Britain’s Octopus Energy grabs bigger share of energy retail market

LONDON, Jan 29 (Reuters) – Octopus Energy Ltd is now the UK’s fifth-biggest electricity supplier after taking on new customers that boosted revenue last year following the collapse of smaller suppliers.

Octopus reported energy supply revenues of 1.9 billion pounds ($2.6 billion) as of April 30, 2021, up from 1.2 billion in the same period a year earlier, as its customer base grew to 2 .1 million, it said in its annual results on Saturday.

The private company, part of the Octopus Energy group, now has more than three million customers, making it the fifth largest energy retailer in the UK after Centrica (CNA.L) British Gas, OVO Energy, E.ON (EON.UL) and EDF Energy from EDF (EDF.PA).

Octopus posted an operating loss of nearly £85m last year, compared to a loss of nearly £50m in 2020, which it says reflects continued reinvestment.

After removing customer acquisition costs and exceptionals, the loss was around £1million, he added.

Natural gas and electricity prices in Europe have soared this year, as economies reopened after COVID-19 shutdowns and strong demand for liquefied natural gas in Asia caused supply to plummet. Europe.

More than 25 UK suppliers have collapsed since the start of 2021 due to rising wholesale gas and electricity prices, poor forward electricity sales hedging and because a price cap prevented them from passing on rising costs to customers, forcing millions of households to switch to new providers.

“The company expects to incur losses of approximately £100 million as it absorbs the impact of the energy crisis on behalf of its customers,” Octopus Energy Group said in a statement.

Octopus Energy Ltd, which provides gas and renewable electricity, said it follows a sophisticated hedging policy, making forward commitments for the delivery of electricity and gas for each customer acquired or renewed under a fixed price contract.

Traditional providers hedge their customers’ needs well in advance, but some of the smaller players have avoided this strategy to give them greater pricing flexibility to try to take advantage of the arbitrage between wholesale and retail pricing. .

Octopus Energy Group, backed by Octopus Investments, said it halved its group-wide operating loss to £31m last year from £63m in 2020.

The group’s revenue rose 62% year-on-year to £2bn due to growth in energy supply and licensing of its software and technology platform, Kraken.

He also announced that he had acquired Plüm Énergie, a French start-up which currently manages nearly 100,000 energy accounts, from individual customers and large companies to local authorities.

($1 = 0.7453 pounds)

Reporting by Nina Chestney; edited by Susanna Twidale and Elaine Hardcastle

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