Sureserve Group revels in rebounding revenues following M&A spree
Sureserve Group (Sureserve) has rebounded strongly from challenging pandemic conditions with a 24.7 per cent revenue boost in its freshly published preliminary results.
The social housing energy services business has revealed revenues have soared to £244m over a 12-month window up to last September.
This not only an increase on last year, but is 15 per cent higher than 2019’s results, the company’s last full-year unaffected by the pandemic.
Operating profits have also enjoyed healthy growth, rising 40.3 per cent to £14.6m.
The overall improvement in the energy solutions specialist’s performance follows a strategic review of the company and increased merger and acquisition activity over the past tear.
It has also emerged relatively unscathed from the energy crisis, as it does not supply customers with gas but instead offers energy efficiency solutions predominantly to social and low-income households.
Alongside, impressive headline results, Sureserve has also reported good visibility of earnings with 73 per cent of its full-year earnings now covered in its order book.
On the whole, Sureserve picked up 167 contracts, valued at £417m and acquired Vinshire Gas Limited last January, integrating the business into its overall offering over the course of the financial year.
More recently, it snapped up CorEnergy last month for £7.5m in a post-period end deal.
The company’s ambition is to become the market leading energy services group through further ‘bolt-on’ acquisitions, with a particular focus on enhancing its gas heating and maintenance operations.
There is no intention to provide a final dividend for 2021, with the group aiming to focus its capital on driving its growth plans through acquisitions.
Despite this setback for investors, the company’s shares are up six per cent on the FTSE AIM All-Share following the results.
Chief executive Peter Smith recognised the group’s pivot to long-term energy maintenance was not a “sexy space” but its a “space we understand” amid the global transition to green solutions and net zero carbon emissions.
He told City A.M. that labour and wage inflation from the current cost-of-living crisis and energy crunch were the primary headwinds facing the business.
However, he considered these challenges priced in and was optimistic about Sureserve’s future ambitions.
Commenting on the company’s performance over the next few years, Smith said: “I think absolutely this organic growth continues in the fact that we are continuing to win tenders at a regular weight of knots.”
Nick Winks, non-executive chairman of Sureserve, added: “Sureserve is at an exciting stage of its corporate life, with a profitable and stable platform from which to grow. Our strong market position in the provision of energy services to the UK social housing sector provides the Group with excellent opportunities.”