests interests Directors’ Strategic Report Governance Report Financial Statements 87 Governance Report Governance the Group’s consolidated financial statements, financial statements, consolidated the Group’s with in accordance been prepared have which a give Union, the European by IFRSs adopted as liabilities, financial the assets, of view true and fair and the Group; of andposition profit fair a includes and Accounts Report the Annual of and performance the development of review and the Group and of position the the business of with a description together company, parent that it faces. and uncertainties the principal risks no relevant is there aware, is the Director as far so and parent the Group which of audit information and unaware; are auditors company’s ought that they all the steps taken have they make to in order a Director as taken have to audit relevant any of aware themselves that the Group establish and to information of aware are auditors company’s and parent that information. William Whitehorn Chairman 3 June 2020 • • the at the date office in Director each of In the case approved: is Report Governance • • including the and Accounts, Report The Annual Report, & Directors’ Governance Report, Strategic have and Financial Statements, Report Remuneration and are the Board by and approved been prepared with, and with reliance published in accordance law. The liabilities on, applicable English company and Report the Annual to in relation Directors of and restrictions the limitations to subject are Accounts law. such by provided the parent company financial statements, which which financial statements, company the parent with IFRSs as in accordance been prepared have and a true Union, give the European by adopted liabilities, financial position the assets, of view fair the Company of and profit The Directors have prepared the Group financial Group the prepared have The Directors by with (IFRSs) adopted as in accordance statements financial company Union and parent the European Financial with International in accordance statements the by (IFRSs) adopted as Standards Reporting Union. European adequate keeping for responsible are The Directors and show to sufficient that are records accounting transactions company’s and parent the Group explain at any accuracy with reasonable and disclose and parent the Group time the financial of position enable them to also must records These company. with comply that the financial statements ensure the Group 2006 and, regards as the Companies Act Regulation. the IAS 4 of Article financial statements, system the for responsible also are The Directors of the assets safeguarding for controls, internal of taking and for company and parent the Group of and detection the prevention for steps reasonable irregularities. and other fraud are company parent the ultimate of The Directors the of and integrity maintenance the for responsible in Legislation website. company’s parent ultimate and the preparation Kingdom governing the United from may differ financial statements dissemination of jurisdictions. in other legislation Report that the Annual consider The Directors balanced fair, a whole, is as taken and Accounts, the information and provides and understandable and the Group assess to shareholders necessary for business and position performance, company’s parent model and strategy. are names and whose functions the Directors, of Each confirm report & Directors in the Governance listed their knowledge: of best the that, to •
Good Energy Annual Report 2019 Report Annual Good Energy
select suitable accounting policies and then accounting suitable select apply them consistently; Financial applicable International whether state the by (IFRSs) adopted as Standards Reporting the for been followed Union have European and IFRSs adopted as financial statements Group for been followed Union have the European by any to subject financial statements, the Company in and explained disclosed departures material the financial statements; that estimates and accounting judgements make and and prudent; reasonable are on the going the financial statements prepare to inappropriate unless it is basis concern will company and parent that the Group presume in business. continue 86 • • • • The Directors submit their Annual Report and Report their Annual submit The Directors and Accounts) Report (Annual Financial Statements ended the year plc for Group Good Energy for required report 31 December 2019. The directors’ this 2006 comprises under the Companies Act and the Nominations Report & Directors’ Governance Report. & Remuneration review out a fair set to required is The Company the of and a description activities the Group’s of the business facing and uncertainties principal risks requirement This Report. Strategic in the detailed as and the development of an analysis includes during the business the Group’s of performance at the the Group and of the position financial year, with its size period consistent the reporting end of and complexity. the Annual preparing for responsible are The Directors with applicable in accordance and Accounts Report law which including company law and regulation, financial statements prepare to the Directors requires law the Under company financial year. each for the financial statements approve not must Directors true and a fair give that they satisfied are unless they and parent the Group of affairs of the state of view and the Group of or loss the profit and of company that period. for company parent the Directors the financial statements, In preparing to: required are financial statements in respect of the annual report and the and the report the annual of in respect Statement of Directors’ responsibilities responsibilities Directors’ of Statement Strategic Report Governance Report Financial Statements 89 Governance Report Governance We assessed the Board’s controllable mitigation mitigation controllable the Board’s assessed We the business the ability of plans and considered the bonds in full including and repay operate to financial covenants. compliance with Group’s to supporting documentation obtained We of the plausibility and achievability evaluate mitigation plans. management’s to cashflows future forecast compared We in line are variations ensuring data, historical of and understanding with our expectations of the reliability and considered the business forecasts. past on analysis sensitivity our own performed We and cashflows forecast managements tested stress the reverse considered model. management within disclosures of adequacy the assessed We and Accounts Report the Annual • • • •
Revenue recognition, specifically the estimated unbilled income specifically the estimated recognition, Revenue through override management to the susceptibility due to recognition Revenue manual entries inappropriate, provision loss credit the expected of Valuation 3 components of financial information the complete an audit of performed We a further 9 components on specific balances for and audit procedures specific full, or specified audit performed we where The components and 95% Revenue 100% of tax, before Profit 97% of for accounted procedures assets. Total of revenues 0.8% of represents £1.0m which of materiality group Overall • • • • • • We obtained management’s forecast cash flows flows cash forecast management’s obtained We the period covering calculations and covenant 30 June 2021. We signing to of the date from as flows, the cash of accuracy the clerical tested covenants the forecast of the calculation as well the financial of in respect and the headroom compliance. covenant of the Board by used the assumptions audited We the going concern of in respect Directors reflecting test stress and reverse assessment determine to COVID-19 of impact the potential breaching decline revenue, in the magnitude of and covenants trading counterparty of an inability to to rise give that would cashflow called the lenders the bonds in the event repay taking in June (after 2021 repayment for mitigations). the controllable consideration into Overview of ouraudit approach of Overview audit matters Key scope Audit Materiality for customers to pay debts as they fall due. This due. This fall they as pay debts to customers for may be unable to means the Group uncertainty becomes due on when this its bondholders repay its breaches June 2021 and may mean the Group 2.3, these in note stated As covenant. counterparty set as matters other along with conditions, or events uncertainty a material caused 2.3, have in note forth and on the group doubt significant that may cast a going concern. as continue ability to company’s of modified in respect Our not opinion is matter. this to our audit responded has how describe below We going concern: to related uncertainty the material • • the parent company financial statements have have financial statements company the parent with in accordance prepared been properly Union and as the European by IFRSs adopted as the of with the provisions applied in accordance and Companies Act; been prepared have the financial statements the of with the requirements in accordance 2006. Companies Act believe that the audit evidence we have have we that the audit evidence believe • • Good of the financial statements audited have We comprise: plc which Group Energy We provide to and appropriate sufficient is obtained our opinion. for a basis Going Concern to Related Uncertainty Material the financial 2.3 to note to attention draw We the that the ability of indicates which statements a going concern as continue to and Company Group With the current uncertainty. material to subject is uncertainty is 19 in the UK, there COVID of outbreak periods cause which lockdown the length of over and the ability consumption in electricity decreases Parent Company Statement of Financial Position as at as Financial Position of Statement Company Parent 31 December2019 Changes in of Statement Company Parent then ended the year Equity for Cash Flows of Statement Company Parent then ended the year for the financial 37 to 1 to notes Related significant including a summary of statements policies accounting Parent company Parent
Good Energy Annual Report 2019 Report Annual Good Energy
Good Energy Group plc’s group financial plc’s group Group Good Energy financial company and parent statements a give “financial (the statements”) statements the group’s of the state of view true and fair at 31 as affairs company’s the parent and of the for profit the group’s December 2019 and of then ended; year been have financial statements the group with IFRSs as in accordance prepared properly Union; the European by adopted Consolidated Statement of Changes in of Statement Consolidated then ended the year Equity for Consolidated Statement of Comprehensive Comprehensive of Statement Consolidated then ended the year Income for Cash Flows of Statement Consolidated then ended the year for the financial 37 to 1 to notes Related including a summary of statements, policies accounting significant Group at as Financial Position of Statement Consolidated 31 December2019 The financial reporting framework that has been applied in their preparation is applicable is law and been that has applied in their preparation framework The financial reporting to Union and, regards as the European by (IFRSs) adopted as Standards Financial Reporting International the Companies of with the provisions applied as in accordance financial statements, company the parent 2006. Act 88 • • Opinion In our opinion: members of Good Energy Group plc Group Good Energy of members Independent Auditors’ report to the the to report Auditors’ Independent Basis for opinion opinion Basis for with our audit in accordance conducted We (UK) (ISAs on Auditing Standards International (UK)) and applicable law. Ourresponsibilities further described the in are standards under those the financial the audit of for responsibilities Auditor’s are We below. our report of section statements in company and parent the group of independent that are requirements with the ethical accordance in the financial statements our audit of to relevant as the UK, including the FRC’s Standard Ethical fulfilled our have and we entities, listed applied to with in accordance responsibilities ethical other requirements. these Strategic Report Governance Report Financial Statements 91
Governance Report Governance Audit Committee Committee Audit Key observations observations Key the to communicated Based on the audit procedures on the auditBased procedures were manual entries performed including post appropriate, during the adjustments close process. consolidation testing Our journal entry identify did not procedures inappropriate of instances in the override management across revenue of recognition the Group. Our response to the risk to Our response We performed walkthroughs of the of walkthroughs performed We month various at process consolidation including the year, the throughout ends the design assess end to and year interim over controls key of and implementation process. the manual consolidation specifically designed procedures Audit management of the risk address to extracted data using included override test to system the accounting from journal entries of the appropriateness other as well as revenue, impacting of made in the preparation adjustments on with a focus the financial statements, manual journals. and testing selecting the results verified all we For locations in the used entities the consolidated of the agreeing by manual consolidation in the consolidation included results the by audited the results to directly audit team. all journals consolidation selected We performance 15% of exceeding to evidence and obtained materiality the of and the validity accuracy verify journals being posted. Risk due recognition Revenue to the susceptibility to override management inappropriate through entries. manual policies (page Accounting the 4 of 112); and Note Financial Consolidated (page 127). Statements that all except consider We of income the accrued revenue Good Energy’s under reported transactions IFRS guidance are existing and non-complex, routine, with no driven, systems the applied over judgement amount. recorded the accounting However, susceptible is revenues for override management to of the recording through journal manual topside either in the entries or during underlying ledgers process. the consolidation due area on this focused We the of the manual nature to and process consolidation judgemental the non-routine the of some of nature manual journals posted. There were no changes in the key audit matters in the current year auditor’s report compared to the prior to compared report auditor’s year in the current audit matters no changes in the key were There report. auditor’s year
Key observations observations Key the to communicated Committee Audit We did not identify material material identify did not We the unbilled in income errors of nor evidence report, manipulation of management report. within this revenue that conclude We in assumptions management’s demand are customer of respect range within an acceptable that the basis concluded We unbilled the of calculation of appropriate. is accrual income
We obtained an understanding of of an understanding obtained We and gas the supply of for the process and reading services, meter electric ascertain to billing in order related adjustments of the completeness of or deferral the accrual reflect to revenue. key the design of assessed We generated system to linked controls the estimation to relating information revenue. measured for process the billing the inputs into tested We tariffs reads, including meter system, consumption. average and estimated bills that calculated ensure to was This reflected revenues and the resultant prices agreed contract accurate and usage. income the accrued compared We a end for year post bills raised to the confirm to customers sample of and usage the estimated of accuracy recorded. revenue assumptions key the corroborated We in recognising management made by and internal obtaining by revenue, on demand. data external was revenue whether tested We period by in the correct recognised income the accrued recalculating and billed date on the last based billed. the amount that to compare analytical procedures performed We balances comparing revenue by expectation against the year for data consumption industry from significant support for and obtaining that data. against variances we our journal testing, In performing entries to attention paid increased on non- focusing revenue impacting in raised and those postings system the year. of weeks two the last full scope audit performed We in 2 area risk this over procedures 100% of covered which locations, amount. the risk Our response to the risk to Our response Our procedures included: Our procedures • • • • • • • • • Good Energy Annual Report 2019 Report Annual Good Energy Revenue recognition, recognition, Revenue specifically the estimated unbilled income policies (page Accounting the 21 of 112); and Note Financial Consolidated (page 154) Statements material The Group’s to relate streams revenue and gas of the provision services. electricity revenue over risk This specifically arises recognition metered from in income to services amounting £18.7m (2018: £18.0m), an estimation requires which unbilled of the amount of end. at the year charges using calculated is This system of a combination information, generated customer on previous based with together usage, volume judgements management on impact the likely to as as such factors of usage Due to variations. seasonal being income the accrued of the risk an estimation, high. is bias management in decreased has The risk the due to year the current and process billing system being fully operational now 2 years. for Risk 90 Key audit matters audit matters Key significance in our audit most of were judgment, that, in our professional matters those are audit matters Key material of risks assessed significant period and the most include the current of the financial statements of had which those included matters These identified. that we fraud) due to or not (whether misstatement the in the audit; and directing resources the allocation of audit strategy, on: the overall effect the greatest the financial our audit of of in the context addressed were matters These team. the engagement of efforts matters. opinion on these a separate provide do not and we and a whole, as in our opinion thereon, statements Strategic Report Governance Report Financial Statements 93 Governance Report Governance on 2 full scope components, 4 specific scope and 1 scopeon 2 full components, of 100% for accounted which specified procedure scope on 1 full component and procedures the profit accounted which and 5 specific scope components entities. the loss-making 98% of for performed we where components The reporting 100% (2018: 97%) for accounted audit procedures the and 63%) of 95% (2017: Revenue the Group’s of the full year, current the For assets. Total Group’s of 93% (2017: 95%) contributed scope components materiality, calculate to used Revenue the Group’s assets. Total Group’s the and 58%) of 59% (2018: 7% contributed The specific scope components calculate to used Revenue the Group’s (2018: 6%) of Total the Group’s and 36% (2018: 23%) of materiality may not components these The audit scope of assets. the of accounts all significant of testing included have the coverage to contributed but will have component The 9 components the Group. for tested significant of specific procedures perform to instructed were WIP verification, asset fixed of aspects certain over valuation. sale held for assets and current valuation the 0% of represented 2 component The remaining performed we component, this For Revenue. Group’s and including analytical review procedures, other to respond eliminations to intercompany of testing the to misstatement material of risks potential any financial statements. Group obtained the coverage illustrate The charts below our audit teams. by performed the work from otal otal assets ull cope co ponent pec c cope co ponent t er procedure Reven e ull cope co ponent pec c cope co ponent t er procedure An overview of the scope of our audit the scope of of overview An Tailoring the scope Tailoring of audit our risk, evaluation of Our assessment performance and ourmateriality allocation of each our audit scope for determine materiality enables this together, Taken within the Group. entity financial anthe consolidated opinion on form to us the profile, risk size, account into take We statements. group of and effectiveness the group of organisation environment changes in the business wide controls, audit results Internal recent as such factors and other at be performed to work of the level when assessing entity. each to misstatement material of the risk In assessing we ensure and to financial statements, the Group significant of coverage quantitative had adequate the 15 of the financial in statements, accounts 13 selected we the Group, of components reporting all UK, which within the entities covering components units the principal within business represent the Group. an performed we selected, Of the 13 components 3 of financial information the complete audit of were which scope (“full components”) components characteristics. or risk on their size based selected (9 “specific scope 10 components the remaining For we and 1 “specified procedures”), components” on specific accounts audit procedures performed the had considered that we within that component on the significant impact the greatest for potential either because the financial in statements accounts profile. or their risk accounts these of the size of 7 profit split is between the Group of profit The net loss £5.6m and 8 (1 nil profit) of making entities procedures performed £3.2m. We of making entities
Key observations observations Key the to communicated Committee Audit We assessed management’s management’s assessed We and concluded judgments within is that the ECL provision and range an acceptable collections of likelihood reflects periods. in future We performed a walkthrough of of a walkthrough performed We the ECL calculating for the process the design and assessed provision controls. key of effectiveness and data of the integrity tested We the generate utilised to the report debt of ageing and categorisation billingwithin the Company’s system. made assumptions We corroborated rates on collection management by analysis sensitivity and performed on the rates these of on the impact ECL provision. that the a view formed We management by made assumptions within our were rates on collection to agreeing by range expected the over party confirmations third sensitivity and performed used rates rates these of on the impact analysis on the ECL provision. IFRS of impact the assessed We by prepared 9 on the calculation and challenged management on expected based rates provisioning and history past through losses credit conditions. market predicted against analysis We performed end compared held at year debt end year post collected cash to the categorisation into disaggregated in management by customers used of the to assess calculation the provision rates. provisioning of reasonableness of the appropriateness tested We and adjustments journal entries the ECL provision impacting the to close particularly raised those date. balance sheet full scope audit performed We in 2 area risk this over procedures the 100% of covered which locations, amount. risk Our response to the risk to Our response Our procedures included: Our procedures • • • • • • • • Good Energy Annual Report 2019 Report Annual Good Energy Expected Credit Losses Credit Expected policies (page Accounting the 21 of 118); and Note Financial Statements (page 154) credit an is expected There £9.2m of (ECL) loss provision year- (2018: £5.8m) at the amounts gross end against of customers from receivable £39.0m (2018: £31.5m). The simplified approach ECL under IFRSto 9 using calculated was judgement management’s recovery likely the future of rates. that the a risk is There by used assumptions in calculating management may be the ECL provision management to susceptible of andbias the valuation trade against ECL amounts and unbilled receivables may beincome misstated. due increased has The risk on the the changes to are income accrued how and estimated. calculated Risk 92 Strategic Report Governance Report Financial Statements 95 Governance Report Governance
Auditor’s responsibilities for the audit of the the of the audit for responsibilities Auditor’s financial statements assurance reasonable obtain to are Ourobjectives a whole as the financial statements about whether due whether misstatement, material from free are report an auditor’s issue and to or error, fraud to a is assurance our Reasonable opinion. that includes that a guarantee not but is assurance, of high level (UK) with ISAs in accordance an audit conducted when it misstatement a material detect will always or error fraud can arise from Misstatements exists. if, individually in the or material considered and are to be expected reasonably could they aggregate, on taken users of decisions the economic influence financial statements. these of the basis the for our responsibilities of A further description on the located is the financial statements audit of at https://www. Council’sFinancial Reporting website description This frc.org.uk/auditorsresponsibilities. report. our auditor’s part of forms our report Use of members, the company’s to made solely is report This Part 3 of with Chapter a body,as in accordance 2006. Our audit work the Companies16 of Act the to state might that we so beenhas undertaken required are we matters those members company’s no and for report them in an auditor’s to state to by permitted extent the fullest purpose. To other to responsibility assume or accept do not law, we and the company’s than the company other anyone report, this for our audit work, a body, as for members formed. have we the opinions or for John Howarth John Howarth auditor) (Senior statutory LLP, Statutory & Young Ernst and on behalf of for Auditor Bristol 3 June 2020
adequate accounting records have not been not have records accounting adequate adequate or returns company, the parent by kept from been received not our audit have for or us; by visited not branches not are financial statements company the parent and records with the accounting in agreement or returns; remuneration directors’ of disclosures certain made; or not law are specified by and allthe information received not have we our audit. for require we explanations the information given in the strategic report and report strategic in the given the information for the financial year for report the directors’ is prepared are financial the statements which and with the financial statements; consistent have report and directors’ report the strategic with applicable in accordance been prepared legal requirements. by exception by Matters on which we are required to report report to required are on which we Matters and understanding the knowledge of In the light and its company and parent the the group of the audit, we of in the course obtained environment in the misstatements material identified not have report. or the directors’ report strategic the following of in respect report to nothing have We 2006 the Companies which Act to in relation matters if, in our opinion: you to report to us requires • • • • directors of Responsibilities responsibilities in the directors’ fully more explained As out on pages 86-87, the directors set statement the financial of the preparation for responsible are a give that they being satisfied and for statements as control internal such and for view, true and fair enable the necessary is to determine the directors from free are that financial statements of preparation or error. fraud to due whether misstatement, material the directors the financial statements, In preparing and parent the group assessing for responsible are a going concern, as continue ability to company’s going to related applicable, as matters disclosing, of basis and the going concern concern using to either intend unless the directors accounting or to company or the parent the group liquidate but alternative no realistic or have operations, cease do so. to • • Opinions on other matters prescribed by the the by prescribed matters Opinions on other 2006 Companies Act in the undertaken In our on the work opinion, based the audit: of course Other information Other information the information comprises information The other out on pages 1-87, set in the annual report included and our auditor’s than the financial statements other the for responsible are The directors thereon. report information. other does not Our opinion on the financial statements the extent to and, except information the other cover do not we report, in this stated explicitly otherwise thereon. conclusion assurance of form any express the financial with our audit of In connection the other read to is our responsibility statements, the whether and, consider in doing so, information with the inconsistent materially is information other obtained or our knowledge financial statements be materially to appears in the audit or otherwise inconsistencies material such identify If we misstated. are we misstatements, material or apparent a material is there whether determine to required or a material in the financial statements misstatement on If, based information. the other of misstatement that there conclude we performed, have we the work information, the other of misstatement a material is that fact. report to required are we regard. in this report to nothing have We Reporting threshold threshold Reporting are misstatements which identified below amount An as being clearlyconsidered trivial. would that we Committee with the Audit agreed We in audit differences them all uncorrected to report at 5% set is £0.05m (2018: £0.05m), which of excess below differences as well as planning materiality, of reporting warranted that, in our view, that threshold grounds. on qualitative against misstatements uncorrected any evaluate We materiality of measures the quantitative both relevant other of and in light above discussed our opinion. in forming considerations qualitative the likelihood of material misstatement is higher. is misstatement material of the likelihood purpose the for locations component at work Audit financial significant over audit coverage obtaining of on a based undertaken is accounts statement The materiality. performance total of percentage is component each for set materiality performance the component and of scale risk on the relative based of a whole and as our assessment the Group to In the component. at that misstatement of the risk materiality performance of the range year, current £0.4m. £0.1m to was components to allocated Good Energy Annual Report 2019 Report Annual Good Energy 94 The application of materiality at the individual account materiality The application of an to reduce to at an amount is set It or balance level. that the aggregate the probability level low appropriately misstatements and undetected uncorrected of materiality. exceeds together our assessments, risk On of the basis control overall the Group’s of with our assessment that performance was our judgement environment, our planning 50% (2018: 50%) of was materiality have namely £0.5m (2018: £0.45m). We materiality, as percentage at this materiality performance set the of on our based understanding our expectation, that is misstatements, of history and past the Group Performance materiality Performance Materiality that, an omission or misstatement of The magnitude be could reasonably individually or in the aggregate, the the economic decisions of influence to expected provides Materiality the financial statements. of users our of and extent the nature determining a basis for audit procedures. be £1.0m to the Group for materiality determined We million (2018: £0.9 million), 0.8% (2018: is which had 2016, Good Up until Energy Revenue. 0.8%) of their main strategic as growth on revenue a focus was during their profitability time this objective, has Although the Group significantly. fluctuating profit sustainable to changed their focus recently the group by use on the continued based growth, a KPI and as the prominence growth revenue of we in their reports analysts by revenue to accorded our base to be appropriate to that it continues believe also is This on revenue. materiality of determination audit. with the prior year consistent Company the Parent for materiality determined We be £0.3 million (2018: £0.2 million),to 1.6% is which Equity. (2018: 1.6%) of initial reassessed our audit, we of During the course actual reflect it to and updated materiality on our having based initial materiality Revenue, Revenue. forecast We apply the concept of materiality in planning materiality of apply the concept We of the effect the audit, in evaluating and performing audit on the and in forming misstatements identified our audit opinion. Our application of materiality Our application materiality of Involvement with component teams teams component with Involvement the audit the purposes of for performed All audit work audit team. the Group by undertaken was No significant changes identified in relation to prior to in relation identified changes No significant scoping. year Changes from the prior year year the prior Changes from Strategic Report Governance Report Financial Statements - - 97 16 901 901 5.6p 5.5p (56) 2018 1,644 6,649 2,304 10.0p 10.2p (660) (687) 33,449 £000’s (4,361) 116,915 (83,466) (26,800) ------2018 Non- items £000’s underlying underlying - - 16 901 901 5.6p 5.5p (56) 2018 1,644 6,649 2,304 10.2p 10.0p (660) (687) Financial statements 33,449 £000’s (4,361) 116,915 (83,466) (26,800) Underlying - 166 254 254 1.6p 1.5p 7.5p 7.2p (42) (42) (32) 2019 1,216 5,573 1,258 (930) 31,657 £000’s (4,439) 124,258 (92,601) (26,084) ------164 Non- 2019 2019 (865) (701) (701) (701) (865) (865) (4.3p) (4.2p) (4.3p) (4.2p) £000’s underlying items (note 7) (note items - 166 955 955 5.9p 5.7p (42) (32) 2019 11.8p 11.4p 1,917 6,438 2,123 (206) (930) £000’s 31,657 (4,439) 124,258 (92,601) (25,219) Underlying 6 6 7 7 6 6 14 14 14 14 11 12 19 13 13 Note Basic Diluted Basic Diluted OTHER COMPREHENSIVE INCOME: COMPREHENSIVE OTHER for income comprehensive Other tax of net year, the COMPREHENSIVE TOTAL YEAR THE INCOME FOR OF OWNERS TO ATTRIBUTABLE COMPANY PARENT THE Earnings per share Earnings per share (continuing operations) REVENUE Cost of sales PROFIT GROSS Administrative expenses PROFIT OPERATING Finance income Finance costs Share of loss of associate TAX BEFORE PROFIT Taxation FROM YEAR THE FOR PROFIT OPERATIONS CONTINUING (Loss) from discontinued operations, before tax Taxation on discontinued operations PERIOD THE FOR PROFIT financial statements. these part of 168 form on pages 106 to The notes Consolidated Statement of Comprehensive Income Comprehensive of Statement Consolidated ended 31 December 2019 the year For 102 106 98 100 105 104 103 97
Good Energy Annual Report 2019 Report Annual Good Energy
96 Parent Company Statement of Changes Equity in of Statement Company Parent Consolidated Statement of Financial Position of Statement Consolidated Consolidated Statement of Comprehensive Income Comprehensive of Statement Consolidated Parent Company Statement of Cash Flows of Statement Company Parent the Financial Statements to Notes Consolidated Statement of Cash Flows Cash Flows of Statement Consolidated Consolidated Statement of Changes in Equity of Statement Consolidated Parent Company Statement of Financial Position of Statement Company Parent Financial statements Strategic Report Governance Report Financial Statements 99 - - 927 1,446 6,263 54,464 56,837 36,864 43,127 99,964 118,790 39 60 Financial statements 903 1,294 3,057 56,744 58,980 35,487 38,604 97,584 116,364 26 25 28 19 26 29 19 Juliet Davenport Juliet Executive Chief 3 June 2020 current liabilities Borrowings current Non-current liabilities Deferred taxation Provisions for liabilities Long term financial liabilties Total non- Current liabilities Current Borrowings and other financial liabilities Trade and other payables Total current liabilities Short term financial liabilities Total liabilities TOTAL EQUITY AND LIABILITIES on 3 June 2020 and Directors of the Board by approved 168 were on pages 97 to The financial statements signed on its behalf by: financial statements. these part of 168 form on pages 106 to The notes - - - - 829 2018 3,586 4,166 8,580 6,649 6,088 (810) £000’s 50,351 58,103 29,796 15,662 60,687 12,719 18,826 118,790 - 426 615 474 832 2019 6,483 4,454 4,548 9,941 5,707 (549) £000’s 46,326 62,852 29,430 13,667 53,512 12,790 18,780 116,364 3 3 15 16 17 19 19 20 21 22 23 24 24 24 Note current assets
Good Energy Annual Report 2019 Report Annual Good Energy
Property, plant and equipment Property, plant and Non-current assets Non-current Right of use assets Intangible assets Restricted deposit accounts Equity investment in associate Other interests in associate Total non- Current assets Current Inventories Trade and other receivables Cash and cash equivalents Restricted deposit accounts Disposal groups held for sale Total current assets TOTAL ASSETS Share premium account Called up share capital Capital and reserves Equity andEquity liabilities Retained earnings Employee Benefit Trust shares Total equity attributable to members of the Parent Company 98
As at 31 DecemberAs 2019 no: 04000623 registered Company Consolidated Statement of Financial Position of Statement Consolidated Strategic Report Governance Report Financial Statements 101 - - 340 7,534 7,874 17,275 17,275 25,149 41,755 39 60 Financial statements 248 7,802 8,110 16,790 16,829 24,939 39,683 26 19 26 19 29 Juliet Davenport Juliet Executive Chief 3 June 2020 current liabilities Borrowings Non-current liabilities liabilities Long term financial Total non- Current liabilities Current financial liabilities Borrowings and other Total current liabilities Short term financial liabilities Trade and other payables Total liabilities TOTAL EQUITY AND LIABILITIES The Parent Company’s loss for the financial year was £1,554,978 (2018: gain of £305,059). The financial £305,059). of £1,554,978 (2018: gain was the financial year for loss Company’s The Parent on 3 June 2020 and signed on its Directors of the Board by approved 168 were on pages 97 to statements behalf by: financial statements. these part of 168 form on pages 106 to The notes - - - - 6 32 241 920 309 829 2018 5,000 6,261 3,862 (804) £000’s 35,247 35,494 41,755 12,719 16,606 - - 2 47 98 232 426 615 832 2019 3,500 5,603 9,201 1,671 (549) £000’s 29,160 30,482 39,683 12,790 14,744 19 19 18 21 22 24 24 24 Note current assets
Good Energy Annual Report 2019 Report Annual Good Energy
Equity investment in associate Equity investment Other investment in associate Investments Right of use assets Intangible assets Deferred taxation Non-current assets Non-current equipment Property, plant and Total non- Current assets Trade and other receivables Amounts due from other group companies Amounts due from other group companies Cash and cash equivalents Deferred taxation Total current assets TOTAL ASSETS Equity and Liabilities and Equity Capital and reserves Share capital Share premium account Employee Benefit Trust shares Retained Earnings Total Equity 100
As at 31 DecemberAs 2019 no: 04000623 registered Company Parent Company Statement of Financial Position of Statement Company Parent Strategic Report Governance Report Financial Statements 103 70 15 81 305 358 122 Total Total (532) (510) equity £000’s 16,390 16,606 16,606 14,744 (1,555) - 81 305 358 3,858 3,862 3,862 1,671 (127) (532) (133) (584) £000’s (1,555) earnings Retained Financial statements ------EBT EBT 142 255 (946) (804) (804) (549) shares £000’s ------67 71 Share Share £000’s 12,652 12,719 12,719 12,790 account premium premium ------3 3 826 829 829 832 Share Share £000’s capital 32 32 32 30 32 24 30 Note Profit for the year and total and total Profit for the year comprehensive income Loss for the year and total comprehensive income At 1 January 2018 January 1 At Share based payments 2019 January 1 At Share based payments Exercise of options Dividend paid Exercise of options Issue of ordinary shares 2018 December 31 At Dividend paid 2019 December 31 At Parent Company Statement of Changes Equity in of Statement Company Parent ended 31 December 2019 the year For The notes on pages 106 to 168 form part of these financial statements. these part of 168 form on pages 106 to The notes - - 9 81 70 129 254 254 358 901 901 (65) Total Total (510) (300) (532) (160) equity £000’s 18,780 18,826 18,826 18,085 - - - 81 254 254 358 901 901 (65) 5,707 6,088 6,088 5,553 (584) (635) (132) (532) (366) (127) £000’s earnings Retained ------261 261 136 136 (549) (810) (810) (946) £000’s EBT shares EBT ------71 71 67 67 Share Share £000’s 12,790 12,719 12,719 12,652 account premium premium ------3 3 3 3 832 829 829 826 Called £000’s capital up share up share 30 32 32 30 24 32 25 32 Note
Good Energy Annual Report 2019 Report Annual Good Energy
At 1 January 2019 January 1 At At 1 January 2018 January 1 At Total contributions by and distributions to owners of the parent, recognised directly in equity 2019 December 31 At financial statements. these part of 168 form on pages 106 to The notes Dividend paid Exercise of options Total contributions by and distributions to Total contributions by and distributions owners of the parent, recognised directly in equity 2018 December 31 At Profit for the year Other comprehensive income for the year Other comprehensive income for the Total comprehensive income for the year Share based payments Dividend paid Issue of ordinary shares Exercise of options Tax charge relating to share option scheme 102
For the year ended 31 December 2019 the year For Consolidated Statement of Changes in Equity of Statement Consolidated Profit for the year income for the year Other comprehensive Total comprehensive income for the year Total comprehensive Share based payments Strategic Report Governance Report Financial Statements 105 ------70 (6) (6) 568 309 (32) 2018 4,557 (462) (259) (355) (447) £000’s 10,386 (3,641) (1,137) (4,810) (4,635) - - - - 2 Financial statements 309 123 2019 5,423 4,546 5,000 5,603 5,294 2,983 3,560 (789) (510) (277) (600) (411) £000’s (2,025) (2,812) (3,625) 5 31 30 19 19 Note
Cash flows from operating activities operating from flows Cash Cash used in operations Finance cost Finance income Corporation tax Net cash flows used in operating activities Disposal of assets activities investing activities financing from flows Cash Payment of dividends Cash dividend received Purchase of intangible fixed assets Equity investment in associate Other investment in associate from/(in) generated/(used) flows cash Net Repayment of borrowings Cash flows from investing activities investing from flows Cash Purchase of property, plant and equipment Cash and cash equivalents at end of year Cash and cash equivalents at beginning of year Repayments of intercompany loans Net increase/(decrease) in cash and cash equivalents Proceeds from intercompany loans Capital repayments of leases liabilities Proceeds from the exercise of share options Net cash generated from financing activities Parent Company Statement of CashFlows of Statement Company Parent ended 31 December 2019 the year For The notes on pages 106 to 168 form part of these financial statements. these part of 168 form on pages 106 to The notes - - - - - 16 66 70 2018 1,942 (326) (946) (462) (447) £000’s 18,069 13,720 13,995 15,662 (4,156) (1,287) (8,655) (2,559) (9,494) - - - 59 123 2019 8,146 4,115 5,037 1,357 (112) (857) (277) (600) (510) (769) £000’s 15,662 13,667 (4,090) (1,834) (6,311) (7,467) (1,995) 5 31 17 19 19 30 Note
Good Energy Annual Report 2019 Report Annual Good Energy
Cash generated from operations Cash generated from Cash flows from operating activities operating from flows Cash Finance cost Finance income Income tax received Purchase of property, plant and equipment Net cash flows generated from operating activities operating from generated flows cash Net activities investing from flows Cash Purchase of intangible fixed assets Disposal of assets Deposits into restricted accounts Equity investment in associate Other investment in associate from/(in) generated/(used) flows cash Net activities investing Payments of dividends Cash flows from financing activities from Cashflows Proceeds from borrowings Repayment of borrowings Capital repayments of leases Proceeds from issue of shares Proceeds from sale of share options activities financing in used flows cash Net Cash and cash equivalents at beginning of year year of end at equivalents cash and Cash Net (decrease)/increase in cash and cash equivalents 104
For the year ended 31 December 2019 the year For Consolidated Statement of Cash Flows of Statement Consolidated financial statements. these part of 168 form on pages 106 to The notes Strategic Report Governance Report Financial Statements 107 Financial statements the investee (i.e. existing rights that give it the current ability to direct the relevant activities of of activities the relevant direct ability to current it the that give rights (i.e. existing the investee over Power the investee). the investee. with its involvement from returns variable to or rights, Exposure, its returns. affect to the investee over its power use The ability to the investee. of holders vote with the other arrangement The contractual arrangements. contractual other arising from Rights rights. voting and potential rights voting The Group’s Notes to the Financial the Statements to Notes (continued) Policies Accounting Significant 2. Summary of consolidation 2.2 Basis of and as its subsidiaries the Group of financial the statements comprise financial statements The consolidated from returns variable to rights, or has exposed, is when the Group achieved is at 31 December 2019. Control the investee. over its power through returns those affect and the ability has to with the investee its involvement has: if, and Group only if, the an investee controls Specifically, the Group • • • support presumption, this To in control. result rights voting that a majority of a presumption is there Generally, considers the Group an investee, of or similar rights the voting than less a majority has of and when the Group including: an investee, over power it has whether in assessing and circumstances facts all relevant • • • are that there indicate and circumstances if facts an investee it controls or not whether reassesses The Group a subsidiary begins when the Group Consolidation of control. of elements the three of one or more changes to the subsidiary. of control loses when the Group the subsidiary and ceases over control obtains in included are during the year or disposed of a subsidiary acquired of liabilities, and income expenses Assets, ceases the Group the date until control gains the Group the date from financial statements the consolidated the subsidiary. control to the equity holders to attributed (OCI) income are comprehensive other of and component or loss each Profit in the non-controlling results if this even interests, the non-controlling and to Group the of the Parent of of the financial statements made to are balance. necessary, When adjustments having a deficit interests policies. accounting line Group’s with the policies into bring their accounting to subsidiaries between transactions to relating flows and cash and liabilities, equity, assets expenses income, All intra-group on consolidation. in full eliminated are the Group of members an as for accounted is control, of a subsidiary, a loss without of interest A change in the ownership equity transaction. (including goodwill), assets liabilities, the related a subsidiary, it derecognises over control loses If the Group in profit recognised is gain or loss resultant equity while any of components and other interest non-controlling value. at fair recognised is retained investment Any or loss. 2.3 Going concern as uncertainty, with material basis, on the going concern been prepared have The financial statements continue will be able to that the Group expectation a reasonable is that there assessed have the Directors with the period. the going concern However, due over fall they as its commitments and meet in operation periods and conditions economic lockdown over uncertainty is 19 in the UK, there COVID of outbreak current as pay debts to customers the ability for and decreases consumption in electricity decreases cause which becomes if this its bondholders repay fully may be unable to means the Group uncertainty due. This fall they covenant. its counterparty breaches due on June 2021 and may mean the Group and a number put in place of has on its business COVID-19 of the impact monitoring actively is The Group ensure to stakeholders of with a variety been has working The Group the impact. minimise to mitigations technology customer our new of The implementation respond. to placed well is business our UK focused all services and deliver operate to flexibility with future us planned provides as which progressing is platform All core remotely. working under 300 people successfully just of our full business have now We customers. to make needing to are although we expected as functioning are care including customer functions business to face third-party those given etc, reading on meter self-serve substantial encouraging as such adjustments, curtailed. being substantially are operations face
Good Energy Annual Report 2019 Report Annual Good Energy
106 2.1 Basis of preparation of financial statements of preparation 2.1 Basis of Financial Reporting with International in accordance been prepared have financial statements These (IFRIC) and Committee with Union and IFRS Interpretations the European by (IFRS) adopted as Standards under IFRS. companies reporting 2006 applicable to the Companies partsthose of Act cost and basis under concern on a going the historical been prepared have The financial statements value and financial liabilities financial assets held at fair of revaluation modified by cost or historic convention or loss. profit through and assumptions estimates of the use with IFRS requires in conformity financial statements of The preparation and the the financial statements of and liabilities at the date assets of amounts the reported that affect during the financial year. and expenses revenues of amounts reported or actions, event the amount, of knowledge reasonable on management’s based are estimates Although these and estimates judgements, accounting The critical estimates. those from may differ ultimately results actual assets of the carrying amounts to adjustment a material causing of risk a significant that have assumptions policy accounting 4, and in the following in note discussed are financial year and liabilities within the next (2.11) and (2.7), inventories (2.6), leases and equipment plant (2.5), property, recognition revenue notes: (3.1.3). risk credit 2. Summary of Significant Accounting Policies Accounting 2. Summary Significant of
1. General Information 1. General Stock the London of Market Investment on the Alternative listed is Company") ("the PLC Group Good Energy are shares Kingdom. The Group's and domiciled in the United in England and Wales incorporated is Exchange, SN15 Hill, Chippenham, Wiltshire, Monkton Reach, at Monkton located is office The registered publicly traded. Kingdom. 1EE, United party of controlling no ultimate is There PLC. Group Good is Energy Group the of parent The ultimate the Group. the to company a holding and management of those are PLC Group Good Energy of The principal activities sites. development generation and seller of, and a lender to, Group from electricity and of sale generation the purchase, include its subsidiaries of The principal activities generation. micro-renewable to and gas services relating of sale the as well as sources, renewable the of members to information provide to is and Financial Statements Report the Annual The purpose of relating looking statements forward certain It contains "the Group"). and (together its subsidiaries Company involve statements these their nature, By the Group. and financial condition of performance the operations, to in the Annual Nothing anticipated. those from can differ and circumstances events future since uncertainty forecast. a profit as be should construed and Financial Statements Report and currency the functional is which in pounds sterling, presented are financial statements These the Group in which the primary environment of the currency is this as the Group, of currency presentational indicated. otherwise where (£000), except thousand the nearest to rounded are All values operates. set are financial statements consolidated these of policies applied in the preparation The principal accounting stated. unless otherwise presented, all the years applied to been consistently policies have These out below. Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 109 Financial statements Notes to the Financial the Statements to Notes (continued) Policies Accounting Significant 2. Summary of 2.4 Change policies in accounting and disclosures of a result the changes as of and effect time. The nature the first for applied IFRS Leases 16 The Group described below. are standards accounting new these of adoption have to considered not are time in 2019, but the first apply for and interpretations amendments other Several earlyadopted not has The Group the Group. of financial statements on the consolidated impact a material effective. yet not but are been issued that have or amendments interpretations standards, any IFRS 16 Leases an whether IFRIC 4 Determining Interpretations: along with three 17 Leases, IAS supersedes IFRS 16 Leases of the Substance and SIC 27 Evaluating – Incentives, Leases 15 Operating SIC a Lease, contains Arrangement a Lease. of Form the Legal Involving Transactions leases. of and disclosure presentation measurement, the recognition, for out the principles sets The standard and related a asset a right-of-use recognise to the Group requires standard this of the adoption lessee, a As The a lessor. as activities no leasing has The Group Financial Position. of liabilitylease on the Statement the been applied by have which expedients, and practical requirements specific transition provides standard below. detailed as Group application initial of of the date with approach, IFRS modified the 16 using retrospective adopted The Group of effect cumulative with any applied is retrospectively, the standard 1 January approach, 2019. Under this retained the opening balance of to within equity an as adjustment IFRS 16 being recognised initially adopting period. the current earnings for in assets earnings, the right-of-use as on opening retained no impact was there however, the Group For liabilities, the lease equal to at an amount recognised under IFRS leases 16 were recognised newly of respect January at 1 as book values the net leases, existing For payments. lease or prepaid accrued any for adjusted IFRS 16. to on transition assets right-of-use to and equipment plant property, from reclassed 2019 were within the standard. provisions under the specific transition permitted as been restated not have Comparatives with the all leases, for approach and measurement applied recognition a single the Group Upon adoption, the from than less 12 months of term lease having a remaining or as low-value, as identified those of exception leases. all subsequent of be applied in respect to will continue initial application. approach This of date 1 January 2019. beginning from leases for policy the accounting for 2.7.2 note to refer Please whether reassess not to available expedient practical the transition use to elected the Group Additionally, to applied has the standard the Group 1 January at as a lease 2019. Therefore, or contains, is, a contract 17 and at 1 January IFRIC 4 as under 2019. IAS leases as identified previously that were contracts
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108
2. Summary of Significant Accounting Policies (continued) Policies Accounting Significant 2. Summary of 2.3 Going concern (continued) without can operate period. Sites during the lockdown been has unaffected sites generation of The operation they as maintenance required any for site attend been able to have and contractors human intervention, the service. forecast While utilities difficult it is being to an essential due to restrictions travel from exempt are affected. being without materially continue operations day-to-day 19, the Group’s COVID of impact and with domestic gas electricity domestic in demand for a 10-15% increase shown Early have indications reduction a seen have We flow. cash supply Good 55% of Energy’s approximately for accounting customers for account customers Business customers. our business demand from 25% in electricity approximately of in direct no deterioration seen currently have We flow. supply cash Good Energy’s of 45% approximately the as However, the COVID-19. of the start since customers from bill receipts cash of debit or pay on receipt on business an impact expecting are we commences and an downturn economic period continues, lockdown usage. energy pay for ability to customers’ and domestic on our have could that COVID-19 impacts the potential time assessing considerable spent has The Group to the Group being by put in place measures the current account in to taken has assessment This operations. the from resulting in revenues reductions and potential expenditure, discretionary and reduce cash preserve downturn. economic and an expected lockdown to due customers and business on domestic impact economic in place. or additional loan facilities no overdraft are that there assumes It also the counterparties, number with a of relationships trading operated and well standing long has The Group paid as up shareholder (defined Worth Net Tangible that the Group’s an agreement contain which majority of period a 12 month than 25% over more by decrease earnings) not should retained plus contributions cash audited annually on publication of tested are covenants Worth Net Tangible level. a certain below to or fall request to decide, so if they counterparties, allows financial this covenant of Breach financial statements. or other credit of letter guarantee, company a parent of additional financial support may be (which form in the additional financial security if appropriate the contract may terminate financial security). The counterparty upon based current with counterparties at risk timely manner. within a The value if requested, provided, not is £2m. approximately at estimated is prices market and current commodity contracts service cover beinga debt covenants two contains £33.8m, to with GCP, amounting borrowings The group’s Compliance assets. with these with the generation specifically associated ratio cover and a loan life ratio materially not are concluded has the Board which and prices volumes, on generation based is covenants COVID-19. by affected during a lockdown usage energy the reduced Case assumes which a Downside considered has The Board no make customers business and 25% of customers domestic that 10% of assumes months, four period of within a twelve-month collected subsequently not are debts these during period, this that 30% of payments Case their bonds in June indicates 2021. The Downside redeem to elect bondholders period and that 50% of months twelve for operate and able to test covenant with the counterparty compliant is that the Company and Accounts. Report the Annual of approval of the date from under a plausible been has sensitised this rates, period and collection the lockdown over the uncertainty Given customers domestic that 30% of months, six to period extends that the lockdown such test stress cash reverse not are debts these during period, this that 50% of no payments make customers business and 40% of scenario, their bonds. the Under this redeem to elect bondholders and that 100% of collected subsequently and the bond in full in June balance 2021, with nil cash remaining, repay to cash sufficient have would Group covenant. with its counterparty be compliant would or longer than months, six a period of over periods period in the going concern are plausible that lockdown It is in addition the case were these If either of than above. the scenarios worse is collection on cash the impacts have and/or would covenant its counterparty breach would Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 111 - (3) 126 (96) 3,695 7,880 8,006 8,874 5,810 (895) £000’s (5,891) Financial statements For those leases not identified as low value or short-term, the Group recognised right-of-use assets and assets right-of-use recognised the Group or short-term, value low as identified not leases those For liability, the lease adjusted equal to at an amount recognised were assets liabilities.lease right-of-use The application. initial of at the date that existed payments lease or accrued prepaid any for similar characteristics. with reasonably leases of a portfolio to rate discount a single of Use of the date before immediately onerous are leases whether of assessment upon its historical Reliance of 36 Impairment under IAS review an impairment perform initial application, eliminating the need to recognised. assets right-of-use on the Assets, the of ending within 12 months term with a lease leases to exemptions lease the short-term of Application initial application. of date of at the date assets the right-of-use of the measurement from costs initial direct of Exclusion initial application. the lease. or terminate extend to options when considering term, the lease in determining hindsight of Use Minimum lease payments on finance lease liabilities (notional amount) as at 31 as amount) liabilities on finance lease (notional payments Minimum lease December 2018 lease liabilitiesGross as at 1 January 2019 and terms payments in lease changes of Effect discounting of Effects Net lease liabilities January as at 1 2019 Net Operating lease commitments as at 31 December lease 2018 commitments Operating leases short-term to relating Commitments assets low-value of leases to relating Commitments IFRS 16 to on transition and RPI increases terms, lease of Reassessments Lease commitments in respect of generation site sold during sold the year site generation of in respect commitments Lease Notes to the Financial the Statements to Notes (continued) Policies Accounting Significant 2. Summary of 2.4 Change (continued) policies in accounting and disclosures • unpaid remain which payments the lease of value present on the based recognised liabilitiesThe lease were at that same date. rate borrowing the incremental using initial application, discounted of at the date permitted as expedients practical the following use to elected time, the Group the first In applying IFRS 16 for the standard: by • • • • • liabilities lease applied to rate borrowing incremental average IFRS 16, the weighted to On transition 4.75% between from used rates borrowing incremental of a range of a result 6.51%, as was recognised and 7.15%. at 31 as commitments lease the operating to liabilitiesThe lease at 1 January as 2019 can be reconciled December follows: as 2018 The operating lease commitments at 31 December 2018 did not include the effect of minimum increases in minimum increases of the effect include at 31 December 2018 did not commitments lease The operating the reflect to standard the new of in the adoption been corrected have payments The lease payments. lease
Good Energy Annual Report 2019 Report Annual Good Energy lease assets recognised previously under finance leases with a net book value of £241,000 reclassified £241,000 reclassified of book value under net with a finance leases previously recognised assets lease and equipment; plant property, from £511,000 reclassified of book value under net with a finance leases previously recognised assets lease and assets, intangible property, from £1,200,000, also of book value a net with assets the right-of-use to related provisions decommissioning and equipment. plant property, from reclassified
Right-of-use assets with a net book value of £7,636,000 were recognised and presented separately in the in the separately and presented recognised were £7,636,000 of book value with a net assets Right-of-use comprises: This Financial Position. of Statement £5,684,000. IFRS of 16 to transition on assets right-of-use recognised Newly within borrowings. recognised £5,684,000 were liabilities lease of Additional recognised additional assets of the depreciation/amortisation due to increased expense The depreciation This and equipment). plant in property, the decrease of net assets, in right-of-use (being the increase £202,000 and £388,000 respectively. of expenses and sales administrative of in cost in increases resulted decreased leases operating previous to relating expenses within administration included expense The rent £729,000. by liabilities on additional lease expense the interest to £370,000, relating by increased Finance costs recognised. of in respect payments lease to £359,000 relating by decreased activities operating from Cash outflows a as the same amount by increased financing activities from Cash leases. outflows operating previous under recognised leases new these to related payments lease of the principal element to relating result, IFRS at 1 January 16 as 2019. than less 12 of term lease (i.e. having a remaining short-term or as value, low as identified leases For exemption apply the recognition to elected has initial application), the Group of the date from months will be expense the lease Instead, assets. right-of-use recognise not to expedient and practical of in the Statement and recognised term lease the remaining over basis on a straight-line for accounted Income. Comprehensive (a) (b) (c) 110 • • 2. Summary of Significant Accounting Policies (continued) (continued) Policies Accounting Significant 2. Summary of 2.4 Change (continued) policies in accounting and disclosures IFRS at 1 January 16 as follows: as of 2019 is adoption of The effect • • • to IFRS 16 amounted of the implementation prior to existing finance leases of liabilities in respect Lease at 1 January£126,000 as 2019. 31 December ended 2019: the year For • • • located, are assets land its generation on which of, and use to, the access for contracts lease has The Group IT and machines) other and water and coffee laptops (including printers, equipment buildings, other office either a as a lessee) (as leases these of each classified IFRS 16, the Group of the adoption Prior to equipment. lease. or anfinance operating lease 1 January 2019. prior to leases for policy the accounting 2.7.1 for note to refer Please the of change the initial carrying value did not the Group finance leases, as classified previously leases For initial application. of at the date recognised and liabilities previously assets and liabilities lease at 1 January as 2019 equal the assets the right-of-use of the carrying values Consequently, IFRS 16 were of 17. The requirements under IAS recognised as date, this before immediately carrying values 1 January 2019. from leases these applied to therefore the Group: been applied by have the following leases, operating as for accounted previously leases For Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 113 Financial statements Notes to the Financial the Statements to Notes (continued) Policies Accounting Significant 2. Summary of (continued) recognition 2.5 Revenue revenue (FiT) 2.5.2 Feed-in-Tariff in April (introduced OFGEM. The FiT scheme from revenue FiT subsidy receive sites the generation Some of FiT technologies. generation renewable of the uptake promote designed to scheme a government 2010) is in and exported generated has asset the generating that the electricity for quarterly received are payments renewable generate obligation (to performance single a supplied. is This readings the period, on meter based The performance generated. electricity out per unit of set explicitly is price and the transaction electricity) OFGEM from received is Payment generated. is when the power immediately obligation satisfied is or warranties returns No refunds, generation. the period of the end of after 45 days approximately applicable. are services administration (FiT) 2.5.3 Feed-in-Tariff the FiT scheme. signed up to who are micro-generators services to FiT administration provides The Group be the deemed to is which the scheme, administering OFGEM for earned is from FiT services,For revenue OFGEM for paid by an is initial fee parts: there in two recognised is FiT services, For price. revenue transaction FiT services. of provision annually for received that is and then an ongoing amount on a generator, taking following the until signs up with Good Energy when the customer the period from over spread is The initial fee spread is received that is and the ongoing fee customer, a new for ends April, when the FiT compliance year applicable. are or warranties returns compliance period. No refunds, the 12 month over recognition Obligation Certificates (ROCs) revenue 2.5.4 Renewable on receipt sold ROCs These are power. of OFGEM on generation based from the Group to awarded ROCs are rather revenue be subsidy deemed to is title. ROC revenue of transfer OFGEM allowing from certificates of with customers. contracts from than revenue the pricing where agreement with a contractual in accordance is on sale recognised revenue of The amount of element the re-cycle of estimate on OFGEM’s (the buy-out) and based is minimum ROC prudent a value non-compliance with complied or paid the penalty for have suppliers a ROC all once energy of the final value recognised is and profit ROC revenue to A final adjustment obligation (the recycle). the renewables the of in advance for accounted announced the final out-turn OFGEM ROConce have not is but this price, a is receivable The amount measurable. not is price the transaction the final out-turn as price of receipt asset. contingent are the certificates ensures this as generated is when the power obligation satisfied is The performance made 5 days is and payment invoice, to generation delay from a three-month is OFGEM. There by generated applicable. are or warranties returns No refunds, the invoice. of receipt after revenue generation 2.5.5 Power Limited Good Energy to sold that is power produced when the wind or solar asset generated is Revenue the transaction per price is MWh, which at an arms fixed length Agreement Purchase a Power through generated. is when the power in time; immediately at a point obligation satisfied is The performance price. or returns No refunds, ends. the power of month the delivery after than one month made no more is Payment applicable. are warranties recognition revenue site development 2.5.6 Generation agreement and on the sale based passed, purchase is that control in the date recognised is Revenue sold. site each to pertaining
Good Energy Annual Report 2019 Report Annual Good Energy
112 2.5.1 Power supply 2.5.1 Power Revenue and Grid data. National flows data on industry based accrued is electricity of the supply for Revenue supplied or gas to electricity in units of the quantity of an estimate includes sales energy from calculated the average of the period, and an the end of estimate preceding 12 months in the class profile by customers charge. per price unit,sales and standing unit consumption. and price estimated transaction with a fixed estimated, is figure revenue the total 15% of and takes rates, consumption estimated industry patterns, consumption historical using made is The estimate final until position a prudent takes upon the Group which processes, reconciliation industry consideration into the supply date. after 14 months the industry from available is data reconciliation are estimates point at which received; are reads meter when customer superseded is Unbilled revenue is per unit and per day. Unbilled revenue stated explicitly is price Transaction usage. actual to adjusted approach. outcome likely the most using estimated Natural shipper, Contract gas the Group’s from received on information based accrued is revenue gas, For adjusted used gas of annual quantities held, their estimated all the sites of details includes which Gas Limited, based and invoiced adjusted subsequently is information This factor. correction weather a pre-determined by per unit and per day. stated explicitly is price Transaction reads. meter and industry on customer price The transaction the customer. to delivered is or gas the electricity time as over recognised is Revenue price the transaction a portion which of obligations to performance no separate are there clearlyis stated, who customers 100% of to given are Discounts consideration. no variable is and there be allocated, to needs over revenue against offsetting these, for account to built is up monthly and a provision criteria, certain meet with Customers. Contracts from in line is with IFRS which 15 Revenue incurred, is the discount time as bill in arrears. of debit or paid on receipt a direct either as collected is and supply, payment gas electricity For returns necessary. No refunds, made as and provision impairment for regularly reviewed are amounts Overdue applicable. are or warranties the customer. the customer. from revenue to relating and assumptions estimates judgements, accounting significant of The disclosures 4.1.1 and 4.2.1. in notes provided are with customers contracts has the Group which for customer a goods or services to liability transfer the obligation is to A contract the customer. due) from is consideration of (or an amount consideration received a contract the customer, goods or services to transfers the Group before consideration pays If a customer earlier). is Contract due (whichever is made or when the payment is when the payment liability recognised is recognises The Group under the contract. performs when the Group revenue as recognised liabilities are position. in a credit are liabilities when customers contract 2.5 Revenue recognition recognition 2.5 Revenue of sale the power, of and the generation gas, electricity supplies of providing of business in the is The Group contracts from services. Revenue (FiT) administration Feed-in-Tariff as well as sites, development generation at an the customer to the goods or services transferred is of when control recognised is with customers goods those for in exchange be entitled to expects the Group which to the consideration that reflects amount for except arrangements, the principal in its revenue that it is concluded generally has or services. The Group to transferring the goods services or before it typically because services controls below, the FiT administration 2.4 Change in accounting policies and disclosures (continued) 2.4 Change (continued) in accounting policies and disclosures Group’s the of terms the lease in the year Additionally, minimum uplift payments. in annual lease contractual been therefore have terms leases these our offices, relocate plans the to for reassessed were offices two commitments. lease operating of calculation in the prior year used those from updated 16. per note can be found leases of in respect The disclosures 2. Summary of Significant Accounting Policies (continued) (continued) Policies Accounting Significant 2. Summary of Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 115 Financial statements Right-of-use assets Right-of-use liabilities Lease the initial measurement of the lease liability, the lease of the initial measurement the Group, by incurred costs initial direct any and the lease, at the end of the asset or remove dismantle to required costs any of an estimate received. incentives any of net date, commencement the lease of made in advance payments lease any receivable, incentives any less payments) fixed (including in-substance payments fixed and or rate, that depend on an index payments lease variable guarantees. value be paid under residual to expected amounts Notes to the Financial the Statements to Notes (continued) Policies Accounting Significant 2. Summary of as a lessee) (continued) Group (the 2.7 Leases those of with the exception all leases, for approach and measurement applies recognition a single The Group lease make liabilities lease to recognises Group The assets. low-value comprise or which short-term, are which the underlying assets. use to the right representing assets and right-of-use payments (a) the use), for made available is the underlying on which asset (i.e. the date date commencement the lease At measured are assets Right-of-use Financial Position. of on the Statement asset a right-of-use recognises Group of remeasurement any for and adjusted losses, and impairment depreciation accumulated any less at cost, liabilities.lease comprises: asset the right-of-use of The cost • • • • the earlier to date commencement the lease from basis on a straight-line depreciated are assets Right-of-use If ownership term. the lease and the end of assets the right-of-use of life useful the estimated the end of of a of the exercise reflects or the cost term, the lease at the end of the Group to transfers asset the leased of the asset. of life useful the estimated using calculated is depreciation option, purchase and plant its property, with that of in a manner consistent assets its right-of-use classifies The Group 2.6 for note see - please bases life useful the same estimated the application includes of which equipment, details. note to refer Please exist. indicators when such impairment, for assets the right-of-use assesses also The Group impairment. of in respect policy the accounting 2.6.1 for (b) value at the present liabilities lease measured recognises the Group the lease, of date the commencement At the of in the measurement included payments Lease term. the lease be made over to payments the lease of liabilitylease include: • • • be to certain reasonably that is option a purchase of price the exercise include also payments The lease reflects term if the lease the lease of termination penalties for of along with payments the Group, by exercised or rate depend on an index that do not payments lease Variable terminate. to the option exercising the Group occurs. the payment condition that triggers of in the period the event in which expenses as recognised are at the rate borrowing its incremental uses the Group payments, lease of value In the present calculating initial to Subsequent determinable. readily not is implicit in the lease if the rate date commencement lease to and reduced interest of the accretion reflect to liabilities lease increased is of the amount measurement, made. payments lease reflect a a modification, is term, a change in the lease if there liabilities lease remeasured is of The carrying amount or rate a change in an index from resulting payments future (e.g. changes to payments change in the lease the purchase to an option of or a change in the assessment payments) the lease determine to used underlying asset. between 3 and 5 years between the lease of the life over 20 and 29 years between depreciated not
Good Energy Annual Report 2019 Report Annual Good Energy Leasehold improvements improvements Leasehold assets Generation under construction Assets fittings and equipment Fixtures,
114 2.7.2 Leases with effect from 1 January from 2019 effect with 2.7.2 Leases at the an assessment performs 1 January 2019, the Group on or after into entered contracts new any For “a as defined is A lease a lease. or contains, is, the contract whether determine to a contract of inception a period of for asset an identified of the use control to the right conveys that a contract, or part of contract, consideration”. for time in exchange 2.7 Leases (the Group as a lessee) (the Group 2.7 Leases 1 January 2019 prior to 2.7.1 Leases are (finance leases) ownership to approximating rights that give agreements leasing financed by Assets and life the useful of the lower over provided or amortisation is and depreciation value at their fair capitalised liabilities as included in obligations under are finance leases future of elements The capital the lease. of term financial to having been allocated element, interest year’s and the current Financial Position of the Statement of the Statement to liability,charged is on the outstanding charge of periodic rate a constant give periods to Income. Comprehensive with remain ownership of and risks the benefits all of substantially where leases operating applicable to Rentals of the term over basis Income on a straight-line Comprehensive of the Statement to charged are the lessor the lease. 2.6.1 Impairment of property, plant and equipment (including right-of-use assets) property, plant and2.6.1 Impairment (including of right-of-use equipment on an and annual basis revised reviewed are values and their residual assets of lives economic The useful appropriate. considered where or changes in if events impairment for reviewed is and equipment plant property, date, reporting each At is in carryingvalue impairment Any be recoverable. may not that the carrying amount indicate circumstances with the function consistent categories expense Income in those Comprehensive of the Statement to charged in the period it occurs. in which and recognised is asset, the impaired of Comprehensive of Statement in the Consolidated included is and equipment plant property, of Depreciation the asset. of with the function consistent categories expense Income in those the on which upon (i.e. at the date disposal derecognised is and equipment plant property, of item An gain or disposal. Any its use from expected are benefits economic or when no future control), obtains recipient and the net the asset of carrying the amount between (being the difference arising on derecognition or loss upon or loss, derecognition. in profit included is disposal proceeds)
2. Summary of Significant Accounting Policies (continued) (continued) Policies Accounting Significant 2. Summary of and equipment plant 2.6 Property, and accumulated depreciation accumulated of net at cost, stated is and equipment plant Property, bringing to attributable costs and any the asset of price purchase the original includes Cost losses. impairment use. its intended condition for its working to the asset The satisfied. are criteria if the recognition incurred, is when that cost an asset part of recognises The Group to charged are costs and maintenance repaid All other part derecognised. is the replaced of carrying amount incurred. are in the period loss or they which in profit estimated any less the asset, of life useful the estimated over basis on a straight-line calculated is Depreciation bases: on the following value, residual Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 117
Financial statements Representation on the Board of Directors or equivalent governing body of the investee. body of governing equivalent or Directors of on the Board Representation making processes. in policy Participation managerial personnel. of The interchange Notes to the Financial the Statements to Notes (continued) Policies Accounting Significant 2. Summary of and amortisation (continued) assets 2.8 Goodwill, intangible assets intangible 2.8.4 Impairment of made if necessary. is Assets and provision impairment for assets intangible review regularly The Directors Assets impairment. annually for tested are amortisation, therefore to subject not are lives useful with indefinite in circumstance or changes events whenever impairment for reviewed amortisation are to subject that are be recoverable. may not the carrying that amount indicate its recoverable exceeds carrying amount the asset's which by the amount for recognised is loss impairment An For use. in sell, andvalue to costs less value fair an asset's the higher of is amount The recoverable amount. separately are there which for levels lowest at the grouped are assets impairment, assessing the purposes of an than goodwill that suffered other units). Non-financial assets (cash-generating flows cash identifiable period. Any reporting each of at the end the impairment of possible reversal for reviewed are impairment Income within administrative Comprehensive of the Statement to charged is in carrying value impairment in the period it occurs. in which and recognised is expenses in associates 2.9 Investments "the as defined is influence Significant influence. significant has the Group which over an is entity associate An or joint control not but is the investee, of decisions policy in the financial and participate operating to power policies". those of control determine necessary to those similar to are influence significant made in determining The considerations power the voting of 20% or more that a holding of a presumption is there Generally, subsidiaries. over control influence. in significant results the investee of all considers than less holding a 20% has - the Group and - when the Group support presumption this To including: influence, significant it has whether in assessing and circumstances facts relevant • • • and circumstances if facts an investee over influence significant is there or not whether reassesses The Group the above. to changes one or more are that there indicate the method, Under this the equity using method. for accounted are in associates investments The Group's of in the carrying value movements Subsequent at cost. initially is recognised in the associate investment the since or loss profit the associate's of share the Group's realising by for accounted are the investment assets. net in the associate's movements value fair any as well as date, acquisition of Statement in the Consolidated recognised are activities operating associate's the from Gains or losses part as presented is the associate in OCI changes of Any profit. operating Income, of outside Comprehensive OCI. the Group's of separately and not is the investment, of in the carrying included is value the associate to Goodwill relating impairment. for tested is the investment of carrying amount the entire Rather, impairment. for tested in associates investments 2.9.1 Impairment of objective to giving rise a triggering event is if, and loss only if, there an impairment recognises The Group estimated on the future an has impact and that the triggering event impaired, is that the associate evidence the Group exists, evidence such Where estimated. that can be reliably investment the net from flows cash the of amount the recoverable between the difference as the impairment of the amount calculates sell) and its carrying value. to costs less value and its in use fair its value (being the higher of investment of Statement line in the Consolidated Associate" of Profit of within the "Share recognised is impairment Any Income. Comprehensive between 3 and 10 years between 2 and 5 years between amortised not
Good Energy Annual Report 2019 Report Annual Good Energy Software licenses licenses Software costs development Website development of under the course Assets the value of consideration transferred (generally at fair value), at fair (generally transferred consideration of the value and interest, non-controlling any of the amount the acquirer's of value fair date the acquisition in stages, achieved combination the in a business and in the acquiree, held equity interest previously Short-term leases and leases of low value assets value low of and leases leases Short-term
the aggregate of: of: the aggregate and the liabilities assumed. acquired assets the identifiable of amounts the acquisition-date of the net (i) (ii) (iii) 116
2.8.3 Amortisation Comprehensive of Statement the Consolidated to charged is assets intangible life on definite Amortisation the of life useful the estimated over basis on a straight-line expenses) within administrative Income (included follows: as are lives with definite assets intangible for lives useful The estimated asset. intangible control), obtains the recipient on which upon (i.e. at the date disposal derecognised is asset intangible An arising on gain or loss or disposal. Any its use from expected are benefits economic or when no future disposal proceeds) and the net the asset of the carrying amount between (being the difference derecognition upon or loss, derecognition. in profit included is assets intangible life 2.8.2 Indefinite supply licence is supply licence. The power goodwill comprise and the power assets intangible life Indefinite and carried is at Assets, 38 Intangible IAS of the criteria to according asset intangible life anheld as indefinite directly as parties well as third from price purchase comprises Cost losses. impairment accumulated less cost relevant. where costs, development generated internally attributable • • assets intangible life 2.8.1 Definite the meet which costs, development and licences website software comprise assets intangible life Definite amortisation and impairment accumulated less carried at cost and are Assets, 38 Intangible IAS of criteria generated internally attributable directly as parties well as third from price purchase comprises Cost losses. relevant. where costs, development 2.8 Goodwill, intangible assets and amortisation and amortisation assets 2.8 Goodwill, intangible between: the difference as Goodwill measured is 2. Summary of Significant Accounting Policies (continued) (continued) Policies Accounting Significant 2. Summary of as a lessee) (continued) Group (the 2.7 Leases refer (please within borrowings included liabilities lease are the Group's Financial Position, of In the Statement 26). note to (c) which (i.e. those leases short-term of in respect exemption apply the recognition to elected has The Group option), a purchase contain and do not date, commencement the lease from 12 months of term a lease have value. be low to considered that are assets of leases applicable to exemption the recognition as well as are these to in relation liability, and lease payments lease asset a right-of-use recognising of Instead the over basis Income, a straight-line on Comprehensive of Statement in the an as expense recognised term. lease Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 119 Financial statements Notes to the Financial the Statements to Notes (continued) Policies Accounting Significant 2. Summary of (continued) 2.12 Financial instruments at amortised2.12.1 Financial (continued) cost assets allowance in a separate recorded are provisions such net, reported are which receivables, trade For of Statement in the Consolidated expenses within administrative being recognised the loss with account carrying the gross be collectable, will not receivable that the trade Income. On confirmation Comprehensive provision. the associated against off written is the asset of value highly short-term, on hand and cash demand on comprise deposits, and other Cash equivalents and cash an insignificant to subject and are cash of amount a known to convertible readily that are liquid investments in value. changes of risk on expenses service and maintenance debt cover to financing providers held by are deposits Restricted the funding which relates. to sites generation trades. electricity short-term cover to exchanges trading held by security are deposits Short-term or loss (FVTPL) and equity instruments profit and through financial liabilities value 2.12.2 Financial at assets fair secured of consisting financial assets comprise or loss profit through value at fair Financial instruments consideration. contingent of and financial liabilities loan consisting stock, convertible of in the Statement value at fair initially recognised and financial liabilities financial assets at FVTPL are Both in directly recognised are remeasurement on subsequent and gains losses value fair Any Financial Position. or loss. profit the contractual of the substance to according classified are Financial liabilities and equity instruments into. entered arrangements after the Group of in the assets interest a residual evidences that contract any is equity instrument An its liabilities. all of deducting 3.3. per note at FVTPL can be found financial instruments to attributable estimation value the fair of Details payables and other 2.12.3 Trade ordinary of in the course been acquired goods or services that have pay for obligations to are payables Trade due within one year is liabilities if payment current as classified are payable Accounts suppliers. from business value initially at fair recognised are payables liabilities. Trade non-current as presented are they If not, or less. held at amortised cost. and subsequently 2.12.4 Borrowings are costs borrowing Where the loan facility. of the term over costs borrowing expenses The Group as capitalised are costs such a qualifying asset, of or production construction the acquisition, to attributable 26. in note included are borrowings the Group’s of Details the specific asset. part of sale 2.13 Disposal held for groups principally be recovered to is when their carrying sale amount held for as classified are Disposal groups stated are sale for held as classified Disposal groups and highly probable. is the sale transaction a sale through or amortised. depreciated not are sell. They to costs less value and carrying fair amount of at the lower
Good Energy Annual Report 2019 Report Annual Good Energy
118 2.12.1 Financial assets atamortised 2.12.1 Financial cost assets and and cash cash receivables and other trade comprise at amortised cost financial assets The Group’s financial non-derivative are assets These Financial Position. of Statement in the Consolidated equivalents payments solely and are market, in an active quoted not that are payments or determinable fixed with assets goods customers and services of to the provision arise principally through They principal and interest. of initially are They asset. monetary contractual types of other incorporate but also receivables), (e.g. trade rate interest the effective using carried at amortised cost subsequently and are value at fair recognised to model intends which held in a business are (ECLs). These losses credit expected for allowances less method, are receivables Trade sale. than through rather flows cash the contractual collect to hold the financial assets customers. unbilled to amounts of inclusive shown ECLs are at amortised cost. measured all financial assets for ECLs for an allowance recognises The Group and all the with the contract due in accordance flows cash the contractual between on the difference based receive. to expects that the Group flows cash ECLs. in calculating applies a simplified approach the Group assets, and contract receivables trade For on based allowance a loss recognises but instead risk, in credit changes track does not the Group Therefore, on its based matrix that is a provision established has The Group date. reporting at each ECLs lifetime and the the debtors specific to factors forward-looking for adjusted experience, loss credit historical environment. economic 2.12 Financial instruments deemed that are activities and investing in its operating financial instruments certain uses The Group and circumstances. its strategy for appropriate and cash cash include: Financial Position of Statement on the Consolidated recognised Financial instruments and financial liabilities and financial assets at fair borrowings, payables, trade receivables, trade equivalents, and loss. profit through value when the Financial Position of Statement on the Consolidated recognised and liabilitiesFinancial are assets the instrument. of provisions the contractual become a party has to Group 2.11.2 Carbon Instruments Offset part supply, as gas of by generated emissions offset to the Group by used are Carbon Instruments Offset and net cost of at the lower inventory as recognised are instruments These offering. gas green the Group's value. realisable 2.11 Inventories 2.11 Inventories Obligation Certificates (ROCs) 2.11.1 Renewable of percentage a set procure to required are suppliers 2000, all electricity Utilities the Act of Under the provisions the purchase obligation This can be fulfilled by generators. electricity renewable accredited their supplies from the OFGEM recycle then who to payments making by or generators, ROCs to originally issued of andsurrender supplies subsidiary a company, Limited, that Good Energy ROCs. Notwithstanding of purchasers to payments obligation to period, its percentage a 12 month over generation renewable from entirely sourced electricity a as supplied is and charged electricity as obligation recognised is OFGEM. The cost by ROCssubmit set is on disposal of or losses gains Income. Any Comprehensive of Statement in the Consolidated sale of cost the to an as adjustment included compliance obligations are the Group’s of in excess ROCs are which and estimated cost purchase of at the lower valued ROCs sales. are of within cost included compliance cost value. realisable 2. Summary of Significant Accounting Policies (continued) (continued) Policies Accounting Significant 2. Summary of in subsidiaries 2.10 Investments less at cost for accounted in subsidiary companies and are these investments holds Company The Parent only. financial statements Company in the Parent impairment Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 121 Financial statements including any market performance conditions (e.g. an entity’s share price); share (e.g. an conditions entity’s performance market including any profitability, (e.g. conditions vesting performance service and non-market any of the impact excluding a specified time period), and over the entity of an employee and remaining targets growth sales save). to employees for (e.g. the requirement conditions non-vesting any of including the impact Notes to the Financial the Statements to Notes (continued) Policies Accounting Significant 2. Summary of payments 2.16 Share-based payment a share-based operates The Group payments. applies share-based IFRS 2 to The Group in the shares purchase to the option employees key grants plan,compensation under the entity which duration. a certain for maintained at a specified price Company receives plan, compensation under the entity which share-based an equity-settled, operates The Group the of value The fair the Group. of (options) equity instruments for consideration as employees services from The total an as expense. recognised is the options of the grant for in exchange services received employee granted: the options of value fair the to reference by determined is be expensed to amount • • • options about the number of in assumptions included and service are conditions performance Non-market period, the period is which over the vesting over recognised is expense The total vest. to expected that are be satisfied. to are conditions the specified vesting allwhich of expected are that options number the of of its estimates revises financial period, each the Group the end of At original to the revision of the impact It recognises conditions. vesting on the non-market based vest to adjustment Income, with a corresponding Comprehensive of Statement in the Consolidated if any, estimates, equity. to that obligation, the proceeds meet to shares new issues and the Group exercised, are When the options and (nominal value) capital share to credited are costs transaction attributable directly any of net received premium. share capital 2.17 Share ordinary new of the issue to attributable directly costs equity. as Incremental classified are shares Ordinary the proceeds. from tax, of net in equity a deduction, as shown are or options shares 2.18 Pensions contributions pays the Group scheme Under this scheme. pension contribution a defined operates The Group basis. voluntary or contractual plans on a mandatory, insurance pension administered publicly or privately to are been paid. contributions The have the contributions obligations once no further payment has The Group represents the year for due. The pension charge are they when expense benefit an as employee recognised the year. of in respect the Group by payable the amounts reporting 2.19 Segmental the chief to provided reporting with the internal in a manner consistent reported are segments Operating Directors. of the Board as been has identified maker decision operating The chief maker. decision operating and allocate performance assess to in order reporting internal the Group’s review Directors of The Board resources. 2.20 Finance income and finance costs Comprehensive of in the Statement and deposits recognised is cash of in respect received Finance is income finance lease debt, on external interest comprise Finance costs method. interest the effective Income using of the Statement to charged are Finance costs loan costs. issue and the amortisation of costs interest initially are costs Issue method. interest the effective using the debt of the term Income over Comprehensive instrument. capital the associated of in the proceeds a reduction as recognised 2.21 Dividend distribution financial a liability as in the Group’s recognised is shareholders Company’s the Parent Dividend to distribution shareholders. Company’s the Parent by approved in the period the dividends are in which statements
Good Energy Annual Report 2019 Report Annual Good Energy
120 2.15 Decommissioning costs dismantle an has obligation to when the Group recognised are costs decommissioning Liabilities for Liabilities may arise upon located. the land it is on which and restore assets the generation and remove or regulations. change in legislation a subsequent upon or through acquisition facilities, such of construction with local in accordance determined expenditure of value present the estimated is recognised The amount the provision to and equipment plant property, of item tangible corresponding A andconditions requirements. created. also is the of the cost from or deducted added to is expenditure the estimated of value in the present changes Any its useful over prospectively then depreciated is amount depreciated The adjusted it relates. which to assets in the Consolidated included is provision on the decommissioning the discount of The unwinding life. economic are decommissioning of costs future The estimated a finance Income cost. as Comprehensive of Statement appropriate. as annually and adjusted reviewed 2. Summary of Significant Accounting Policies (continued) (continued) Policies Accounting Significant 2. Summary of taxation and deferred 2.14 Current the period Income for Comprehensive of Statement in the Consolidated included or credit charge The tax the Consolidated to or credited charged is tax and deferred Current tax. and deferred current comprises equity, in to directly or credited charged items to it relates when Income, except Comprehensive of Statement within equity. recognised also is tax or deferred the current case which profit the period. Taxable for profit taxable on the based or receivable payable tax the expected is tax Current income of items it excludes Income as Comprehensive of in the Statement reported as profit net from differs (i.e. differences permanent and it further excludes years, in other or deductible taxable that are or expense or deductible). taxable never that are items or from be recovered to expected at the amount measured and liabilities are assets tax income Current that those are amounts these compute to used laws and tax rates The tax authorities. the taxation paid to and operates the Group where in the countries date at the reporting enacted or substantively enacted are income. taxable generates in which situations to with respect returns in the tax taken positions periodically evaluates Management appropriate. where provisions and establishes interpretation to subject are regulations applicable tax the arise between which differences on temporary or recoverable payable tax the expected is tax Deferred used bases tax and the corresponding and liabilities in the financial assets statements, of carrying amount liabilities are tax the liability using Deferred method. for and provided is profit, taxable of in the computation the to recognised are assets tax and deferred differences, temporary all taxable for recognised generally differences temporary deductible which against will be available profits that taxable probable that it is extent can be utilised. the goodwill or from from arises difference if the temporary recognised not and liabilities are assets Such which and liabilities in a transaction assets other of combination) than in a business (other initial recognition taxable for recognised liabilities are tax Deferred profit. nor the accounting profit neither the tax affects the control able to is the Group where except in subsidiaries arising in investments differences temporary in the reverse will not difference that the temporary and probable it is difference the temporary of reversal future. foreseeable to financial each period and reduced at the end of reviewed is assets tax deferred of The carrying amount the all or part allow of to will be available profits taxable that sufficient no longer probable that it is the extent apply to expected that are laws and tax rates on tax based calculated is tax Deferred be recovered. to asset or the liability settled. is realised is in the period when the asset tax current off set to right a legally is enforceable when there offset and liabilities are assets tax Deferred the same taxation by levied taxes income to relate liabilities and when they tax current against assets basis. liabilities on a net tax and current assets tax its current settle to intends authority. The Group Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 123 ------£000’s £000’s Over 5 years Over 5 years 5 Over
------7 7 Financial statements 34 £000’s £000’s 17,525 17,491 Between Between Between 2 and 5 years 5 and 2 2 and 5 years
- - - - - 79 27 911 832 £000’s £000’s 17,749 17,722 Between Between 1 and 2 years 1 and 2 years 2 and 1
49 29 340 425 248 797 8,289 4,180 3,344 8,453 7,330 £000’s 1 year 1 year 1 £000’s Less than than Less Less than Total Parent 31 December 2018 Trade and other payables Trade and other payables other and Trade Total Corporate bond Borrowings Loans from group companies Borrowings liabilities Lease companies group from Loans Corporate bond Parent 2019 December 31 Prior to the implementation of IFRS 16 Leases (with a date of initial application of 1 January initial application 2019), lease of of (with a date IFRS 16 Leases of implementation the Prior to 26). note (see within borrowings included were finance leases existing to liabilities relating the maturity from separately disclosed liabilities lease are of that the maturity analysis IFRS 16 requires as implementation of approach the modified financial liabilities. retrospective Due to other of analyses within under the specific provisions permitted as been restated not have comparatives the Group, by adopted 2.4. per note IFRS 16 can be of found implementation the around Further details the standard.
Notes to the Financial the Statements to Notes (continued) Management Risk 3. Financial and Capital (continued) 3.1 Financial risk factors (continued) risk 3.1.1 Liquidity - - - - 8,457 £000’s £000’s 41,321 41,321 37,109 45,566 Over 5 years Over 5 years 5 Over
- - - 1,073 £000’s £000’s 14,300 31,791 17,491 14,571 15,644 Between Between Between 2 and 5 years 5 and 2 2 and 5 years
- - 832 626 4,893 5,725 4,694 £000’s £000’s 17,722 23,042 Between Between 1 and 2 years 1 and 2 years 2 and 1
797 753 4,180 5,164 4,891 £000’s 1 year 1 1 year £000’s 37,084 46,428 35,487 41,928 Less than than Less Less than
Good Energy Annual Report 2019 Report Annual Good Energy
Borrowings Consolidated 2019 December 31 Corporate bond liabilities Lease payables other and Trade Total Consolidated 31 December 2018 Corporate bond Borrowings Trade and other payables Total 122 3.1.1 Liquidity risk risk 3.1.1 Liquidity commitments flow cash meet to funds difficultyin raising will encounter that anLiquidity the risk entity is risk in the - it and prepares to available resources cash has The Group with financial instruments. associated forecasts these opinion, In the Directors' year. the forthcoming for - forecasts the Group of entities operating trade. of fund the continuation to resources sufficient will have the Group that indicate meet to cash sufficient it has ensure to basis forecast' on a 'rolling forecasts flow cash monitors The Group at all facilities borrowing committed on its undrawn headroom enough while needs maintaining operational limits or covenants. borrowing breach to not as so times below: provided is flows cash undiscounted contractual on financial instruments based of A maturity analysis 3. Financial and Capital Risk Management Risk 3. Financial and Capital 3.1 Financial risk factors risk, (including currency risk liquidity market risk, financial risks: of a variety it to expose activities The Group’s risk overall The Group’s risk. and risk, commodity and risk) price credit rate interest value and fair flow cash potential minimise to and seeks financial markets of the unpredictability on focuses programme management financial performance. on the Group’s effects adverse Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 125 - 2018 68.5% £000’s 60,727 40,899 18,826 59,725 (4,166) (15,662) Financial statements 2019 (474) 68.6% £000’s 59,801 41,112 18,780 59,892 (4,548) (13,667) 26 22 Note in the principal market for the asset or liability; or the asset for in the principal market or liability, the asset for available market advantageous in the most a principal market, of in the absence the Group. be by accessible must which or liabilities. assets identical for markets in active (unadjusted) prices 1 - Quoted Level or the asset for observable 1 that are within Level included prices than quoted 2 - Inputs other Level prices). from (i.e., derived or indirectly prices) (i.e., as liability, either directly (i.e., unobservable data market on observable based not or liability that are the asset 3 - Inputs for Level inputs). Total borrowings Less: cash in restricted deposit accounts (non- accounts deposit in restricted cash Less: current) Less: cash and cash equivalents Less: cash in restricted deposit accounts (current) Less: cash in restricted deposit accounts Net debt Total equity Total capital Total Gearing ratio Gearing Notes to the Financial the Statements to Notes (continued) Management Risk 3. Financial and Capital management risk 3.2 Capital a going as continue ability to Group’s the safeguard to are when managing capital objectives The Group’s structure. capital an optimal maintain and to shareholders, to returns provide to in order concern capital. total divided by debt net as calculated the gearing ratio of on the basis capital monitors The Group in the shown as borrowings' and non-current (including 'current borrowings total as calculated is debt Net as calculated is capital Total equivalents. and cash cash less Financial Position) of Statement Consolidated of structure The capital debt. net plus Financial Position, of Statement in the Consolidated 'equity' shown as follows: as is the Group margins funding at appropriate debt seek to 2017) was (unchanged from strategy During 2019 the Group’s revenue highly predictable have assets These assets. generation power long term against lenders from its capital or adjust maintain to in order In future, borrowing. long-term for stable considered and are streams or sell assets. shares new issue its debt, may restructure the Group structure, the Throughout funders. the debt by defined as covenants maintaining to subject are borrowings The Group's and management covenants borrowing complied with all external ended 31 December 2019 the Group year basis. or quarterly on a monthly compliance covenants with these the continued monitors estimation value 3.3 Fair defined is value Fair date. reporting at each value, at fair financial instruments certain measures The Group transaction a liability, in an orderly transfer or paid to sell an asset, to be received that would "the price as that the assumes measurement value The fair date". at the measurement participants market between either: place the liability takes transfer or to sell the asset to transaction • • within these and disclosed value at fair measurement to and financial liabilitiesAll financial assets subject follows: as defined are which of the levels hierarchy, value within the fair categorised are financial statements • • •
Good Energy Annual Report 2019 Report Annual Good Energy
124 3.1.3 Credit risk risk 3.1.3 Credit 31 December 2019 and 31 At customers. from its receivables from arises risk credit to exposure The Group’s which of details due within one year, as classed were receivables and other trade December 2018, the Group’s customers on new appropriate where checks credit undertake to is policy 21. The Group’s in note included are by determined amounts irrecoverable on estimated (ECLs) based losses credit expected for provide and to the by in part also is mitigated risk Credit experience. default and past specific circumstances to reference period the reporting the end of At customers. for payment of method a preferred debit as direct offer to policy risk. no further credit is that there and believe losses credit specific expected for provided have the Directors and and with banks deposits financial institutions. equivalents, and cash cash from arises also risk Credit and banks financial which when considering used the institutions quality of the credit monitor The Directors be should with. funds placed institutions receivables trade under IFRS 9. The Group’s in line requirements with The ECL model been has calculated these for providing for the simplified method used has the Group so financing component, significant no have been segmented have debtors ECL. Trade at lifetime measured is loss the impairment under IFRS 9. Therefore, with similar expected categories split is into type and age, meaning the debt customer of categories into losses. credit the expected measure matrix to a provision using date reporting at each performed is analysis impairment An and money, of the time value outcome, the probability-weighted reflects The calculation losses. credit current events, about past date at the reporting available that is information and supportable reasonable conditions. economic future of andconditions forecasts 3.1.2c Commodity price risk prices energy monitors Management prices. in energy fluctuations to in exposure result operations The Group’s power typically buys The Group risks. these to manage exposure to supply anddemand volumes and analyses commodity fluctuations. price of the risk of some mitigate to in order forwards willdepend the Group to risk the price or downwards, upwards significantly moves market If the wholesale power renewable being supplied by power of or deficiency including the excess factors upon a number of customers. to risk pass on the price to may be required at the time. The Group in place contracts purchase closely The Group customers. to notification advance can be prices amended with 30 days’ Retail necessary action take to ready it is so trends, and assesses market in the wholesale movements monitors when required. prices. in power changes to exposure further mitigate helps the Group of integration Vertical 3.1.2b Cash flow and fair value interest rate risk risk rate interest value and fair 3.1.2b Cash flow and the rates interest in fluctuations earnings from that arises the Group’s to the risk is The financial risk derivative use does not the Group facilities, bank overdraft short-term For rates. these of volatility of degree on short- rely to not is the Group of the policy as fluctuations rate interest to its exposure reduce to instruments their consider if they swaps rate interest use The Directors duration. significant any for facilities borrowing term swaps rate interest use may the Group borrowings, long term For be material. to risk rate interest to exposure in fluctuations any of the risk mitigate to balances in order material on these payable rate fix the interest to rates. interest 3. Financial and Capital Risk Management (continued) (continued) Management Risk 3. Financial and Capital (continued) 3.1 Financial risk factors Risk 3.1.2 Market risk 3.1.2a Currency contracts maintenance asset generation certain arising from risk exchange foreign to exposed is The Group the Group appropriate, deemed when it is that uppolicy, a set have Management in euros. payable are which 31 December at As exposure. exchange foreign reduce to contracts these against euros buy will forward rate exchange euro sterling to The annual exposure forward. purchased were no euros) (2018: 2019, no euros rate. the exchange in movement £4,600 per one percent currently is movements Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 127 Financial statements Identifying performance obligations in contracts performance Identifying the services of the timing and satisfaction Determining considerations agent Principal versus Notes to the Financial the Statements to Notes and Estimates Judgements 4. Critical Accounting and judgements make to has policies, management accounting applying the Group’s of In the process These in the financial statements. recognised on the amounts effect a significant that have estimates factors, and other experience on historical based and are continually evaluated are and estimates judgements events. future of including expectations analyses, sensitivity provide to appropriate not made, it is and judgements the estimates of nature the Given and any or estimate, judgement the initial from may differ results Actual otherwise. stated unless explicitly available. becomes information updated at a time when for accounted are changes subsequent below. detailed are and estimates judgements accounting these of critical The most 4.1 Judgements customers with contracts from revenue over 4.1.1 Judgements and timing of the amount of the determination that affect judgements applied the following The Group with customers: contracts from revenue (a) the for charges and standing unit include charges with customers contracts from revenues Good Energy’s these of Most fees. and FiT administration revenue, site generation and operational gas, electricity supply of separable. and are identifiable easily obligations are performance required is Good scheme, the FiT Energy to new who are customers from revenue FiT administration For payment a higher administration is and there a year, for that customer and administer register both to not are their account and scheme the FiT administering to a customer Registering OFGEM a result. as from the customer. administering and not registering for no fee is there obligations, as performance separable (b) and receives simultaneously the customer time, because over be recognised servicesto these is for Revenue Group. the by provided the benefits consumes (c) time over a service is and which gas, delivered supply electricity to with customers into entered are Contracts the principal. is the Group in which or gas), the electricity consumes the customer (as services on behalf of supply administration to with the customer, into entered are contracts FiT administration revenue to entitled not is the Group a principal, because OFGEM, not for an as agent acts OFGEM. The Group fee. only the administration FiT sites, the customers’ from terms with 15-day payment NHH customers the Group; by performance after place normally takes Payment debit and the Group direct monthly pay by Some customers terms. with 30-day payment and HH customers 3 months. every billed amounts recover to aims a lease contains if a contract determining 4.1.2 Leases: a for asset an identified of the use control to the right if it conveys a lease contains Under IFRS 16, a contract consideration. for time, in exchange period of the of use from benefits economic the all of substantially obtain to the right it has whether assesses The Group that asset. of the use direct to the right as well as asset, identified periods with any together the lease, of the non-cancellable as term term the lease determines also The Group by periods covered or any be exercised, to certain reasonably if it is the lease extend to an option by covered be exercised. to not certain reasonably if it is the lease terminate to an option located. are assets its generation on which the sites concern arrangements lease the Group’s The majority of with the sites, associated costs lease various of in respect additional consideration require arrangements These rights. and easements/access rent substation being primarily rent, base 99 99 615 615 Total Total £000’s £000’s 99 99 615 615 £000’s £000’s Level 3 Level Level 3 - - - - £000’s £000’s Level 2 Level Level 2 - - - - £000’s £000’s Level 1 1 Level Level 1
Good Energy Annual Report 2019 Report Annual Good Energy
Assets or profit through value Fair assets financial loss Other interests in associates assets financial Total 2019 2019 Liabilities or profit through value Fair liabilities financial loss Contingent consideration liabilities financial Total Cars Green Next to granted loan stock convertible secured £614,920 of recognised the Group During the year, the financial Both business. in this its investment part £99,000, as of of consideration contingent as well as Ltd, per disclosed are transaction this of 3. Further details Level as and financial been liability defined asset have 19. note the involves method This methodology. flow cash discounted the using valued are The financial assets derived rate A discount and principal repayment. interest the loan of from received flows cash of projection the asset. of value the present establish to series flow the cash applied is to costs borrowing the Group's from the discounted compared has the Group option, a convertible contains asset that this given Additionally is presented that the valuation ensure to if converted the asset of with the value value fair derived flow cash contractual. are converted the loan if not from flows cash of The specific timings and amounts true and fair. asset. this of value fair in a lower result would borrowing of cost the Group's to increases Significant become would that outflow cash contractual on the expected based valued The financial liabilities are made with outflows cash of 19, and the likelihood out in note set the milestones of upon satisfaction payable Cars Ltd. Green Next associate, the Group's outlook of the financial and product to reference in, or changes no subsequent were there above, the financial instruments of the initial recognition Following ended 31 December 2019. the year for 3 instruments Level or from, to transfers 126
3. Financial and Capital Risk Management (continued) (continued) Management Risk 3. Financial and Capital (continued) estimation value 3.3 Fair included is the instrument data, market on observable based not inputs is the significant of If one or more 3. within Level through our investments all of of value the fair monitor to continue we financial review, our overall partAs of across all assets of the underlying economics in addition to the wider environment of an understanding both the business. at method valuation by value, at fair measured that are financial assets the Group’s presents below The table 31 December 2019. Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 129 Financial statements Notes to the Financial the Statements to Notes (continued) and Estimates Judgements 4. Critical Accounting (continued) 4.2 Estimates assets and contract receivables, and intercompany trade losses of credit expected for 4.2.2 Provision (continued) conditions economic forecast rates, default observed historical between the correlation of The assessment and of in circumstances changes to sensitive is ECLs of The amount estimate. and a significant is ECLs economic of and forecast experience loss credit historical Group’s The conditions. economic forecasted in the future. default actual customers’ of be representative not may also conditions with IFRS 9. A provision been made in accordance have provisions in recognising undertaken The assessments about model. Information loss credit on an based expected established is receivables trade of impairment for 21. note in disclosed is receivables trade on the Group’s the ECLs the expected which balances for with its subsidiaries, receivable material holds also Company The Parent with IFRS 9. Information in accordance impairment, for a provision in establishing used model also is loss credit 18. per note can be found undertakings Group loans to Company about the Parent costs purchase 4.2.3 Power the be due to finalised supply to of the date from 14 months can typically take costs purchase Power for data and consumption finalise generation to in order complete to has market that the energy processes be estimated to that needs costs purchase power of an is element there Therefore, one particular month. any in time. particular point at any available that is data and industry in-house of on a combination based 4.2.4 Inventories of Statement in its Consolidated Obligation (ROCs) Certificates inventory as carries Renewable The Group made Gains or losses value. realisable or estimated cost of at the lower valued are These Financial Position. Income when Comprehensive of in the Statement only recognised are sold, subsequently on ROCs are which crystallise. they (April the compliance year following OFGEM in October a ROC only published by is of The final out-turn value ROCs previously of or purchase on the sale or losses gains to a final adjustment may require which March) to Income. Comprehensive of Statement in the Consolidated recognised
Good Energy Annual Report 2019 Report Annual Good Energy
The land easements and access rights are physically distinct identified assets, which enable to Group to to Group to enable which assets, identified distinct physically are rights and access The land easements and maintenance generation, power the specific purposes of for the land andaccess wind/solar farms, the of the duration for active are rights and access land These easements equipment. the generation of in nature. perpetual, deemed specific, not are meaning that they term, lease and access easements those of the use from benefits the economic all of substantially receives The Group equipment. the generation of and maintenance generation power the specific purposes of for right, the land. The access to a tenant as right the Group's breach not must that the landlord state The leases by assets on the generation be completed to work and replacement repair maintenance, instructs Group - being assets the identified of the use direct to the right have to the Group parties, requires which third rights. and access the land easements 128 4.2.2 Provision for expected credit losses of trade and intercompany receivables, and contract assets and contract receivables, and intercompany trade losses of credit expected for 4.2.2 Provision The receivables. trade (ECLs) for losses credit expected calculate to matrix a provision uses The Group similar loss that have segments customer various of groupings due for past on days based are rates provision type). type, payment customer (e.g. by patterns the adjust to calibrated rates, default observed historic initially matrix is on the Group’s based The provision conditions economic if forecast instance, For information. with forward-looking experience loss credit historic the defaults, number of an increased can which lead to year the next over deteriorate to expected are updated are rates default observed the historical date, reporting every At adjusted. are rates default historical analysed. are estimates and in the forward-looking changes 4.2 Estimates customers with contracts from revenue over 4.2.1 Estimates or electricity in units of the quantity of estimate an industry includes sales energy from calculated Revenue period. It also the reporting the end of preceding during the 12 months customers the Group's suppliedgas to charge. per price unit, sales and standing the average of in the form an estimate includes unit consumption. and price estimated transaction with a fixed estimated, is figure revenue the total 15% of and rates, consumption estimated industry patterns, consumption historical using made is The estimate upon the which processes, reconciliation industry consideration into and takes available, seasonality data the after 14 months the industry from available is data final reconciliation until position a prudent takes Group supply date. is uncertainty estimation to subject income accrued of that the amount identified has The Group £1.1m. approximately • • • rights and access land that these easements concluded have management the above, On of the basis the underlying lease. part as of be treated therefore 4.1 Judgements (continued) 4.1 Judgements a lease (continued) contains if a contract determining 4.1.2 Leases: or entity another the land of or cross access use, to or rights land easements to in particular refer rights Access land the but do not use to the right the Group give arrangements a specified purpose. The lease individual, for control. to or right use of exclusivity the Group give management leases, the relevant part of form rights and access land these easements whether In assessing the following; determined have 4. Critical Accounting Judgements and Estimates (continued) and Estimates Judgements 4. Critical Accounting Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 131 Financial statements Supply Companies (including electricity supply, FiT administration and supply), gas Supply Companies supply, FiT administration (including electricity companies), companies (including wind and solar generation Generation Electricity companies), development (29 early stage Development Generation PLC. Group Good Energy of Holding companies, being the activity Notes to the Financial Statements Financial the Statements to Notes Analysis 6. Segmental Board The ‘Board’). (the Directors of Board the as been has identified decision-maker operating The chief Management resources. and allocate performance assess to order in reporting internal the Group’s reviews from the business considers Board The reports. on these based segments operating the determined has the of each for accounting subsidiaries main trading the of with each perspective, class a business classes. business are:- The main segments • • • • segments. operating reportable the above form to been aggregated have segments No operating primarily based on summary segments financial the operating of the performance assesses The Board and liabilities and and assets loss, profit of analysis An below. reproduced are which of extracts information, reported to analysis segmental of with a reconciliation business, of class by asset, non-current additions to follows. results on an transactions arm’s in a manner length basis similar to are segments operating between prices Transfer parties. with third 151 607 361 2018 2018 (397) (4.6p) (4.6p) £000’s £000’s 343 233 2019 2019 (859) (283) (5.9p) (5.7p) £000’s £000’s
Good Energy Annual Report 2019 Report Annual Good Energy
Operating Loss per share: discontinued operations discontinued per share: Loss Basic Diluted Investing Financing Net cash inflow cash Net 130
5. Discontinued Operations 5. Discontinued been made have and efforts discontinued, are which activities Development Generation has The Group parties who will continue external to sales in part through portfolio, this from value realise to during the year the Consolidated of analysis in the segmental shown are segment this of The results the sites. develop to 6. Income, per note Comprehensive of Statement disposal groups as classified were which segment Development the Generation of assets of The major classes down written or were during either sold the year, 23) were December at 31 as sale per (as 2018 note held for £nil, described as below. to following sold, - was Solar Limited Brynwhilach Park - Good Energy the Group On a subsidiary 3 May 2019, of Group £362,934. The gain of a net realised The sale agreement. the sale of completion the successful The being during sold the year. that property prior to property, on a residential loss an impairment recognised £48,000. of loss a net realising itself £199,982 with the sale to amounted sale to prior recognised impairment and the project a wind development of in respect losses impairment recognised the Group During the year, assets these of writing both fully thereby £1,293,733 and £299.875 respectively, of transformer, Mapperton additional information. 23 for note to refer £nil. Please to down year. the for operations the discontinued to related charge) (2018: £56,013 tax charge a £32,008 tax is There follows: as are in the year operations the discontinued of flows cash The net Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements - - - Total 1,617 £000’s 1,613 3,745 5,962 (4,345) (1,726) 18,826 99,964 33,386 (83,538) (25,698) 118,790 113,179 116,924 133 - - - - - 9 9 (4) (72) (63) (687) (687) (500) (124) 7,734 £000’s (9,763) 17,497 Generation Development (discontinued) - - 500 1,617 2,304 3,745 6,649 £000’s (4,345) (1,726) 28,589 82,467 33,449 Total - (83,466) (25,574) 111,056 113,170 116,915 Financial statements continuing operations - - 6 - - 500 (645) 4,369 (783) £000’s (4,369) (4,015) (3,232) (4,369) (3,087) 21,451 Holidng (52,095) (73,546) companies/ adjustments consolidation - - - 34 592 195 (315) 4,369 3,745 4,166 8,309 4,481 £000’s (5,644) (3,574) (3,828) 99,253 104,897 Electricity Generation - - - 12 1,577 5,727 5,715 (4,369) (1,081) £000’s 63,898 51,116 12,782 28,968 (79,638) (22,172) 112,975 112,975 companies Total supply - - - Gas 9,423 £000’s Supply 27,998 27,998 (18,575) - - - FIT (873) 4,856 4,856 3,983 £000’s Admin- istration - - £000’s (4,369) 80,121 80,121 15,562 Supply (60,190) Electricity Additions to Additions non-current assets Year ended 31 December 2018 Revenue Revenue from contracts with customers Inter-segment revenue Profit/(loss) tax before Segments assets & liabilities Segment assets Segment liabilities assets/ Net (liabilities) FiT/ROC subsidy revenue Total Revenue Net finance income/ (costs) Inter-segment cost of sales Operating profit/(loss) Expenditure Cost of sales Gross Profit/ Gross (loss) Administrative expenses Tidal lagoon write-off Depreciation & amortisation Notes to the Financial the Statements to Notes (continued) Analysis 6. Segmental Kingdom. within the United arose All turnover and the elimination of electricity generated of sales inter-company to relate Consolidation adjustments balances. inter-company
- - 328 (42) 998 Total Total 9,054 4,643 £000’s (4,273) (1,289) 30,502 18,780 97,584 (93,847) 123,351 124,349 116,364 (24,570) ------91 91 225 505 £000’s (930) (930) (1,246) (1,155) 12,235 (11,730) Generation Generation Development Development (discontinued) - - (42) 998 9,054 1,258 5,573 Total - Total (1,289) (4,273) £000’s 31,657 30,510 85,349 (92,601) (24,795) 123,260 124,258 115,859 continuing continuing operations - - - - (42) 6,084 (198) 1,041 (923) Holding £000’s (6,084) (2,780) (6,084) (3,943) (2,184) (2,978) 21,624 (23,808) companies/ adjustments consolidation - - - 998 1,054 (426) 1,697 8,779 5,090 4,857 6,084 4,431 (3,922) £000’s (1,543) (3,377) 63,633 65,176 Electricity Electricity Generation - - - - 27 2,923 4,147 4,120 £000’s (6,084) (1,091) 26,800 54,410 10,429 43,981 (88,679) (21,589) 121,563 121,563 companies Total supply Total - - - Gas Supply 7,500 £000’s 26,335 26,335 (18,835) - - - FIT (462) 5,247 5,247 4,785 £000’s Admin- istration - - Supply (6,084) £000’s 89,981 89,981 14,515 (69,382) Electricity Electricity
Good Energy Annual Report 2019 Report Annual Good Energy
Revenue Revenue from contracts with customers Administrative expenses Year ended Year December31 2019 Total revenue Depreciation & amortisation Additions to non-current assets Gross profit Share of Loss of Associate FiT/ROC subsidy revenue Expenditure Cost of sales Profit/(loss) before tax Segments assets & liabilities Segment assets Inter-segment revenue Operating profit/(loss) Net assets/ (liabilities) Net finance income/ (costs) Segment liabilities Inter-segment cost of sales 132
6. Segmental Analysis (continued) Analysis 6. Segmental Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 135 110 358 119 186 459 184 296 303 2018 2018 2018 (202) 9,520 1,019 £000’s 11,356 11,154 Number Number Financial statements 81 121 107 185 529 177 306 284 (356) 2019 2019 2019 1,159 £000’s 11,666 13,079 13,435 Number Number Operations Wages and salaries Social security costs Share based payments Operations Business services Other pension costs Business services Total management and administration and management Total Capitalised staff costs costs staff expensed Total Total staff costs Total management and administration and management Total Notes to the Financial the Statements to Notes (continued) Expenses and Administrative Profit 7. Operating with platform services technology customer in a new our investment to relate in the year Non-underlying costs our operating part as £351,401 of of provision a restructuring of comprise costs These Ltd. Technologies Kraken £513,690. Capitalised expenditure of implementation system the Kraken of and the costs model transformation as assets intangible additions to are these £663,596; totalled in the year implementation system on the Kraken development. of under the course assets Income Comprehensive of Statement Company 8. Parent the Income of Comprehensive of 2006, the Statement the Companies 408 of Act Section by permitted As for or loss profit Company The Parent financial statements. these part as of presented not is Company Parent Financial Position. of Statement Company Parent the of at the foot disclosed is taxation) (after the year Costs 9. Staff follows: as were remuneration, including Directors’ costs, Staff follows: as end were at the year including Directors, the employees, of numbers The total Details of share based payments can be found in note 32. in note can be found payments based share of Details follows: as was during the year including the Directors, employees, number of monthly The average - - - - - 60 96 48 624 858 880 204 378 500 2018 2,948 3,869 2,006 3,268 3,576 1,232 26,800 £000’s 27,424 13,622 27,424 (1,027) - - - - - 99 28 865 171 100 227 139 2019 (225) 2,700 1,154 1,019 2,974 3,674 1,285 3,050 (316) 25,219 £000’s 25,859 14,034 25,859 15 17 16 Note
Good Energy Annual Report 2019 Report Annual Good Energy
Total Non-underlying costs Discontinued Split between: Continuing administrative expenses Depreciation of property, plant and equipment Depreciation of property, The operating profit is stated after charging: stated after is profit operating The assets Amortisation of intangible Depreciation of right of use assets Depreciation of right Audit of parent and consolidated financial statements Audit of parent and consolidated financial Lease rentals Auditors’ remuneration Audit of subsidiaries audit Fees in relation to overruns of prior year (audit) Subtotal Other services Staff costs Subtotal (non-audit) following: the comprise expenses administrative The Marketing costs Professional fees and bank charges Expected credit loss provision Write back of unclaimed overpayments Depreciation and amortisation WIP writedown Rent and office costs Write down of investment in Tidal Lagoon (Gain)/loss on disposals Total 134
7. Operating Profit and Administrative Expenses and Administrative Profit 7. Operating Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 137 - - - - 56 26 660 716 505 211 716 716 192 2018 2018 2018 3,051 1,092 4,361 £000’s £000’s £000’s Financial statements 32 42 74 8 10 18 28 93 46 74 2019 908 374 193 (47) £000’s 2019 2019 2,956 4,439 £000’s £000’s Adjustments in respect of prior years below) (see tax current Total tax Deferred Origination and reversal of temporary differences Analysis of tax charge for the year the for charge tax Analysis of Current tax Current tax Income tax attributable to discontinued operations Income tax expense reported in the statement of profit and loss - continuing operations Adjustments in respect of prior years year the charge for tax Total On bank loans and overdrafts On bank loans and On corporate bond Other interest payable Total deferred tax (see note 25) note (see deferred tax Total Interest on lease liabilities Amortisation of debt issue costs Amortisation of debt Tax on profit on ordinary activities profit on ordinary on Tax Total Notes to the Financial the Statements to Notes 12. Finance Costs 13. Taxation Adjustments in respect of prior year deferred tax amounts are from differences relating to capital allowances allowances capital to relating differences from are amounts tax deferred prior year of in respect Adjustments claimed. - 16 16 107 358 2018 2018 1,373 1,838 £000’s £000’s 80 86 96 81 166 2019 2019 1,304 1,481 £000’s £000’s
Good Energy Annual Report 2019 Report Annual Good Energy
Bank and other interest receivables Total finance income Short term employee benefits Short term employee Directors’ and Key Management emoluments Directors’ and Key Post employment benefits Post employment Fair value gains Share based payments Total 136 11. Finance Income The team. and the executive PLC Group Good Energy of be the Directors to considered are Management Key above. in the table included are teams these to relating emoluments money of (2018: 3) in respect the Group of Directors 2 to accruing were benefits retirement During the year schemes. pension purchase (2018: £323,336), including £339,186 of paid remuneration the Group paid Director, the highest of In respect £27,580 (2018: £27,170). of schemes pension purchase money to contributions consists which the Board of Committee the Remuneration by set is the Directors for Individual remuneration in place. policies are Insurance Keyman Appropriate Directors. Non-Executive of entirely Management and Key Directors or former current by exercised were options 90,000 share During the year, on the Management or Key Directors current made by gains of amount (2018: 100,350). The aggregate £4,875 (2018: £121,476). was options share of exercise Directors’ in the in the table given AIM rule 19 are by required as remuneration the Directors’ of Details reference. cross by note in this included on page and 75 are report remuneration
10. Directors' and Key Management Remuneration Management and Key 10. Directors' Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 139 - 2018 £000’s 901 5.6p 2018 2018 1,644 10.2p 16,109 16,109
Consolidated 10 2019 £000’s Financial statements Consolidated Consolidated - 2018 £000’s 254 7.5p 1.6p 2019 2019 1,216 16,294 16,294 - Parent Company Parent 2019 £000’s UK Corporation Tax on profits for the year UK Corporation Tax Continuing operations Profit/(loss) attributable to owners of the Company (£000’s) Basic weighted average number of ordinary shares (000’s) share per earnings/(loss) Basic Profit/(loss) attributable to owners of the Company Profit/(loss) attributable to owners of (£000’s) Basic earnings/(loss) per share per earnings/(loss) Basic Basic weighted average number of ordinary shares Basic weighted average number of (000’s) Diluted to shares ordinary number of average the weighted adjusting by calculated is earningsDiluted per share arise from shares ordinary dilutive Potentially shares. ordinary dilutive all potentially of conversion assume contingent is awards these of the vesting plans. Where incentive share-based made under the Group’s awards is shares ordinary dilutive potentially condition, number the of a serviceon satisfying or performance shares ordinary dilutive the period. Potentially the condition at the end of of on the status based calculated during the period shares ordinary the Company’s of price market only when the average dilutive actually are awards). (other price or issue (options) price their exercise exceeds Notes to the Financial the Statements to Notes (continued) 13. Taxation Financial Position of as per Statement Consolidated payable/(recoverable) tax Corporation 14. Earnings/(Loss) per Share Basic the of owners to attributable dividing the profit/(loss) by calculated is Basic earnings/(loss)per share 293,270 excluding after during the year shares ordinary number of average the weighted by Company Group the Good Energy for in trust Limited Corporation Trust Willmott Clarke held by (2018: 403,270) shares Trust. Benefit Employee - - - - 307 235 211 132 716 (46) (85) (38) 2018 2,304 1,617 (687) £000’s - - - 8 62 74 328 323 (79) (15) (29) (48) 2019 1,258 (930) (148) £000’s
Good Energy Annual Report 2019 Report Annual Good Energy
Accounting profit before tax from continuing Accounting profit operations discontinued operations Loss before tax from Accounting profit before income tax income before profit Accounting Profit before tax multiplied by the standard rate of Profit before tax multiplied by the standard (2018: 19.00%) corporation tax in the UK of 19.00% Expenses not deductible for tax purposes Tax effects of: Share of loss in associate Non-taxable gain on sale of investment Effects of changes in tax rate Restricted interest costs deduction Share-based payment adjustment Prior year adjustments Deferred tax on losses not recognised Recognition of deferred tax on losses previously unrecognised Deferred tax on interest costs recognised Total tax charge for the year the charge for tax Total
(continued) (continued) 13. Taxation the year for charge the tax affecting Factors UK of in the tax corporation of rate higher (2018: higher) than is the standard the year for assessed The tax follows: as explained are The differences 19.00% (2018: 19.00%). Notes to the Financial the Statements to Notes Factors that may affect future tax charges tax future that may affect Factors 2016 (on 15 the Finance Act part as of enacted substantively were rates tax the UK corporation Changes to 2020. 1 April 17% from to tax corporation of the main rate to a reduction included 2016), which September within these included are their effects date, at the reporting enacted been substantively have the changes As 17%. of a rate using been calculated balances have tax deferred Accordingly, financial statements. remain to is rate tax 2020 announced that the UK corporation on 11 March The Chancellor's Spring Budget not balances have tax 2020. The deferred on 11 March enacted was 2020. This 1 April from at 19% effective liability tax deferred changeclosing on the rate this of impact and this the overall reflect to been updated £106,000. of be an increase would 138 Strategic Report Governance Report Financial Statements 141 164 354 112 Total (160) £000’s 50,351 64,558 46,326 62,715 (2,700) (1,795) (14,207) (16,389) 50 50 164 (160) assets £000’s 49,759 62,081 46,131 60,721 (2,482) (1,250) (12,322) (14,590) Generation Generation Financial statements - - 62 61 394 304 1,800 1,317 (154) (545) £000’s (1,406) (1,256) fittings & & fittings Furniture, equipment - - - - - 198 677 134 677 (64) (543) (479) £000’s Leasehold Leasehold improvements At 31 December 2019 December 31 At Disposals 2019 December 31 At Net book value At 1 January 2019 Charge for the year Accumulated depreciation At 1 January 2019 IFRS 16 Reclasses to right-of-use assets under Disposals 2019 December 31 At Additions Reclasses to right-of-use assets under IFRS 16 Reclasses to right-of-use Cost At 1 January 2019 Consolidated 2019 December 31 ended Year Notes to the Financial the Statements to Notes and Equipment Plant 15. Property, 901 5.5p 2018 2018 1,664 10.0p 16,807 16,399 Consolidated Consolidated 254 7.2p 1.5p 2019 2019 1,216 16,807 16,807
Good Energy Annual Report 2019 Report Annual Good Energy
Continuing operations Profit/(loss) attributable to owners of the Company Profit/(loss) attributable to owners of (£000’s) share per earnings/(loss) Diluted Weighted average number of diluted ordinary Weighted average number of diluted shares (000’s) Profit/(loss) attributable to owners of the Profit/(loss) attributable Company (£000’s) Weighted average number of diluted ordinary Weighted average number of diluted shares (000’s) share earnings/(loss) per Diluted 140
14. Earnings/(Loss) per Share (continued) per14. Earnings/(Loss) Share the Company’s of price market The average effect. the dilutive the greater excess, such any The greater was incentives share-based of effect (2018: 126p). The dilutive 138p was during the year shares ordinary 513,596 was operations continuing for incentives share-based of effect The dilutive 513,596 (2018: 289,262). (2018: 289,262 shares). shares Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 143 - - - Total 8,327 8,327 6,483 (690) £000’s (1,154) (1,844) - - - Financial statements (50) (50) 1,250 1,150 1,250 (100) assets £000’s Generation Generation - - - 239 1,393 1,393 (640) (514) £000s (1,154) and equipment and Furniture, fittings fittings Furniture, - - - - 5,684 5,684 5,094 (590) (590) £000s buildings Land, land land Land, easements and and easements Adjustments on transition to IFRS 16 Cost At 1 January 2019 Adjustments on transition to IFRS 16 Accumulated depreciation At 1 January 2019 Charge for the year At 31 December 2019 December 31 At Consolidated 2019 December 31 ended Year At 31 December 2019 December 31 At At 31 December 2019 December 31 At Net book value At 1 January 2019 Notes to the Financial the Statements to Notes and Leases Assets Use of 16. Right located, are assets land its generation on which of, and use to, the access for contracts lease has The Group licences. and software equipment buildings, other office office 20 and 30 years, between of terms lease typically have rights) access of land (inclusive of Leases between of terms lease have licences and software equipment other whilst 6 years, to 4 between buildings of assets. the leased title to the lessor's by secured are obligations under its leases The Group's 3 and 10 years. value with low machines, and water and coffee laptops, printers, of leases certain has also The Group leases. these of in respect exemption applied has the recognition The Group underlying assets. party, therefore another to the underlying assets subleasing from a restriction imposes generally lease Each the Group. can by only be used assets the right-of-use leases leases, short-term of exception (with the agreements lease the Group's within all of payments The lease to linked are component) payment lease a variable containing leases and those underlying assets, value low of Index. Price in the Retail annual charges or depend on an index do not which payments lease variable to subject leases several has The Group on the actual based are payments the lease where assets, generation the Group's to relate These rate. in not, are payments These upon the weather). turn in dependent (which is the asset of performance liability the lease and of the initial measurement from excluded are and therefore fixed, substance, asset. right-of-use and plant its property, with that of in a manner consistent assets its right-of-use classifies The Group split by charge with the depreciation together assets, the right-of-use of The carrying values equipment. below: shown are underlying asset, of class - - - (4) 330 Total 52,973 £000’s 64,232 50,351 64,558 (2,948) (11,259) (14,207) - - - 34 (4) assets 52,312 £000’s 62,051 49,759 62,081 (2,583) (9,739) (12,322) Generation Generation - - - - 523 151 394 1,649 1,800 (280) £000’s (1,126) (1,406) fittings & & fittings Furniture, Furniture, equipment - - - - 138 145 532 198 677 (85) (479) (394) £000’s Leasehold Leasehold improvements
Good Energy Annual Report 2019 Report Annual Good Energy
At 31 December 2018 December 31 At At 1 January 2018 Net book value At 31 December 2018 December 31 At Disposals Charge for the year Assets held for sale At 1 January 2018 Accumulated depreciation At 31 December 2018 December 31 At Disposals Additions Assets held for sale At 1 January 2018 Cost Consolidated ended 31 December2018 Year (wind turbines, solar panels and assets ancillaries). generating electricity to relate assets The generation Good Delabole Wind Farm Limited; Good subsidiaries: held within the Company’s Energy are assets These Creathorne Good Solar Limited; Energy Park Woolbridge Good Hampole Wind Farm Energy Limited; Energy Carloggas Good Solar Limited, Solar Energy Limited, Park Park Wood Rook GoodSolar Energy Limited, Park Solar Limited. Park Roads Cross and Good End Solar Limited Energy Park Lower Good Energy loan liabilities. bank been security and pledged as against other have assets These 23. in note disclosed are sale held for assets to reclassified Assets a result held under as finance leases, assets right-of-use include do not above disclosed assets The tangible and their assets the right-of-use of 1 January 2019. Details from IFRS 16 Leases of the implementation of 16. in note disclosed liabilities lease are associated
15. Property, Plant and Equipment (continued) (continued) and Equipment Plant 15. Property, Notes to the Financial the Statements to Notes 142 Strategic Report Governance Report Financial Statements 145 336 Total 8,489 1,834 3,586 9,192 4,454 (171) (847) (284) £000’s (4,903) (4,738) - - - - - 123 949 949 1,110 1,110 (284) £000’s Assets under under Assets development the course of of course the Financial statements ------1,446 1,446 1,446 1,446 £000’s Goodwill - - - - - 51 149 149 149 (98) (98) costs £000’s Website Website development development - 336 701 (73) 5,604 1,711 6,468 1,828 (847) £000’s (4,903) (4,640) licences Software Software ------180 180 180 180 supply supply Power Power £000’s licence Cost At 1 January 2019 Accumulated amortisation At 1 January 2019 Reclasses to right-of-use assets under IFRS 16 Charge for the year 2019 December 31 At Reclasses to right-of-use assets under IFRS 16 Impairment Additions 2019 December 31 At Consolidated December 31 ended Year 2019 Net book value At 1 January 2019 At 31 December 2019 December 31 At Notes to the Financial the Statements to Notes (continued) and Leases Assets Use of 16. Right - rent' 'revenue as - known payment top-up a will receive the landlord particularlywell, performs If a site payment. lease a variable and considered is generated the revenue of at a percentage calculated is which be material. to considered not are amounts These and termination buildings extension include which office concerning contracts lease has also The Group options. and term the lease extend to options any exercise to expect do not management all leases, for Materially, the lease. terminate to options any exercise not to expect leases of respect in commitments had no lease the Group date, Financial Position of the Statement At in respect agreements lease any into entered yet not has Group The commenced. yet but not to, committed premises. new of the construction of Assets 17. Intangible 54 55 385 126 373 711 1,154 1,648 5,684 5,384 4,673 5,384 (799) £000s £000s
Good Energy Annual Report 2019 Report Annual Good Energy
Total cash outflows for leases of £908,094; of leases for outflows cash Total or liabilities; assets right-of-use No additions to and transactions; sale leaseback arising from or losses gains to giving rise No transactions leases. short-term to relating No amounts Depreciation of right-of-use assets (included within cost-of-sales Depreciation of right-of-use assets (included and administration expenses) Interest expense on lease liabilities assets (included within Expense relating to leases of low-value administration expenses) Variable lease payments (included within administration expenses) Income Comprehensive of Statement the in recognised amount Total At 1 January 2019 Additions Accretion of interest Payments 2019 December 31 At Current (see note 26) Non-current (see note 26) Total
16. Right of Use Assets and Leases (continued) and Leases Assets Use of 16. Right and the movements liabilities lease within borrowings) (included of the carrying amounts are Set out below during the period: Notes to the Financial the Statements to Notes • During the year, the Group had the following: the Group During the year, • • • lease Included sit. within these assets the land its generation on which for contracts lease has The Group (which site each of performance the actual on based are which payments, lease variable are arrangements upon weather). the dependent is itself within the payments the minimum rental of reflective payment, rent a base contains arrangement lease Each on based are included payments rental Additional the landlord. to obligation guaranteed is rental This contract. site. each by generated the revenue The maturity analysis of lease liabilities is disclosed in note 26. in note liabilities lease disclosed is of The maturity analysis Income: Comprehensive of in the Statement recognised the amounts are The following 144 Strategic Report Governance Report Financial Statements 147 Total Total 3,082 (500) £000’s £000’s 41,694 35,248 14,882 35,248 29,160 (9,028) (2,102) 3% 8% (18,868) 2018 20%-30% Financial statements 3,082 (500) £000’s £000’s 37,048 30,602 14,882 30,602 24,514 (9,028) (2,102) (18,868) undertakings undertakings undertakings Loans to Group Group to Loans Loans to Group Group to Loans 8% 3% 2019 20%-30% ------4,646 4,646 4,646 4,646 £000’s £000’s undertakings undertakings Shares in Group Group in Shares Shares in Group in Shares Provisions Parent Company Company Parent 2018 December 31 ended Year Cost and net book value At 1 January 2018 Additions Repayments 2018 December 31 At Repayments 2019 December 31 At Provisions Additions Cost and net book value At 1 January 2019 Value in use assumptions Company Parent 2019 December 31 ended Year Pre-tax discount rate Gross margin* five year plan Growth rate beyond Loans to Group undertakings are repayable by 31 December 2035. Interest rates charged on these loans on these charged rates 31 December 2035. Interest by repayable are undertakings Group to Loans 8.85%. 0.00% to from range Notes to the Financial the Statements to Notes (continued) Assets 17. Intangible indefinite the of the carrying values of in respect required is impairment that no was review this of The result follows: as are in use value for assumptions The key assets. life and Subsidiaries 18. Investments levels. at varying cashflow year been modelled in the five have margins *Annual in the that an increase been It has noted review. on the impairment been has performed Sensitivity analysis in increase any the goodwill. believe Management of in an impairment result not 100% would by rate discount headroom. be significant to there believe the Directors and therefore be remote 10% to above rates discount 9 (9) Total 7,589 1,287 3,544 8,489 3,586 (378) (867) £000’s (4,045) (4,903)
- - - - - 351 351 1,137 1,110 1,110 (378) £000’s Assets under under Assets development the course of of course the ------1,446 1,446 1,446 1,446 £000’s Goodwill - - - 9 6 (9) (9) 152 143 149 149 costs £000’s Website Website development development - - - 144 701 5,460 1,424 5,604 (867) £000’s (4,036) (4,903) licences Software Software ------180 180 180 180 supply supply Power Power £000’s licence
Good Energy Annual Report 2019 Report Annual Good Energy
At 1 January 2018 Cost 2018 December 31 At Impairment 2018 December 31 At At 1 January 2018 Accumulated amortisation At 1 January 2018 Charge for the year Disposals Net book value Additions Disposals Consolidated December 31 ended Year 2018 At 31 December 2018 December 31 At 146
17. Intangible Assets (continued) Assets 17. Intangible Notes to the Financial the Statements to Notes Assets under the course of development relate largely to the implementation of a new domestic customer customer domestic a new of the implementation to largely relate development of under the course Assets expenses. within administration included are All amortisation amounts (Kraken). billing system the original arising £1,060,996 (2018: £1,060,996) Goodwill from comprises: £1,446,453 (2018: £1,446,453) of the wind of the original acquisition and £385,457 (2018: £385,457) from Limited, Good Energy of acquisition at Delabole. farm £1,446,453 goodwill of are: assets in intangible included assets life indefinite of The carrying values subsidiary, the to relates £180,000 (2018: £180,000) which licence supply of (2018: £1,446,453), and a power have management life, an indefinite have assets In that these arriving the conclusion at Limited. Good Energy OFGEM. The by stipulated conditions of breach any until awarded supply licence is that the power observed An impairment standards. is accounting review undertaken goodwill aligned is of with relevant treatment frequently. annually or more Strategic Report Governance Report Financial Statements 149 company generating asset generating asset generating asset generating asset generating asset generating asset generating asset generating asset generating asset generating asset generating asset generating asset generating asset generating asset generating asset generating asset generating asset generating asset generating asset generating asset Investment holding Investment holding Development of an energy Development of an Development of an energy Development of an Development of an energy Development of an Development of an energy Development of an Development of an energy Development of an energy Development of an energy Development of an energy Development of an energy Development of an energy Development of an energy Development of an energy Development of an energy Development of an energy Development of an energy Development of an energy Development of an energy Development of an energy Development of an energy Development of an energy Financial statements 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% UK UK UK UK UK UK UK UK UK UK UK UK UK UK UK UK UK UK UK UK UK Good Energy Mapperton Good Energy Mapperton Solar Park (007) Limited Good Energy Tidal Limited Good Energy Tidal Good Energy Development (No.1) Limited Good Energy Development Good Energy Development (No.3) Limited Good Energy Development Good Energy Development (No.4) Limited Good Energy Development (No.5) Limited Good Energy Development (No.6) Limited Good Energy Development (No.7) Limited Good Energy Development (No.8) Limited Good Energy Development (No.9) Limited Good Energy Development (No.10) Limited Good Energy Development (No.12) Limited Good Energy Development (No.14) Limited Good Energy Development (No.15) Limited Good Energy Development (No.16) Limited Good Energy Development (No.17) Limited Llangyfelach Community Solar Farm C.I.C Worminster Down Somerset Community Solar Farm C.I.C Good Energy Development (No.20) Limited Good Energy Development (No.21) Limited Good Energy Development (No.22) Limited Notes to the Financial the Statements to Notes and Subsidiaries (continued) 18. Investments machinery machinery subsidiaries Supply of gas administration generation sites generating asset generating asset Holding company Nature of business of Nature Supply of renewably Supply of renewably for generating assets power by solar panels power by solar panels power by solar panels power by solar panels power by solar panels power by solar panels Generation of electric Generation of electric Generation of electric Generation of electric Generation of electric Generation of electric Generation of electric Generation of electric power by wind turbine power by wind turbine Holding company for a sourced electricity and FIT sourced electricity Development of an energy Development of an energy generating asset sub group An investor in potential new 85% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Parent Company Parent Proportion of ordinary ordinary of Proportion shares directly held by by held directly shares UK UK UK UK UK UK UK UK UK UK UK UK UK UK UK Country of of Country place of business placeof incorporation and and incorporation
Good Energy Annual Report 2019 Report Annual Good Energy
Good Energy Hampole Windfarm Limited* Good Energy Woolbridge Solar Park (010) Limited* Good Energy Creathorne Farm Solar Park (003) Limited* Good Energy Rook Wood Solar Park (057) Limited* Good Energy Carloggas Solar Park (009) Limited* Good Energy Lower End Farm Solar Park (026) Limited* Good Energy Cross Road Plantation Solar Park (028) Limited* Good Energy Delabole Windfarm Limited Good Energy Cedar Windfarm Limited* Good Energy Lanyon Solar Park (011) Limited Good Energy Limited Limited Good Energy Gas Good Energy Generation Limited Good Energy Generation Holding Company No.1 Limited Good Energy Generation Assets No.1 Limited* Name 148
18. Investments and Subsidiaries (continued) and Subsidiaries (continued) 18. Investments address same the registered have which at 31 Decembersubsidiaries 2019 (all of had the following The Group on the section Resources and Corporate within the Directors can which be found PLC, Group Goodas Energy report): this final page of Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 151 - - - - 3 - - - - 53 60 2018 (110) 2018 £000’s £000’s Financial statements 91 39 60 338 468 426 426 615 (42) 2019 2019 (153) (600) (324) £000's £000's 18.2 18.3 18.4 18.4 Notes Current assets Non current assets Current liabilities Group's share in equity - Non current liabilities Equity Goodwill Group's carrying amount of the investment Non-current assets Equity investment in associate Other interests in associates Non-current Liabilities LT Financial Liabilities Current Liabilities ST Financial Liabilities Notes to the Financial the Statements to Notes in Equity Associates 19. Interests Zap-Map, develops which ("NGCL"), Cars Ltd Green in Next interest a 12.9% acquired the Group In the year, charge identify plan routes, to (EV) drivers vehicle electric allowing platform point the UK's leading charging the UK's platform, the nextgreencar develops It also power. and their availability share checking points, car website. number one green public exchange. any on listed not in the UK, that is and operating incorporated entity, a private NGCL is in equity associates 19.1 Summary interests of 19.2 Investment in associate 19.2 Investment the board’s 33% of grants This the board. to a Director appointed in NGCL, the Group the investment partAs of NGCL is such, NGCL. As of activities the relevant direct to influence significant and constitutes rights voting financial statements. in the consolidated the equity method using an as associate for accounted Dormant generating asset generating asset generating asset generating asset generating asset generating asset generating asset Development of an energy Development of an energy Development of an energy Development of an Development of an energy Development of an Development of an energy Development of an Development of an energy Development of an Development of an energy Development of an 100% 100% 100% 100% 100% 100% 100% 100% UK UK UK UK UK UK UK UK
Good Energy Annual Report 2019 Report Annual Good Energy
Discount rate Discount period forecast the beyond flows cash extrapolate to used rates Growth Homegrown Energy Ltd Good Energy Development (No.30) Limited Good Energy Development Good Energy Development (No.24) Limited Good Energy Development Good Energy Development (No.25) Limited Good Energy Development Good Energy Development (No.26) Limited Good Energy Development Good Energy Development (No.27) Limited Good Energy Development Good Energy Development (No.28) Limited Good Energy Development (No.29) Limited 150 • • the Group, specific to the risks of assessment market the current represents rate – the discount rate Discount weighted the Group’s from derived is rate The discount money. of the time value consideration into taking and equity. in the pre-tax A rise debt both account into takes The WACC (WACC). capital of cost average in impairment. result 11.65% would to rate discount A decrease growth. expected of estimates prudent on management’s based are – rates estimates rate Growth trigger an indication not and would headroom, significant leave still 0% would to estimate rate in the growth impairment. of Key assumptions used in impairment calculations and sensitivity to changesassumptions in calculations and to sensitivity used in impairment assumptions Key assumptions: the following to sensitive most is in use value of The calculation Impairment between the relationship considers in December 2019. The Group test an impairment performed The Group when reviewing flows, cash of looking estimates forward as well as and its book capitalisation value, its market significantly was the Group of capitalisation at 31 December As 2019, the market impairment. of indicators for of that no indicators reviews these from concluded its equity. Management of higher than the book value existed. impairment been has Company balance in the Parent loan receivable the intercompany of amount The recoverable default. of and a probability flows cash of looking estimates forward of on an based assessment determined activity business no new (i.e. normalised business for allow to been adjusted have flows cash The projected cash applied to rate discount The pre-tax case. a prudent considering and included), are are or revenue costs a 3.0% growth using extrapolated period are the three-year beyond flows 8.0%, and is cash projections flow loan receivable, the intercompany of the value do exceed flows cash that the future concluded It was rate. required. is provision loss credit no expected and therefore *Entities indirectly owned by Good Energy Group PLC. PLC. Group Good Energy by owned indirectly *Entities the A subsidiary of financial statements. all been in the consolidated included have above The subsidiaries this around Further details during sold the year. - was Solar Limited Brynwhilach Park - Good Energy Group 5. per note disclosed are
18. Investments and Subsidiaries (continued) and Subsidiaries (continued) 18. Investments Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 153 - 146 2018 8,580 8,434 £000’s - - - - - 2018 £000’s Consolidated - 435 2019 9,941 9,506 £000’s Financial statements - - - - 99 60 39 171 (72) 2019 2018 £000's £000’s - - - - Parent Company Parent 2019 £000’s Total Renewable Obligation Certificates Emission Certificates Generation Development sites Fair value gain December 31 at consideration Contingent current Total non-current Total Financial liabilities at fair value through profit and loss Financial liabilities at initial recognition Contingent consideration £6,263,879 (2018: Obligation (ROCs) Certificates of Renewable were at 31 DecemberAs 2019 there place taken that had already generation for unissued that were amount in the above £5,199,973) included of The cost the financial year. the end of before sale for available not ROCs these were and therefore amounted sales' of and in 'cost included value, including the impairment an as expense, recognised inventories (2018: £10.9m). £12.5m to Notes to the Financial the Statements to Notes (continued) in Equity Associates 19. Interests financial19.4 Other liabilities 20. Inventories value. the fair to liabilities these equivalent is of The carrying amount consideration Contingent Contingent been has agreed. consideration a contingent in NGCL share of the purchase partAs of in July 2020 and stretching milestones product of on the satisfaction dependent payable is consideration £0.72m. is consideration in December The maximum 2021. possible deferred targets financial milestone - - 615 208 (57) (57) 2018 2018 £000’s £000’s £000’s Fair value Fair 615 615 347 (42) 2019 2019 (328) (328) £000's £000's £000's Carrying amount Carrying
Good Energy Annual Report 2019 Report Annual Good Energy
Secured convertible loan notes Secured convertible loan notes Financial assets at fair value through profit and loss Financial assets at fair value through Revenue from contracts with customers Revenue from contracts Loss for the year the for Loss loss comprehensive Total for the year Group's share of loss loan notes convertible Secured in loan notes convertible £800,000 secured the authorised held £600,000 of 31 December the Group 2019 At £200,000 has of tranche the final the loan. After of tranches down draw two the first of consists NGCL. This loan notes the secured of the entirety convert to the option will have 2020, the Group in Q1 down been drawn held shareholding. with the already 50.1% together of shareholding a total into 31 December If the 2021. until the Group of at the option convertible are loan notes convertible secured These on 30 June in arrears half yearly repayable becomes it Good Energy, by exercised not is loan note convertible annually 31 December interest 2026, accruing until years five the following over NGCL, and 31 December by at 8.0%. 19.3 Other interests in associate interests 19.3 Other The associate had no contingent liabilities or capitial commitments as at 31 December as 31 at 2019 or as liabilities or capitial commitments had no contingent The associate in the period. the associate paid by December No dividends 2018. were The fair value has been calculated using the discounted cash flow method over the contractual cashflows. the contractual over method flow cash the discounted using been has calculated value The fair 152
19. Interests in Equity Associates (continued) in Equity Associates 19. Interests Notes to the Financial the Statements to Notes Strategic Report Governance Report Financial Statements 155 - 215 406 Total 5,922 2018 £000's 2018 31,349 1,000 3,540 3,081 4,541 8,040 £000’s £000’s 10,501 15,662 15,662 53% Consolidated Consolidated 9,038 4,804 - £000's 95 >91 days 397 952 2019 2019 1,000 2,143 3,239 9,476 £000’s £000’s 10,032 13,667 13,667 Financial statements 275 19% days 1,453 61-90 £000's ------94 215 309 309 309 2018 2018 £000’s £000’s 8% Days past due 173 days 2,280 30-60 £000's ------94 Parent Company Parent Parent Company Parent 2019 2019 5,509 5,603 5,603 5,603 £000’s £000’s 5% 190 4,105 £000's <30 days
3% 480 £000's 14,473 Current - - - assets assets £000's Contract Contract
Security deposits Total Trade receivables Trade receivables 31 December 2018 Short-term bank deposits Cash at bank and in hand AA- AA A+ A B Expected credit loss rate BBB+ Total Estimated total gross Estimated total gross carrying amount at default Expected credit loss rate As part of the bank loan agreements, the lenders require a minimum cash balance to be held in separate be held in separate balance a minimum cash to require the lenders the bank part loanAs of agreements, on the assets in non-current accounts" deposit "restricted as disclosed balances these are accounts, reserve and Company the Parent both at bank Included within cash and in hand for Financial Position. of Statement Trust. Benefits Employee the Good Energy held by monies of in respect £340,038 (2018: £215,579) is the Group ratings credit external to reference by can be assessed equivalents and cash cash quality of The credit follows: as Notes to the Financial the Statements to Notes (continued) and Other Receivables 21. Trade 22. Cash and Cash Equivalents Cash and cash equivalents are all financial assets designated as financial assets at amortised cost. financial assets as designated all financial assets are Cash equivalents and cash All trade receivables are designated as financial assets measured at amortised at cost. measured financial assets as designated are receivables All trade Total 282 7,345 2018 £000's 33,724 4,087 £000’s 31,349 25,427 29,796 (5,922) 2018 4,535 3,576 5,922 £000’s (2,189) Consolidated 7,798 5,531 70.9% £000's >91 days >91 100 2019 2,951 £000’s 33,724 26,379 29,430 (7,345) 294 days 1,475 19.9% 61-90 61-90 £000's - 9 94 817 817 920 2018 £000’s Days past due past Days 313 2019 days 5,922 3,674 7,345 2,518 12.4% £000’s 30-60 30-60 £000's (2,251) - 8 8 35 55 98 Parent Company Parent 2019 £000’s 343 5.5% 6,230 £000's <30 days <30 864 5.5% £000's 15,703 Current - - - assets assets £000's Contract Contract
Good Energy Annual Report 2019 Report Annual Good Energy
Gross trade receivables and unbilled receivables Gross trade receivables Provision for impairment/non-payment of trade Provision for impairment/non-payment receivables and unbilled receivables Net trade receivables Other taxation Prepayments and other debtors Prepayments and Balance at 1 January 31 December31 2019 Trade receivables receivables Trade Movement on the provision for impairment and and impairment for provision the on Movement receivables trade of non-payment Total Increase in allowance for impairment/non-payment Expected credit loss rate Impairment/non-payment losses recognised December 31 at Balance Estimated total gross carrying amount at default Expected credit loss rate 154
21. Trade and Other Receivables 21. Trade Notes to the Financial the Statements to Notes Where a customer account is in credit this is included in contract liabilities (see note 29 Trade and 29 Trade liabilities note (see in contract included is this in credit is account a customer Where Other Payables). is uncertainty estimation to subject income accrued of that the amount identified has The Group £1.1m. approximately and non- impairment potential cover to an aside allowance set to in place a provision has The Group in receivables on trade been has calculated provision loss credit expected An receivables. trade of payment have who do not with customers are receivables Some with IFRS trade 9 Financial Instruments. accordance ratings. credit available externally below: shown is receivables trade of and non-payment impairment for on the provision The movements Strategic Report Governance Report Financial Statements 157 - 65 65 11 145 717 927 860 936 2018 2018 2018 1,863 £000’s £000’s £000’s Financial statements - - 46 927 903 181 976 (70) 2019 2019 2019 1,157 2,060 £000’s £000’s £000’s Consolidated At 1 January Charged to the Consolidated Statement of Charged to the Consolidated Comprehensive Income Elimination on disposal of subsidiaries Elimination on disposal Charged to equity At 31 December 31 At Deferred tax assets On short term timing differences Losses Interest deductible Total Deferred tax liabilities On accelerated capital allowances Notes to the Financial the Statements to Notes Taxation 25. Deferred made upfollows: is as taxation deferred for The provision 70 74 Total £000’s 13,478 13,548 13,622 6,649 6,649 6,649 £000’s Consolidated 2018 67 71 £000’s 12,652 12,719 12,790 Account Share Premium Premium Share - - - £000’s 3 3 826 829 832 Consolidated 2019 Consolidated £000’s Parent Company & Consolidated & Company Parent Share Capital Capital Share 54,361 49,724 fully paid paid fully Number of of Number 16,517,160 16,571,521 16,621,245 shares issued and and issued shares
Good Energy Annual Report 2019 Report Annual Good Energy
Property, plant and equipment Property, plant and Total assets Total Carrying value Carrying At 1 January 2018 Proceeds from shares issued At 31 December 2018 Proceeds from shares issued At 31 December 2019 156 24. Share Capital and Share Premium and Share Capital 24. Share
23. Disposal Groups Held for Sale Sale for Held 23. Disposal Groups Notes to the Financial Statements Financial the Statements to Notes The property, plant and equipments assets held for sale at 31 December 2018 relate to the subsidiary Good to at 31 December sale 2018 relate for held assets and equipments plant The property, the in sold was and company this completed was agreement the sale Solar Limited; Brynwhilach Park Energy The residential and a transformer. property residential project, development a wind to related also They year. the transformer for found not was a buyer marketing active despite however in the year, sold was property to ceased have year, this a £nil value to down been written have The assets' project. and wind development be actively to continues The transformer assets. fixed to transferred and sale, therefore held for as be classified appropriate. as recognised the impairment will reverse found is and sale, if a buyer for marketed vote to entitled are shares ordinary of Holders in the Company. shares of the only class are shares The ordinary the of Association of The Articles declared. dividends as and receive the Company of meetings at general rights. or on voting shares of the transfer on restrictions any contain do not Company in a £74,414 resulting of consideration total for 5p each of shares 49,724 ordinary issued In 2019, the Company dividend cash and interim full year in lieu of dividend scrip issues two to relates £71,928. This of premium share respectively). (2018: 35,845 and 18,516 shares respectively 34,641 and 15,083 shares of payments the of shares 293,270 (2018: 403,270) ordinary in trust holds Limited Corporation Trust Willmott Clarke Option Share Employee Group the Good Energy of beneficiaries and the future the present for Company in the Consolidated shown shares Trust Benefit equity the Employee as from deducted Scheme. are These 110,000 (2018: of disposed the Trust Changesin Equity. During the year of Statements Company and Parent nil (2018: nil) shares. and acquired exercised options of a result as 59,969) shares recommended has the Board However, (2018: 2.5p). proposed was 2.6p per share A final dividend of pandemic and prudent the ongoing COVID-19 final dividend considering year the full deferring management. cashflow Strategic Report Governance Report Financial Statements 159 - - - 2018 2018 6,263 3,595 2,668 £000’s £000’s 37,297 17,167 54,464 Consolidated Consolidated - 711 395 2019 2019 3,057 1,951 4,673 £000’s £000’s 35,314 16,757 56,744 Financial statements - - 411 108 2018 2018 7,534 3,528 3,595 £000’s £000’s 17,167 17,275 - 27 50 Parent Company Parent 33 Parent Company Parent 395 2019 2019 7,802 7,330 £000’s £000’s 16,757 16,790 Total Lease liabilities Loans from Group companies Loans from Group Non current: Bank and other borrowings Bond Lease liabilities Total Current: Bank and other borrowings Bond The Group has undrawn bank overdraft facilities of £10,000,000 (2018 : £10,000,000) as at 31 December 2019. at 31 December (2018 : £10,000,000) as £10,000,000 2019. of facilities bank overdraft undrawn has The Group Group and other Gas Limited Good Energy Limited, Good Energy from guarantees by secured is facility This entities. Company’s the Parent to the bank 31 December loans relate 2019, £5,449,283 (2018: £6,193,641) of At that on debenture a mortgage by and secured Delabole is Wind Farm Limited subsidiary, Good Energy assets and future all current over and floating charge a fixed 16 January 2010 incorporating dated company company. this of the wind farm arising from flows cash future from will be repaid that subsidiary. The facility of with phase, the repayment to the build phase from On 7 January transferred 2011, the loan balance was 15 years. bi-annually scheduled over and interest capital of repayments rate fixed to a floating rate into entered Delabole Wind Farm Limited Good Energy the facility partAs of the same have one another, of at the same time and in contemplation into entered were They swap. interest that and the fact circumstances these Given and the same risk amortise concurrently. to relate counter-party, that separately the transactions structuring purpose for business need or substantive no economic is there rate one fixed as treated are instruments these been transaction, in a single accomplished have also not could 7.15%. of at an annual rate payable is interest rate The fixed loan instrument. Notes to the Financial the Statements to Notes andOther Financial Liabilities 26. Borrowings - - 70 (65) (46) Total (903) (145) (717) (927) £000’s ------11 11 (11) £000’s Interest Interest deductible deductible - - - - 860 116 976 1,811 (951) Losses £000’s - - - 7 65 116 181 123 (65) timing timing £000’s Short-term Short-term differences - - - 70 216 (267) £000’s capital capital (2,060) (1,863) (2,079) allowances Accelerated Accelerated
Good Energy Annual Report 2019 Report Annual Good Energy
(Charged) to equity Credited/(charged) to the income Credited/(charged) statement Elimination on disposal of subsidiaries At 31 December 2018 December 31 At Credited/(charged) to the income statement Elimination on disposal of subsidiaries At 31 December 2019 December 31 At At 1 January 2018 January 1 At Deferred tax assets/(liabilities) Charged to equity 158
25. Deferred Taxation (continued) Taxation 25. Deferred Notes to the Financial the Statements to Notes Deferred tax on losses incurred pre 1 April 2017 has only been recognised to the extent that the relevant that the relevant the extent to only been 2017 has 1 April recognised pre incurred on losses tax Deferred Should deferred offset. for liabilities available tax deferred sufficient have the losses companies incurred which £25,361. by increase would tax after and profit asset tax the deferred losses, on all such be recognised tax Strategic Report Governance Report Financial Statements 161 2018 value 6,352 £000s 34,990 20,409 Total Total 3,057 6,263 £000’s £000’s 60,727 Carrying 59,801 28,841 29,491 25,623 27,253 Fair 2018 value 6,378 £000s - - - - 35,463 20,353 711 lease 5,384 3,292 1,381 Lease Lease £000’s £000’s Finance Finance liabilities Financial statements 2019 value 5,546 £000s 33,883 16,785 Carrying Carrying - - 395 Bond Bond 3,595 £000’s £000’s 20,762 17,152 16,757 17,167 Fair 2019 value 5,565 £000s 34,683 17,309 other other other other 9,115 8,456 1,951 2,668 £000’s £000’s 39,965 37,265 28,841 26,199 Bank and and Bank Bank and Bank and borrowings borrowings Total Total Due more than 5 years Due more than 5 years Due between 1 and 5 years Due between 1 and Due between 1 and 5 years 31 December 2019 Due less than 1 year Consolidated Consolidated 31 December 2018 Due less than 1 year Good Energy Delabole Wind farm Ltd Good Energy Generation Assets No. 1 Limited Corporate bond in the inherent risk rate the interest account into taking been calculated have borrowings of values The fair in costs) issue (excluding borrowings of and carrying values estimates value loans and the bond. The fair at 31 Decemberplace 2019 are: Notes to the Financial the Statements to Notes andOther Financial Liabilities (continued) 26. Borrowings financial liabilities held at amortised cost. other as designated are Borrowings Total Total 7,802 7,534 £000’s £000’s 16,790 24,592 17,275 24,809 33 60 27 58 65 123 lease Lease Lease £000’s £000’s Finance Finance liabilities (restated*) - 50 50 50 395 345 other other other other £000’s £000’s Bank and and Bank Bank and Bank and borrowings borrowings (restated*) 395 Bond Bond 3,595 £000’s £000’s 17,152 16,757 17,167 20,762 - - loan loan 7,330 Inter- 7,330 3,529 3,529 Inter- £000’s £000’s company company
Good Energy Annual Report 2019 Report Annual Good Energy
Total Due less than 1 year 31 December 2019 Due between 1 and 5 years Parent Company Parent Parent Company Parent Total Due less than 1 year 31 December 2018 Due between 1 and 5 years
26. Borrowings and Other Financial Liabilities (continued) andOther Financial Liabilities (continued) 26. Borrowings Company’s the Parent to bank the 31 December loans relate of (2018: £34,990,240) 2019, £33,882,698 At debenture a mortgage by The loan secured is No. 1 Limited. Assets Generation subsidiary, Good Energy of shares the over charges December 17 incorporating 2014, and dated its subsidiaries on that company the arising from flows cash future from will be repaid The facility its subsidiaries. of and those that company 18 a period of over quarterly scheduled and interest capital of with repayments that company of subsidiaries principal balance is at 6.85% and the outstanding payable is 17 December commencing 2014. Interest years (2018: £2,754,299 finance were in raising incurred 3%. Costs exceeds if annual RPI inflation partially exposed the loan. of the life being amortised over £2,754,299) and are Notes to the Financial the Statements to Notes *The 2018 Parent Company bank and other borrowings and finance leases amounts have been restated as as been restated have and amounts finance leases borrowings bank and Company other *The 2018 Parent has This and versa. vice borrowings bank as and other presented incorrectly were values the finance leases above. been corrected 160 Strategic Report Governance Report Financial Statements 163 - 802 2018 1,512 3,522 £000's 31,028 36,864 380 166 546 532 (14) 2018 £000’s Consolidated Financial statements 18 2019 1,297 1,277 4,144 £000's 28,751 35,487 414 183 597 584 (13) 2019 £000’s - - - 144 196 340 2018 £000's Parent Company Parent - - - 68 180 248 2019 £000's Social security and other taxes Social security and Other payables Accruals Trade payables Consolidated Final dividend for prior year of 2.50p per share Final dividend for prior year of 2.50p (2018: 2.30p) Contract liabilities Total Interim dividend for current year of 1.10p per share (2018: 1.00p) Sub-total Dividends waived Total Notes to the Financial the Statements to Notes and Other Payables 29. Trade 30. Dividends Paid at the in issue shares on the number (based of in the year shareholders to distributions as recognised Amounts follows: as are date) record financial liabilities held at other as designated are payables and accruals other payables, Trade amortised cost. in 2019. revenue as recognised were above liabilities shown in 2018 as the contract All of Employee Group the Good Energy held by on shares accrue dividends that would represent Dividends waived the Trust. held by not they were Trust Benefits recommended has the Board 2020. However, on 16 March proposed was 2.60p per share A final dividend of cashflow pandemic and prudent the ongoing COVID-19 final dividend considering year the full deferring management. dividends scrip of paid in the form £74,414 (2018: £69,621) was year, the for dividend distributed Of the total in cash. £510,398 (2018: £461,714) settled with the balance of 711 2019 2,346 4,673 £000's 52,071 59,801 - 22 174 2018 1,446 1,250 £000s 31 December 31 December 470 384 2,805 (434) Other £000's (2,285) - 22 - - 2019 1,294 1,446 (174) £000s (769) £000's (6,311) (7,080) Cash flows - - 685 5,684 4,999 £000's obligations Recognition Recognition of right of use use of right of 411 108 2019 5,852 £000's 54,356 60,727 1 January 1 January
Good Energy Annual Report 2019 Report Annual Good Energy
31 December Charged to profit or loss Current interest-bearing loans and Current interest-bearing items listed borrowings (excluding below) 1 January Additions to provisions Disposals Non-current interest-bearing loans Non-current interest-bearing items listed and borrowings (excluding below) Current lease obligations Non-current lease obligations Total liabilities from financing activities 162 A provision has been recognised for decommissioning costs associated with wind farms and solar parks owned and solar owned parks with wind farms associated costs decommissioning for been has recognised A provision provision. the decommissioning to wholly relates below the provision of The value the Group. by and operated sites. generating the respective turbines for on MWh or number based is of provision The decommissioning 28. Provisions for Liabilities for 28. Provisions
27. Changes in Liabilities Arising from Financing Activities 27. Changes from Liabilities in Arising Notes to the Financial the Statements to Notes The 'Other' column includes the effect of reclassification of the non-current portion of interest-bearing loans interest-bearing portion of the non-current of reclassification of The 'Other' the effect column includes of time, and the effect of the passage due to current to including obligations under leases and borrowings, paid interest classifies The Group loans and borrowings. on interest-bearing paid interest yet but not accrued activities. operating from flows cash as Strategic Report Governance Report Financial Statements 165 25 (7) (15) 2018 1,321 1,318 £000’s (Restated*) consideration Total exercise Total - 2019 1,022 1,022 1,321 (177) (122) £000’s Financial statements (£) 2018 0.81 0.81 0.04 0.04 0.26 0.26 0.05 0.05 0.96 0.96 (Restated*) exercise price exercise - (£) 0.81 0.81 0.67 0.67 1.11 1.11 0.81 0.81 Weighted average Weighted 2019 2018 505,168 (58,369) 1,627,271 1,368,347 (Number) (187,875) - 2019 Number of options of Number (Number) 1,627,271 1,627,271 (261,978) (110,000) 1,255,293 1,255,293 Outstanding at the end of year Cancelled/surrendered Exercised Granted Outstanding at beginning of year overstated incorrectly were forward brought options share the number of of the correction *In the prior year, and the opening been has recalculated This adjusted. not was consideration exercise 40,000 and the total by £1,318,243. of figure the correct £1,681,000 to from been has corrected consideration exercise total approximately representing (2018: 403,270) shares 293,270 granted, partially the options fulfil to In order Trust Willmott Clarke and been held by issued already have outstanding the options 23% (2018: 25%) of been Dividends have Trust. Benefits Employee Group the Good Energy of the Trustee as Limited Corporation shares. on these waived Notes to the Financial the Statements to Notes Payments 32. Share-Based Company the Parent performance, their incentivise and to employees key the servicesof retain to In order the Group of employees Scheme under certain which Option Share Employee the Good Energy operates of options these of respect in Costs dates. at future 5p shares Ordinary acquire to options granted are at 31 Income. As Comprehensive of Statement in the Consolidated recognised are £81,271 (2018: £357,633) had been issued: options December 2019, the following ------346 358 858 500 2018 4,415 2,682 4,345 2,948 1,617 2,304 (687) £000’s 18,069 Consolidated - - - 81 42 366 487 321 (15) (72) 2019 8,146 4,244 3,467 1,435 1,258 (937) £000’s (1,198) (1,012) ------6 783 358 500 150 305 305 2018 (743) £000’s (3,641) (5,000) - - - - 3 42 Parent Company Parent 822 194 (92) (15) (72) 2019 1,011 2,102 (765) £000’s (2,025) (3,500) (1,755) (1,755) net
Good Energy Annual Report 2019 Report Annual Good Energy
Cash (outflow)/inflow from operations from (outflow)/inflow Cash Trade and other payables Changes in working capital (excluding the effects effects the capital (excluding working in Changes on differences exchange and acquisition of consolidation) Inventories Trade and other receivables Finance costs/(income) - Dividend income from subsidiaries Share based payments Share of loss of associate Provision against investments in and loans Provision against investments in and to subsidiaries Net gain on financial assets at FVTPL Amortisation Tidal Lagoon impairment Depreciation Adjustments for: Adjustments Gain on assets disposals Fair value adjustment of contingent consideration Fair value adjustment of contingent Profit/(loss) before income tax Loss before tax from discontinuing operations Loss before tax from Profit/(loss) before tax from continuing operations Profit/(loss) before
31. Cash Generated from Operations Operations from 31. Cash Generated activities: operating by provided cash net to income net of Reconciliation Notes to the Financial the Statements to Notes 164 Strategic Report Governance Report Financial Statements 167 Financial statements Notes to the Financial the Statements to Notes Transactions Party 34. Related the for with Martin Edwards an arm’s agreement length into entered During the prior period, the Group and technologies energy renewable emerging of the evaluation to services related consultancy of provision either by on 1 June commenced 2018 and can beterminated and services. The agreement products related services £18,000. Martin is Edwards the consultancy of annual value The contracted notice. party on 1 months PLC. Group Good Energy of director and a former Limited, Good Energy of Director a Non-Executive is supplied electricity of £21,791 in respect the Group owed Ltd Power December at 31st 2019, Tidal Lagoon As and on arm’s its business of course in the ordinary the Group supplied by was The electricity its office. head to Davenport. Juliet the husband of Mark is Shorrock, Ltd Power Tidal Lagoon The CEO of and terms. length rates provision. loss credit expected the Group's through for been has provided debt this £20,488 of Events 35. Subsequent any seen not has the Group date, became To a global issue. COVID-19 of 2020 the outbreak In March closely the situation monitor to it continues however outbreak, the COVID-19 from financial impact significant and months. weeks the coming throughout going concern a detailed undertaken have the Group implications, wide-ranging the outbreak’s of In light flows on cash with a particular focus the period affected, throughout operations continued ensure to review plans. continuity and business but uncertain, are lockdown after on the economy and the impact closure period this of of The extent as rates collection and cash usage energy on customer impacts indicates scenario forecasting downside the potential pandemic. the Covid-19 Despite of development prior to expectations the Board’s to compared property, intangibles, goodwill, of other an impairment expect currently do not the Directors on results, impact was test when an impairment headroom significant was there as assets, use of and right and equipment plant end. at the year undertaken outbreak the ongoing COVID-19 Due to 2.6p per share. of the year a final dividend for proposed The Directors in flexibility more provide dividend, this to of the payment defer to proposed subsequently have the Directors on an situation COVID-19 the monitor to will continue the pandemic. The Directors to response the Group’s the final dividend. of the payment andongoing basis consider Cars Green Next to granted loan notes convertible the secured of tranche 2020, the third On the 30th March convert to the option has time, the Group this At down. drawn was investment the Zap-map part as of Ltd in a majority stake holding will provide existing with the Groups combined which shares into loanthese notes No decision date. this from Cars Ltd Green Next of control gained effective the Group such, As the business. equity. into the loan notes convert been made to yet has financial these signing of of the date up to developments that the latest concluded have The Directors date, at the reporting existing about the circumstances further information provided not have statements be a consequence. made as to financial statements these to adjustments any expect do not therefore cast that would uncertainty a material identified have the Directors review, the detailed of a result As a is that there assessed but have a going concern, as continue ability to on the Group’s doubt significant as its commitments and meet in operation continue will be able to that the Group expectation reasonable in full per note can be found review concern going period. the going concern The detailed due over fall they 2.3, on page 107. 87 24 22 15 505 117 100 200 189 2018 189* 179* 1,627 (thousands) Share options options Share - - 87 10 50 22 424 200 169 104 189 2019 1,255 - 0.05 0.05 0.05 2.27 2.25 2.29 1.25 1.15 0.50 0.75 share options share Exercise price in £ per £ in price Exercise 2031 2030 2029 2028 2028 2027 2027 2026 2025 2025 2019 Expiry year Expiry
Good Energy Annual Report 2019 Report Annual Good Energy
2018-2021 2017-2020 2016-2019 2015-2018 2015-2018 2015-2017 2015-2017 2013-2016 2012-2015 Grant-vest 2012-2015 2004-2007 incorrectly were tranches two these for options share the number these of accounts *in the prior year in the shares number of the actual reflect to been corrected 162,000 and have as 206,000. These reported at that time. tranches year. the current in granted options no share were There Directors to granted options share for in the Income Statement recognised expense the total 10 for See note and employees. 166 33. Pensions held separately are the scheme of The assets scheme. pension contribution a defined operates The Group contributions represents fund. The pension cost administered in an independently the Group of those from £528,781 (2018: £458,538). to the fund and amounted to the Group by payable and the financial year the fund at the end of to payable £41,250 (2018: £57,630) were totalling Contributions payables. in other included are and in line with the Group’s or contingent no further liability pension has either realised The Group fund. within a suitable invested are contributions all position employer environmental
32. Share-Based Payments (continued) Payments 32. Share-Based the year at the end of outstanding options 2028. Share November up to dates at various expire The options price: and exercise date expiry the following have Notes to the Financial the Statements to Notes Notes to the Financial Statements Directors and Corporate Resources 36. Subsidiary Undertakings Exempt from Audit Directors Financial Advisors Good Energy Group PLC has provided the necessary parental guarantees under Section 479A of the Companies Act 2006, to enable the following companies exemption from audit: William Whitehorn (Non-Executive Investec Bank plc Chairman) 30 Gresham Street Directly held subsidiaries: Juliet Davenport (Chief Executive) London, EC2V 7QP Good Energy Cedar Windfarm Limited Good Energy Development (No.12) Limited Emma Tinker (Non-Executive Director) Good Energy Lanyon Solar Park (011) Limited Good Energy Development (No.14) Limited Timothy Jones (Non-Executive Director) Bankers Good Energy Mapperton Solar Park (007) Limited Good Energy Development (No.15) Limited Nemone Wynn-Evans (Non-Executive Good Energy Tidal Limited Good Energy Development (No.16) Limited Director) Lloyds Bank Llangyfelach Community Solar Farm C.I.C Good Energy Development (No.17) Limited PO Box 112, Canons House, Worminster Down Somerset Community Solar Farm C.I.C Good Energy Development (No.20) Limited Rupert Sanderson (Chief Financial Officer) Good Energy Development (No.1) Limited Good Energy Development (No.21) Limited Canons Way Bristol BS99 7LB Good Energy Development (No.3) Limited Good Energy Development (No.22) Limited Company Secretary Good Energy Development (No.4) Limited Good Energy Development (No.24) Limited Good Energy Development (No.5) Limited Good Energy Development (No.25) Limited EVERSECRETARY LIMITED Good Energy Development (No.6) Limited Good Energy Development (No.26) Limited The Co-operative Bank PLC Eversheds House PO Box 101, 1 Balloon Street Good Energy Development (No.7) Limited Good Energy Development (No.27) Limited 70 Great Bridgewater Street Good Energy Development (No.8) Limited Good Energy Development (No.28) Limited Manchester M60 4EP Good Energy Development (No.9) Limited Good Energy Development (No.29) Limited Manchester M1 5ES Good Energy Development (No.10) Limited Good Energy Development (No.30) Limited Legal Advisors Company Number Indirectly held subsidiaries: Norton Rose LLP 04000623 Good Energy Carloggas Solar Park (009) Limited 3 More London, Riverside Good Energy Creathorne Farm Solar Park (003) Limited London, SE1 2AQ Good Energy Cross Road Plantation Solar Park (028) Limited Principal Place of Business and Registered Good Energy Hampole Windfarm Limited Office Good Energy Lower End Farm Solar Park (026) Limited Registrars Good Energy Rook Wood Solar Park (057) Limited Monkton Reach Computershare Investor Services PLC Good Energy Woolbridge Solar Park (010) Limited. Monkton Hill, Chippenham The Pavilions, Bridgwater Road Wiltshire SN15 1EE Bristol BS99 6ZY 37. Generation Assets: Technical Data Independent Auditors Wind Farms Solar Farms (continued) EY Hampole, South Yorkshire Creathorne, Cornwall The Paragon, 32 Counterslip Turbine manufacturer: Senvion Solar modules: Yingli Bristol BS1 6BX No. of turbines: 4 Nominal capacity DC: 1,841 kWp Installed capacity: 8.2MW Turbine power output: 2.05 MW Rook Wood, Wiltshire Solar modules: ReneSola Delabole, Cornwall Nominal capacity DC: 4,981 kWp Turbine manufacturer: Enercon No. of turbines: 4 Lower End, Wiltshire Installed capacity: 9.2MW Solar modules: Jinko Solar Turbine power output: 2.3 MW Nominal capacity DC: 4,999 kWp
Solar Farms Crossroads, Dorset Solar modules: Jinko Solar Woolbridge, Dorset Nominal capacity DC: 4,999 kWp Solar modules: Yingli Nominal capacity DC: 4,996 kWp Carloggas, Cornwall Solar modules: ReneSola Nominal capacity DC: 8,304 kWp
168 Good Energy Annual Report 2019 Annual Report & Accounts 2019
Good Energy Group PLC Monkton Reach Monkton Hill Chippenham SN15 1EE group.goodenergy.co.uk