Business

Budget Energy recorded £7.7m pre-tax profit as energy cost crisis took hold

Budget Energy said the introduction of new tariff structures helped bring in close to 30,000 new customers in 2020/21.

ONE of the north’s fastest growing electricity providers posted a pre-tax profit of £7.7 million last year just as a massive spike in wholesale gas prices was beginning to send ructions through the entire energy industry.

The latest set of accounts for Budget Energy, which cover the 18 months ending March 31 2021, show it expanded rapidly during that period, adding close to 30,000 new customers.

Founded in 2010 by serial Derry entrepreneur and RTE’s Dragons’ Den panellist Eleanor McEvoy, the energy disruptor was acquired by Flogas in May 2020.

As of last Spring, it had around 95,000 customers in the north, making it the north’s third largest electricity supplier behind Power NI and SSE Airtricity.

The accounts, published this week by Companies House, reveal Budget Energy’s turnover hit £78.9m in those 18 months, equivalent to a 34 per cent increase on an annualised basis.

The annualised rise in the firm’s pre-tax profits rose even sharper, at a rate of 67.6 per cent.

In a report accompanying the financial results, Budget Energy’s directors described the significant change in the wholesale energy market in 2021, which has underpinned the ongoing cost of living crisis in the north.

“In the first four quarters of the period, the company benefited from much lower wholesale prices compared to the previous year.

“However this bearish trend in electricity prices was reversed in the last two quarters of the period due to significant increases in underlying gas and carbon commodity prices coupled with supply outages and periods of unseasonably low wind.”

The continued surge in the wholesale price of gas in the summer of 2021 saw Budget Energy respond initially by announcing an 18 per cent price increase for customers in September.

That was followed in late October with an announcement that tariffs would increase by another 29 per cent from November 26.

Other suppliers announced price hikes during the same period, with Northern Ireland’s Consumer Council warning consumers were in the grip of the worst energy price shock since the 1970s.

Meanwhile, reflecting on the 18 months to March 31 2021, Budget Energy’s directors credited the huge influx of new customers to the introduction of different tariff structures during the reporting period.

It said the move was “well received in the marketplace”, gaining the supplier around 28,831 new customers.

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