Independent Energy shares fall on warning over billing fiasco's impact

Click to follow
The Independent Online

Independent Energy, the troubled gas and electricity supplier, yesterday kept up the run of bad news for investors with a warning that its ongoing billing fiasco would hit profits.

Independent Energy, the troubled gas and electricity supplier, yesterday kept up the run of bad news for investors with a warning that its ongoing billing fiasco would hit profits.

The company, which has been plagued with problems with billing its domestic and small-business electricity customers this year, said the rate of cash collection had been below management expectations. It said this had led to an increase in facilities required to fund working capital and that it was in discussions with banks. The company's credit facilities run out on 29 September.

Its shares tumbled 23 per cent to 460p yesterday, having been as high as 3,617.5p in March, bringing down its market value in a few months from £1.5bn to £187m. The company said talks with parties interested in buying Independent Energy or in taking a stake, were continuing. Sir Richard Branson's Virgin Group and London Electricity are seen as possible buyers.

Independent Energy said it would have to delay its final results, due in the middle of this month. It gave no new date for publication of the figures, to cover the period to 30 June, but added that the audit would start shortly. It said earnings would fall short of the £32.0m forecast by analysts for the period.

The company, based in the West Midlands, has been banned by the regulator, Ofgem, from taking on more domestic and small business customers until it has improved its performance. It has difficulties in the charging of customers in the sub-100kW market, representing about 40 per cent of turnover. In June, the company said it was owed £119m by customers.

Independent Energy blames the problems on transferring customer data received from the former regional electricity monopolies to its own computer systems. Its problems stem from widening its offering from large businesses to smaller customers, after the market was opened to competition 18 months ago.

Comments