OVO Group has said its 2019 results are “in line” with its financial plan despite recording a loss of £106 million for the year.
After announcing the sale of a 20% stake to Mitsubishi in February, OVO said 2019 marked a record year of investment for the company as it targeted international expansion and went on to acquire SSE’s energy supply division.
While the SSE deal took OVO Group’s customer numbers up from 1.5 million to nearly 5 million when the transaction closed in 2020, its OVO Energy subsidiary said customer numbers in 2019 were hit as a result of increased price competition and record levels of switching in the retail supply market.
Driven by the sale of gas and electricity, OVO Group posted revenue of £1.4 billion, up 40% year-on-year. However, revenue from the installation of smart meters was down 32%. Gross profit for the year increased by 56% to reach £146 million.
An OVO spokesperson said: “The energy industry is going through enormous change, driven by new technology, digitisation and the commitment to reach net zero by 2050. We have been investing for growth in market-leading technology to support the transformational growth of the business in the UK and internationally.”
OVO’s results statement also provides insights into subsequent events since the reporting period, with the company warning that COVID-19 will hit its 2020 performance due to some sales channels within the business experiencing “significant interruption” as a result of lockdowns. The most notable of these is said to be the impact on the firm’s ability to continue the rollout of smart meters.
The company also said it anticipates the need to recognise additional bad debt charges in 2020 as the economic consequences of the pandemic materialise with its customers.
After 3,400 staff members were put on furlough in April due to the impact from coronavirus, OVO then announced 2,600 redundancies, as the demand for some functions and roles at both OVO and SSE Energy Services was reduced due to the pandemic accelerating changes in consumer behaviour, with more customers going online and using digital tools.