BUDGET Energy has revealed a pre-tax profit of £1.5 million for the year to March 2022, but the electricity supplier said its profit margin has been significantly curtailed by surging wholesale costs.
Set up in in Derry during 2010, the energy disruptor was acquired by Dublin-based Flogas in May 2020. It now has around 90,000 domestic customers in the north.
Its latest accounts show it remained profitable last year. But rising costs, particularly due to the surge in the price of wholesale natural gas, ate into its profits.
Budget’s turnover hit £66.4 million for the 12 months ending March 31 2022, 70 per cent more than it generated in 2019. But last year’s costs were 85 per cent up on 2019, rising by £22m to £61.3m.
The supplier’s decision to group the lockdown period into a single set of accounts, spanning an 18-month report ending March 2021, make a like-for-like comparison between 2021 and 2022 difficult.
Budget reported a pre-tax profit of £7.7m for the 18-months ending March 31 2021.
But the directors said its gross profit margin was cut from 17 per cent to 8 per cent last year.
“The decline was predominantly due to wholesale electricity prices, which increased significantly compared to prior year, due to underlying rise in gas and carbon commodity prices. “
The company described 2021/22 as “challenging” and said “improved” tariffs were introduced to mitigate the impact.
During the reporting period, Budget Energy increased its domestic tariff twice, first by 14.9 per cent on July 2 2021, adding £92 to the typical annual bill, and again by 18 per cent on October 8 2021.
The Consumer Council the October 2021 increase was the third price hike inside seven months, with tariffs rising by 36 per cent in that time.
Budget Energy’s directors said: “The timing of our price increases (compared with our competitors) resulted in some customer losses in the final quarter of the year.
“The impact has been minimal. We remain competitive, and customer focuses.”
The latest accounts filed with Companies House pre-date the most significant electricity price hikes in the north.
Budget Energy, alongside the other domestic suppliers, significantly hiked tariffs in the second half of 2022.
Budget increased its domestic electricity tariff by 27 per cent on May 27 2022, adding £280 onto the typical annual bill, and moved again in October 2022, this time raising prices by a further 32 per cent.
The latest accounts state the business did not pay, or propose to pay, a dividend to its shareholders for the year ending March 2022.
However, it revealed that £6.79m had been paid for the 18-month period ending March 31 2021.