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Ovo Group made a £106 million loss in the year ending 31 December 2019, its latest financial results show.
The latest figure compares to a £41 million loss reported in 2018.
The company, parent of Ovo Energy, closed the year having reached £1.4 billion in revenue – a £400 million increase from the previous year.
It achieved a 56 per cent year-on-year increase in gross profit to £146 million (up from £94 million in 2018).
Of the loss, almost £64 million was by Ovo Energy, which was shown to have made up £1.1 billion of the group’s revenue. Last year the disruptor brand made a £45 million loss.
Ovo Energy has grown rapidly in recent years. With the acquisition of the 290,000 customers of Spark and 360,000 from Economy Energy, the company grew by 50 per cent between November 2018 and January 2019.
In September 2019 it expanded further with the £500 million acquisition of SSE Energy Services, although the deal did not complete until the following January. By the end of 2019, the company had a 4 per cent share of the market with 1.3 million customers.
As a result of the acquisitions, by Q1 2020 the supplier had a market share of more than 15 per cent with around 5 million customers.
While its retail business has seen strong growth from acquisitions, the company said increased price competition and record levels of switching resulted in a decline in customers.
It highlighted a focus on optimising smart meter installs and to this end reports that 50 per cent of its customers at the end of 2019 had a smart meter.
In February 2019 a £200 million cash injection from Mitsubishi Corporation for a 20 per cent stake valued the business at £1 billion.
Elsewhere, the group continues to invest in technology through its software platform Kaluza which powers its UK retail operations.
Covid-19
Finally, the group acknowledged that it expects the pandemic to impact its 2020 performance. It anticipates the need to recognise additional bad debt charges in 2020 as the economic consequences of Covid-19 materialise with its customers.
Responding to the results, an Ovo spokesperson said: “The energy industry is going through enormous change, driven by new technology, digitisation and the commitment to reach net zero by 2050.
“We have been investing for growth in market-leading technology to support the transformational growth of the business in the UK and internationally, with the 2019 results in line with our financial plan.”
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