Utilita Energy profit to fall as sales slashed by £700m
The owner of Utilita Energy has warned its profit will fall because of an “increasing obligation to support customers with higher bills”.
Luxion Group, which owns the Eastleigh-based supplier, added that its resources “continue to be stretched” despite its pre-tax profit increasing from £31.2m to £43m in the year to 31 March, 2024.
Utilita Energy itself has booked a pre-tax profit of £50m for the same financial year, up from £32.2m.
However, both suffered a sharp decline in their turnovers from £2.13bn to £1.41bn, according to newly-filed accounts with Companies House.
Utilita Energy battling bad debt costs
A statement signed off by the board said: “As prices have fallen, consumers responded with a small increase in consumption, with the overall decline in revenue linked to the significant fall in wholesale prices.”
The company added: “Following the regulator’s suspension of mode change and warrants for the purpose of debt collection the whole industry has seen a significant increase in bad debt.
“Despite Utilita’s prepay focus we were not immune from Ofgem’s action with bad debt remaining a significant admin cost to the business.
“The group continues to work the regulator and government on addressing this industry wide debt recovery issue.”
On its performance since the start of its current financial year, the owner of Utilita Energy said: “The continued volatility driven by geopolitical uncertainty in the spot and forward prices of energy increases Utilita’s liquidity risk.
“Price risk continues to be mitigated through the forward purchase of energy in line with the regulator’s price cap methodology.”
Utilita Energy was founded in 2003 by Bill Bullen, who still leads the company today.
Luxion Group became the new name of the company’s owner in April 2024.
Later that year, it was reported that Utilita Energy was seeking to raise an extra £50m.