First Utility profits plummet

First Utility has reported an 84 per cent drop in pre-tax profits, despite its customer base growing by a quarter.

The annual financial report for the supplier revealed that profits fell to £1.7 million in 2015, from £10.8 million in 2014 but the number of customer accounts rose to 883,000.

The additional energy customers drove a 51 per cent annual revenue growth, the accounts show, however administrative expenses increased during the year by 62 per cent as a result of “continued investment in acquiring and serving the significant growth in customer numbers”.

First Utility blamed some of the profit loss on “abnormally warm weather in November and December 2015”.

First Utility chief executive Ian McCaig said: “We continued to make strong progress against our strategy in 2015, growing our customer base by 25 per cent to 883,000 and increasing our revenues by 51 per cent to £847 million.

“A key focus of 2015 was investing for the next stage in our development. We increased the pace of investment in line with our ambitions to ensure we are well-positioned to capitalise on future growth opportunities and that customers remain at the heart of our proposition.”

McCaig said that the acquisition of the company’s billing platform assets from its third party provider marked an “acceleration of our plans to build our next generation billing platforms”.

First Utility also grew internationally, launching in Germany in September 2015 in a partnership with Shell Energy Europe.

“Having made these major strategic investments and navigated the volatility in markets generated by the warmest winter since records began, First Utility still continued to be the only of the new generation of independents to grow its track record of profitability and showed that low prices can be delivered to UK householders sustainably,” McCaig added.