31 January 2024
Inspired PLC
("Inspired" or the "Group")
Full year trading update and notice of
results
Strong Group trading
performance and confident outlook
Inspired (AIM: INSE),
a leading technology enabled service provider
supporting businesses in their drive to reduce energy consumption,
deliver net-zero, control energy costs and manage their response to
climate change, announces a trading update
for the financial year ended 31 December 2023 ("FY23").
The Group delivered a strong trading
performance, with adjusted EBITDA up 19%, in line with market
expectations1. The Group achieved strong trading particularly in the second
half with all trading divisions contributing revenue growth and
each delivering solid strategic progress.
Financial highlights
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Group revenue is expected to be
c.11% ahead of FY22, at c.£98.7m. The Group traded strongly in FY23
with a shift in product mix within the Optimisation Division
driving a higher margin contribution from the revenue generated in
that division.
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Group Adjusted EBITDA* grew 19% to
£25.0m (2022: £21.0m) in line with market expectations1.
Adjusted EBITDA Margin increased to c.25% (2022: c.24%) as a result
of the improved margin within the Optimisation Division.
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Group Adjusted profit before
tax**("PBT") is expected to be in line with market
expectations1. The growth in Adjusted EBITDA was
partially offset by increased finance costs, reflecting higher
interest rates on borrowings.
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As anticipated, the Group's
Optimisation division saw very high levels of project activity in
H2 2023, with the associated investment in working capital reducing
Cash Conversion*** in FY23 to c.70%. In January the working capital
investment unwound, and it is expected that Cash Conversion for the
12 months to 31 January 2024 will be in excess of 90%.
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Net debt at 31 December 2023 was
c.£48.7m (H1 2023: £49.1m). With strong cash generation in January
2024, net debt at 31 January 2024 is expected to be
c.£45.0m.
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Divisional highlights
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Assurance Services continued to
see momentum in new business generation, with improved churn rates,
higher retention rates and margins broadly in line with H1
2023.
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Optimisation Services experienced strong demand in H2 2023, delivering c.13% revenue
growth in FY23. This was driven by increasing levels of repeatable
demand from existing clients of the division alongside growing
levels of cross selling from the Assurance Division.
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ESG
Services achieved c.100% revenue
growth in FY23 and made an Adjusted EBITDA contribution to the
Group.
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Software Services revenue grew
by c.15% in the year whilst maintaining Adjusted EBITDA margins in
excess of 70%.
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Current trading and outlook
The secular demand from companies to
reduce energy consumption, drive efficiencies and report against
progress remains unchanged and underpins demand for the Group's
services. This has been reflected in the continued progress of the
ESG Division and the Optimisation Division, the latter of which
experienced a strong Q4 2023.
The Group started Q1 2024 strongly
with substantial cash generation as the working capital investment
in Q4 2023 unwound and is confident in the outlook for FY24.
This momentum is expected to
continue, giving the Board confidence in its previously stated
aspiration to maintain double-digit organic growth and, by FY27,
double Adjusted EBITDA organically from that achieved in FY22. The
associated cash generation will also lead to a deleveraging of the
Group in relative and absolute terms.
Commenting on the period, Mark Dickinson, CEO of Inspired,
said: "The
Group delivered a solid operational and financial performance
during the year, with Adjusted EBITDA and PBT in line with market
expectations, with a continued focus on cash generation.
"Managing energy costs and ESG have
now become firmly embedded as operationally and commercially
critical for most businesses. This is creating sustained and
increasing demand for Inspired's differentiated products and
services. We are better placed than ever as a full-service provider
and are confident of future success and in our outlook for FY24 on
the back of momentum in FY23."
Notice of Results
Inspired expects to announce its
audited full year results to 31 December 2023 on 26 March
2024.
* Adjusted EBITDA is
earnings before interest, taxation, depreciation and amortisation,
excluding exceptional non-recurring items and share-based
payments.
**Adjusted profit before tax is earnings before tax,
amortisation of intangible assets (excluding internally generated
amortisation related to computer software and customer databases),
exceptional items, share-based payments, the change in fair value
of contingent consideration and foreign exchange
gains/(losses).
***Cash Conversion is cash generated from operations, as
adjusted to exclude exceptional non-recurring items, as a
percentage of Adjusted EBITDA.
1
The Company considers that consensus market expectations for
Adjusted EBITDA is £25.0m and Adjusted PBT £16.2m for
FY23.
Enquiries please contact:
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Inspired PLC
Mark Dickinson (Chief Executive
Officer)
Paul Connor (Chief Financial
Officer)
David Cockshott (Chief Commercial
Officer)
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www.inspiredplc.co.uk
+44 (0) 1772 689250
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Shore Capital (Nominated Adviser and Joint
Broker)
Patrick Castle
James Thomas
Rachel Goldstein
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+44 (0) 20 7408
4090
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Liberum (Joint Broker)
Edward Mansfield
Satbir Kler
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+44 (0) 20 7418 8900
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Alma Strategic
Communications
Justine James
Hannah Campbell
Will Ellis Hancock
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+44 (0) 20 3405 0205
+44 (0) 7525 324431
inspired@almastrategic.com
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Notes to editors
Inspired PLC is a leading B2B
technology enabled service provider delivering solutions that
enable corporate businesses to transition to net-zero carbon and
manage their response to climate change in the UK and
Ireland.
Founded in 2000, Inspired operates
four divisions: Assurance Services, Optimisation Services, ESG
Services and Software Services, providing expert energy advisory
and sustainability services to over 3,500 businesses who typically
spend more than £100,000 on energy and water per year. The Group's
four divisions work together to help corporate businesses manage
all aspects of their energy and sustainability programme through
the lens of what the Group refers to as the 4Cs of Cost,
Consumption, Compliance and Carbon.
Inspired has been recognised with
the London Stock Exchange's Green Economy market since 2020 for its
environmental and strategic advice, service, and support to
customers and is also ranked as the UK's leading advisor by the
independent energy market intelligence consultancy, Cornwall
Insight.