Flowgroup recapitalises as it focuses on consumer business

Josh White Sharecast | 19 Jun, 2017 11:20 | | |

gas, flame, utilities, power, energy, flame



17:18 23/10/17
  • 12,221.38
  • 0.76%92.77
  • Max: 12,221.38
  • Min: 12,065.81
  • Volume: 0
  • MM 200 : n/a
17:19 23/10/17
  • 1,020.35
  • 0.00%0.02
  • Max: 1,022.54
  • Min: 1,019.90
  • Volume: 0
  • MM 200 : n/a
17:19 23/10/17

Residential gas and electricity supplier Flowgroup announced the successful re-capitalisation of the company in a shareholder update on Monday.

The AIM-traded firm said it completed a financing on 14 June, which raised £25.34m net of expenses.

That gross fundraising consisted of a £9.5m placing, £0.63m from the primary bid offer, £0.89m from the open offer, and £15.5m in convertible unsecured loan notes.

The company has 1,423,583,793 ordinary shares of 0.1p each in issue and admitted to trading, the board confirmed.

Flowgroup’s board said its primary focus was now on continuing to develop and grow Flow Energy, the group's residential gas and electricity supply business.

The proceeds from the recent fundraising would enable the group to pay off existing liabilities, focus on accelerated growth in Flow Energy, and build a sustainable and profitable energy business.

Its goal was to grow Flow Energy into a leading mid-tier energy supplier from its current base of more than 250,000 customer fuel accounts.

The restructuring and “rightsizing” of Flow Products had also commenced, necessitating “significant” cost cutting including a consultation process with relevant employees, Flowgroup’s board added.

It budgeted a small, but defined, cash allocation to support the business short-term, and was undertaking a strategic review to ensure it ceased to be an ongoing cash drain on the energy supply business which was now the main focus of the group.

It remained the board's intention to maximise the value of Flow Products for the benefit of all stakeholders.

Whilst customer growth was a key target for the company, the directors said they intended for that growth to be managed in a way that delivered long term profitability and shareholder value.

To that end, the company would update shareholders regularly on customer numbers and certain key performance indicators, the board pledged.

“Flow Energy is well placed to deliver significant revenue and customer growth as we build upon the firm foundation of our substantial retail platform,” said group chief executive Tony Stiff.

“The newly simplified business structure and re-capitalisation set the stage for management to intensely focus on our core energy business where we believe high returns on invested capital are achievable.

“We are committed to growing Flow Energy and building shareholder value. We look forward to updating shareholders on our progress.”

More news

17:23 London close: Stocks end little changed despite weak reading on industry

London stocks reversed an earlier small loss to trade slightly higher by the close of trading on Monday despite resilience in the pound against the greenback even after the release of weaker-than-expected data on industrial trends.

16:30 Tuesday preview: Results from Anglo American, Bunzl, St James's Place and Whitbread

Tuesday remains quiet for macroeconomic news but the week's major corporate results kick in with updates from Anglo American, Bunzl, St James's Place and Whitbread.

15:50 FTSE 250 movers: Spire surges as it rejects Mediclinic offer; IWG hit by downgrade

London’s FTSE 250 was down 0.2% to 20,109.57 in afternoon trade on Monday.

15:47 FTSE 100 movers: GKN rallies but Mediclinic drops as Spire rejects offer

London’s FTSE 100 was up 0.1% to 7,529.60 in afternoon trade on Monday.

15:33 US open: Stocks pause at record highs

Wall Street was trading on a mixed note in the early going on Monday, albeit after record closes during the previous session with sentiment underpinned by optimism over Trump’s tax plans as investors look ahead to more earnings releases.

15:04 Smith & Nephew acquires 'game changing' shoulder surgery technology

Smith & Nephew has agreed to snap up a US developer of a "game changing" surgical technology that helps speed the healing process in rotator cuff shoulder injuries.

15:11 FCA still investigating RBS's GRG over SME issues

The City watchdog has published an interim report into the treatment by Royal Bank of Scotland small business clients, though it said the bank remained under investigation over some unnamed matters that could see further regulatory action.

14:02 Asia report: Japan leads rise as Abe consolidates strength in election

Japanese equities led Asia-Pacific markets mostly higher on Monday as markets welcomed an election win for Shinzo Abe.

13:28 UK household pressures ease, rate hike expectations rise - IHS Markit

Financial pressures eased for UK households in October while rate hike expectations rose, according to the latest survey from IHS/Markit.

13:11 Europe midday: Stocks turn higher as German exporters balance Catalonia angst

European stocks were picking up a little steam after a listless Monday morning, as slippage in the euro benefitted exporters but Spain's issues with Catalonia continued to cause some anxiety.