Push for growth sees Octopus’ losses mount

Octopus Energy chief executive Greg Jackson has said his company’s £61 million loss for 2019/20 was driven by the supplier’s “relentless investment” in new technologies, international expansion and customer growth.

The retailer saw its revenue grow 160 per cent from £477 million to £1.24 billion and estimates a revenue of £2 billion as of year end April 2021.

Octopus said its Kraken platform helped achieve efficiency gains which saw the company’s gross margin rise from 0.8 per cent to 5.4 per cent and gross profit increase by £63.5 million to £67 million in the year to April 2020.

However significant investments in technology and scale led to a £61 million loss which, following a tax benefit of £8 million, stood at £53 million in total.

In 2019 Jackson declared the company was in its “global expansion phase” following the acquisition of German green energy supplier 4hundred and Octopus has also since expanded into the Australian market.

The company, which was valued at more than $2 billion last year, told Utility Week it expects to remain loss-making in the next financial year due to its continued investments.

Elsewhere during the period the company’s UK customer base doubled to 2.3 million accounts (1.4 million households). As of April 2021 the company served 3.9 million accounts (2.1 million households), or a 7.5 per cent market share.

Furthermore Octopus has begun licensing its Kraken platform to fellow large supplier Eon/ Npower, as well as disruptor brand Good Energy. Overall Kraken supplies 17 million accounts globally.

In response to the results Jackson said: “The UK business operates at sustainable operating margins, with Kraken enabling lower operating costs than rivals.

“Our net loss of £53 million is driven by our relentless investment in new technology for a low-carbon grid, expansion into more countries and markets and investing in customer growth. Our mission to drive cheaper, greener energy globally is truly gathering pace.”