The energy consultancy firm Utilitywise has announced its decision to put itself up for sale. This decision follows the company’s second delay in publishing its accounts, which raised concerns among auditors.
Based in North Tyneside, Utilitywise is exploring offers for parts of the business or the entire company as it grapples with refinancing issues and a significant drop in its share price.
Utilitywise Announces Sale Amid Financial Struggles
Energy consultancy firm Utilitywise has declared it is up for sale following a second delay in the publication of its accounts. The company, which is based in North Tyneside, had initially postponed the publication of its accounts in November after auditors raised concerns about the firm’s revenue estimation methods.
In a statement to the London Stock Exchange, Utilitywise indicated they are open to offers for either parts of the business or the entire company. Following this announcement, trading of shares in the tech-led firm was suspended, resulting in a significant drop in its share price, which plunged more than 50% to below 3p.
Share Price and Financial Challenges
Utilitywise’s share price has experienced a steady decline over the past year, falling from around 40p in January last year to below 3p following the recent announcement. The company’s share price had peaked at £3.70 in 2014.
Negotiations over refinancing its existing £25 million banking facility have been stalled until further equity investment can be secured. Utilitywise has approached various investors to raise additional equity but has not yet garnered sufficient interest.
Debt and Refinancing Complications
The company’s lending bank has expressed willingness to refinance Utilitywise’s banking facilities at the same level, provided that the firm secures additional funding from alternative sources.
Utilitywise has stated that it would need a £10 million investment to make strategic changes aimed at improving revenue streams, focusing particularly on its Internet of Things solutions and creating a digitally driven channel targeting micro-SME customers.
Challenges with Revenue Estimation
Last year, Utilitywise had to repay £7.6 million to a major energy company after it overestimated energy usage. This incident has further complicated the company’s financial situation, adding to the urgency of securing new investments.
To rectify this, the firm is prioritising the development of a multi-utility bill management service with automation at its core, aiming to enhance efficiency and revenue.
Utilitywise has 27,000 customers, but the challenges in revenue estimation have raised concerns about its financial health and long-term viability.
Looking Ahead
Utilitywise’s current priority is to secure an additional £10 million in funding to facilitate its strategic shift and stabilise its financial position. The focus remains on innovation within the energy sector, particularly leveraging technology to offer enhanced services to its customers.
The company is also exploring the creation of a digitally driven channel to cater to the needs of micro-SME customers, aiming to attract a wider customer base and diversify revenue streams.
The decision by Utilitywise to put itself up for sale comes amid significant financial challenges and a considerable drop in its share price. By focusing on attracting new investments and prioritising technological innovation, Utilitywise aims to stabilise its financial position and secure its future in the energy consultancy market.
The company’s ability to overcome its current financial difficulties will be crucial in determining its future trajectory. Stakeholders will be closely watching how Utilitywise navigates these challenges and whether it can successfully attract the needed investments.