Late accounts reveal Extra Energy made £26m loss in 2016

Extra Energy made a £26.7 million post-tax loss in 2016, according to its accounts which were filed to Companies House late.

The Birmingham-based energy supplier said part of the reason for the loss was a 10 per cent increase in its customer-base, which grew from 404,000 to 441,000 during the period.

As a result of the rise in customer numbers, Extra Energy saw its turnover increase to £359 million, up from £253.7 million the previous year. However, despite a “reasonable gross margin” being available, the cost of serving these additional customers resulted in an operating loss of £13.7 million, compared with a profit of £1.2 million the previous year.

Extra said the influx of customers “created pressure” on certain operational processes such as billing and complaints handling, which led to an Ofgem investigation commencing 1 July 2016.

The company had to “moderate” customer number growth from early summer 2016, to allow time for new processes to “bed into the operation”.

Another reason the company gave for its losses was the tough market conditions which energy suppliers have been faced with recently.

In addition, the company – which is funded in euros – made a foreign exchange loss of £7.8 million due to the significant devaluation of sterling post-Brexit-vote. In total, the supplier made a loss after tax of £26.7 million.

Companies House allows private limited companies nine months to file their accounts.

Extra said its accounting period had “recently changed”. Therefore, although it looks as though its accounts were filed six months late, they were due in March 2018, making them “a few weeks” late. The company’s directors are unlikely to have incurred penalties beyond a possible late filing charge.

Extra Energy has long been a laggard in customer services and complaints league tables and, for three quarters in a row in 2016 it came bottom of the Citizens Advice complaints handling league table for the 22 largest domestic energy suppliers.

Last month, the supplier scored poorly in Citizens Advice’s star rating table for customer service, receiving just one star out of five for complaints, and two out of five for ease of contact.

However, the company insisted it has been investing heavily in “professionalising” the business.

As part of this, early last month it announced the appointment of former Nisa boss Nick Read as its group chief executive officer. It said Read’s consumer and commercial experience leaves him “ideally placed” to transform the group’s operations and “put consumers at the heart of the company”.