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npower First Quarter 2018 Results

Highlights

  • Adjusted EBIT increased by £8m year-on-year (yoy) helped by stronger underlying domestic energy volumes, improved margins in npower’s B2B segment and the ongoing effects of the npower Recovery Programme.
  • Revenue was £172m higher than in the first quarter of 2017 due to increased consumption levels and last year’s standard variable tariff (SVT) price rise.
  • Domestic customer accounts dropped by 66,000 compared to the first quarter of 2017 due to intense market competition and some of npower’s fixed term tariffs coming to an end during the first quarter of 2018.
  • Merger with SSE’s household energy and energy services business is on track.

 

Adjusted EBIT 

Q1 2018
£M

Q1 2017
£M

Change

£M

FY 2017
£M

FY 2016
£M

Change

£M

 


37

29

 8

 (56)
 
(90)

 34

Revenue

Q1 2018
£M

Q1 2017
£M

Change

£M

FY 2017
£M

FY 2016
£M

Change

£M

 

1,894

1,722

172

6,027

6,103

(76)

 

Customer Accounts

Q1 2018
M

Q1 2017
M

Change

M

FY 2017
M

FY 2016
M

Change

M

Domestic Total

4.44

4.51

(0.07)*

4.56

4.71

(0.15)

SME Total

0.17

0.17

0.00

0.17

0.18

(0.01)

Industrial & Commercial

0.23

0.23

0.00

0.23

0.23

0.00

*Change displayed as 0.07m here due to rounding – actual figure is 66,000

Paul Coffey, CEO of npower, commented:

“2018 marks the first time in two years that we have reported Q1 year-on-year gains in both adjusted EBIT and revenue, which demonstrates how we’re continuing to make progress in strengthening our business. We’ve still got a long way to go this year, but today’s results show we’re building on the momentum gained during 2017.

“The financial improvement in the first quarter was due to tight cost discipline, and we also saw solid operational performance. Our smart meter rollout is on track; our SMETS2 pilot is progressing well and we’re well-positioned for a wider rollout later this year.

“Customer service is an area where we continue to improve and we’re climbing the ranks of external surveys that look at how our customer service is performing.  Our score in Citizens Advice’s energy star rating is the best it’s ever been and over 30% higher than it was when this data was first published in 2016.

“Although our results show signs of progress, this is mainly due to cost management as the market we operate in remains very competitive, which is putting real pressure on margins and customer account numbers. Wholesale costs, along with policy costs for the large and medium suppliers, are continuing to rise, as was reflected by our SVT price increase last week. The competitive landscape looks set to remain tough, and with policy changes on the horizon in the form of an SVT price cap, our focus has to remain on ensuring npower continues to manage its costs strictly, building on the work started in its Recovery Programme. 

“The proposed merger between npower and SSE’s British household energy and energy services business is progressing according to plan following the CMA’s decision to refer the merger to a Phase 2 review.  This merger will create an independent, customer-focused company, offering customers a more efficient, improved service, and the recent appointment of Katie Bickerstaffe as Chief Executive Designate of the combined company marks a key milestone. With her outstanding experience in retail and knowledge of the challenges the British energy market presents, Katie is best placed to build a new, independent, and, most importantly, customer-focused energy company, with the agility to adapt to the ever-evolving energy supply market.” 

 (ENDS)

For further information please contact the npower press office on 0845 070 2807