Friday 17 January 2020

Seeing the light in 2020: Debt-heavy Pinergy seeks new measure of success

Going green: Pinergy CEO Enda Gunnell is aiming for a net profit in 2020. Photo: Shane O'Neill, SON Photographic
Going green: Pinergy CEO Enda Gunnell is aiming for a net profit in 2020. Photo: Shane O'Neill, SON Photographic

Shawn Pogatchnik

In six years of trying, pay-as-you-go electricity company Pinergy has never made a cent of profit in a crowded residential market - but sees light around the corner.

The firm owned chiefly by UK father-and-daughter billionaires Peter and Denise Coates is midway through a strategic switch from domestic to commercial clients. This is expected to turn sharp 2018 losses into Pinergy's first humble profit this year of around €1m on an ebitda (earnings before interest, taxes, depreciation and amortisation) basis.

CEO Enda Gunnell sees 2020 as the year when the debt-heavy firm finally records a net profit for the first time.

The key, he says, will be landing enough customers who want to control their energy use by venue, room and hour. Such detailed electricity delivery costs more per kilowatt but spurs more disciplined consumption.

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That proposition has not paid off yet in a residential market driven by salespeople offering bundled gas and electricity deals.

Unable to compete as a door-to-door discounter, Pinergy two years ago started laying off those sales staff and developed smart meter products for businesses, including hotels, farms and other agri-food firms.

Today, it has around 1,000 commercial customers. They already account for around 40pc of Pinergy's revenues, which are expected to top €39m this year, up 20pc.

Its residential unit, with 30,000 customers, is increasingly commercial in focus too, helping landlords and property managers oversee the fast-growing student accommodation sector, where Pinergy's expertise in 'sub-metering' - individually metered points within large complexes - comes to the fore.

"The traditional energy supplier is only selling kilowatts. They don't want you to reduce consumption because that will hurt their revenues," Mr Gunnell said, noting that a typical household or firm wastes around a fifth of its power.

"The world has got to do better, but there's an inherent conflict of interest in the energy markets."

Mr Gunnell said Pinergy's agreements with buy-to-rent apartment owners, SMEs and hotel groups produce growth and stable revenue, with contracts running from 12 to 36 months.

Firms strike these deals in part to document their green credentials - Pinergy sources power from wind, solar and hydro generation only - and to use more sophisticated metering to reduce their consumption by 15pc to 20pc within the first year.

Since its 2013 creation, the group has enjoyed backing from the Coates family, owners of Bet365 and Stoke City FC - and around 70pc of Pinergy. While its 2018 accounts show €36m outstanding to creditors, Mr Gunnell said this was mostly owed to the Coates family: "They're not going to call it in. They're very supportive."

Irish Independent

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