Acquisition of JPS Renewable Energy Ltd and its wholly owned subsidiary, Trust Solar Wholesale Limited

and

Vendor Placing to raise £2.1 million

Good Energy Group PLC (“Good Energy” or the “Company”) (AIM: GOOD), the 100 per cent. renewable electricity and energy services provider, has announced that it has entered into a conditional binding agreement to acquire the entire issued share capital of JPS Renewable Energy Ltd (“JPS”), a specialist solar and storage installation and distribution business, and its wholly owned subsidiary, Trust Solar Wholesale Limited (“Trust”), a standalone distribution and procurement business based in Maidstone, Kent (together “JPS Group” or the “Acquisition”). The Acquisition is on a debt-free, cash-free, basis for an initial consideration of £7.0 million (the “Initial Consideration”) with further deferred consideration of up to £6.75 million, payable in cash over a two-year period (the “Deferred Consideration”), subject to certain performance conditions. Together, the total maximum consideration is £13.75 million (the “Total Consideration”).

The Initial Consideration will be satisfied by a payment of £3.7 million in cash on completion and through the allotment of 1,322,000 new ordinary shares of 5 pence each in the Company (the “Consideration Shares”). A proportion of the Consideration Shares have been placed on behalf of JPS Group’s selling shareholders (the “Vendors”) via a vendor placing of 842,000 Consideration Shares (the “Placing Shares”) at a price of 250 pence per Placing Share (the “Placing Price”) raising proceeds of approximately £2.1 million for the Vendors (the “Vendor Placing”).

The Placing Price represents a discount of 9.4 per cent. to the mid-market closing price of 276 pence on 9 February 2024, being the latest practicable date prior to the date of this announcement. The remaining 480,000 Consideration Shares (the “Vendors’ Consideration Shares”) will be retained by the Vendors and will be subject to a twelve-month lock-up period and orderly marketing arrangements. Vendors’ Consideration Shares represent approximately 2.8 per cent. of the Company’s enlarged share capital on Admission.

Acquisition highlights

• Good Energy has agreed to acquire JPS Group for an Initial Consideration of £7.0 million, on a debt-free, cash-free basis
• Further Deferred Consideration of up to £6.75 million payable in cash over a two-year period subject to the achievement of certain performance conditions.
• Based in Maidstone, Kent, JPS Group was founded in 2011 and comprises of a leading solar and storage installer and its wholly owned subsidiary Trust a standalone distribution and procurement business whose customers include JPS.
• For the financial year ended 30 April 2023, JPS Group reported revenue of £12.2 million and profit before tax of £0.6 million.
• For the financial year ending 30 April 2024, the JPS Group is on track to deliver revenue of £19.6 million and profit before tax of £1.3 million.
• The Acquisition strengthens Good Energy’s service offering and accelerates the Company’s energy services growth strategy in targeting higher margin, growth markets with lower working capital requirements. Good Energy is targeting an equal weighting of energy services and energy supply earnings by 2025.
• The Acquisition is expected to be earnings accretive in the current year ending 31 December 2024.
• JPS’s highly experienced management team has committed to remain with the business.

Vendor Placing highlights

• Vendor Placing to raise approximately £2.1 million for the Vendors at the Placing Price. Placing Shares will represent 5.0 per cent. of the Company’s enlarged share capital on Admission.
• Vendor Placing allows the Company to preserve existing cash resources for working capital requirements and retains flexibility to continue to pursue both organic and inorganic growth opportunities.
• The Vendor Placing will be effected pursuant to the Company’s existing shareholder authorities and is not conditional upon Shareholder approval.
• Investec Bank plc (“Investec”) is acting as Nominated Adviser, Joint Bookrunner and Joint Broker alongside Canaccord Genuity Limited (“Canaccord”) as Joint Bookrunner and Joint Broker in connection with the Placing (together the “Joint Bookrunners”).

Outlook

• Good Energy has continued to trade in line with the Board’s expectations following its last update to the market in November 2023.

Nigel Pocklington, Chief Executive Officer of Good Energy Group PLC

“The acquisition of the JPS Group is an exciting next step in Good Energy’s growth strategy and further solidifies our position as the UK’s go-to solar specialist.

“Solar is experiencing a boom in the UK and its role in decarbonising our energy system is absolutely crucial. Installations are back at the peak we saw during the introduction of the Feed-in-Tariff – another period in which Good Energy was a key player, leading to our position as the largest voluntary administrator of the scheme today with over 180,000 solar generator customers.

“The solar installation market was worth £1.9 billion in 2023 with installations growing 38 per cent. on already strong growth in 2022. This is pronounced in the South East, which is the region with the fastest rate of domestic installations in the country.

“The JPS Group has carved a position as a leading installer across the region, serving as the solar specialist in the South East of the UK for larger homes and properties with more complex requirements. It is growing at a significant rate to help supply a specific market that is demanding premium clean energy products and services, which Good Energy is well positioned to provide as a premium, trusted and truly green energy supplier.

“Having integrated our previous acquisitions we are already marketing solar, storage and heat pumps alongside supply as everything you need for a greener home or business. Integrating JPS Group under the Good Energy brand will help to grow and consolidate Good Energy’s market share, affirm us as solar and storage experts, while also providing the opportunity for Good Energy to introduce its wider product suite to a new customer base.”

CEO Nigel Pocklington provides an overview of the recent interim results in the video below