Solar woes take the shine off Entu
ENTU, the listed home improvements and energy efficiency specialist has described its first 12 months as a public company as a “year of mixed fortunes”.
The Manchester-based company said it had been hit hard by a change in the Government’s approach to domestic solar power as feed-in-tarifs were cut.
This has forced Entu to withdraw from the market completely, a move that will dent its profitability in the near future.
Chief executive Ian Blackhurst explained:“The closure of the solar business and the required investment in infrastructure has undoubtedly affected the profit potential of the group over the next couple of years.”
He said the company, which listed on AIM in October 2014, was now taking a more prudent view on the outcome for the year to October 2016, and consequentially results are expected to be “marginally below” the figures it published today for the year to October 2015.
The results show revenue from continuing operations (not including solar) increased from £92.3m to £99m. Including discontinued operations revnue was £116.9m, compared with £119m the year before.
Group operating profit (before exceptional items) from continuing operations was down 13% to £8m. Discontinued operations, solar and Norwood (a small interiors business sold during the period), in aggregate contributed a loss of £3.8m.
Outlining the turbulence the company faced in solar, Blackhurst said: “At the beginning of the year, we saw significant disruption in our solar business caused by the poaching of part of our sales team by a competitor.
” A great deal of management time and resources were devoted to recruitment, training and managing this business in order to ensure that the customer experience was affected as little as possible by this disruption.
“The group was then hit by the Government’s decision to slash feed-in tariffs which rendered the solar panel product dramatically less attractive to consumers. Faced with an obvious collapse of customer demand, the group took a prompt decision to cease selling its solar panel products to the consumer… Many of the sales personnel have been retrained in other parts of the group’s activities in order to minimise job losses and redundancy costs”
Looking ahead, Blackhurst said the company was debt free and still hungry to grow: “We have market leading positions, a diversified product portfolio and an improving understanding of the market in which we operate. We look forward to the future with confidence in our ability to deliver growth and improved shareholder returns over the medium term.”
