Gladstone Commercial Corporation Annual Report 2023

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FY2023 Annual Report · Gladstone Commercial Corporation

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Annual Report
& Accounts

2023

Annual Report &
Accounts 2023

Contents

Strategic Report

Good Energy at a glance

Chair's review

Chief Executive's review

Our business model

Strategic review

Sustainable development goals

Task Force on Climate-Related Financial Disclosures

2023 Emissions report

Engaging with our stakeholders (s172 statement)

Principal risks and uncertainties

KPIs

Operating review

Chief Financial Officer's review

Governance Report

Financial Statements
Acronyms and definitions

151

Contents

Good Energy at a glance

Why: To power a cleaner, greener future.

How: By making it simple to generate, use

and share clean energy.

A transformation from renewable supply to renewable energy services

Acquisitions have enabled Good Energy Group
to provide renewable heat, solar, battery and
EV charging installation services

We are an established microgeneration
specialist – from Feed-in Tariff services and
export payments to solar installations

Flexibility, import and export tariffs underpin
our technology offering to deliver carbon and
cost savings for the customer

Continued investment in market-leading app
for EV drivers.

The investment case

•

Ideally positioned to benefit from UK policy drivers

• Diverse business with multiple revenue streams

•

Exposure to high growth markets

• Ongoing digitalisation will drive cross sell opportunities.

•

See our business model for more details on pages 8-9.

Good Energy Annual Report 2023Financial performance

• Gross margin

Gross margin %

increase reflects
recovery of margins
as tariffs caught up
with wholesale cost
rises in 2022.

2022

2023

12.0

17.4

• Profit before tax
reflects recovery
of margins in
2023 following
2022 wholesale
price spikes1.

Profit before tax £m

1.4

2022

9.2

2023

5.7

• Cash and cash

Cash & cash equivalents £m

24.5

41.3

equivalents reflects
strong profitable
performance and a
temporary increase
in customer credit
balances.2

2022

2023

Non-financial highlights

• We now have over 1 million customer relationships,

exceeding our 2025 ambition

•

In 2023 we launched an industry-first hourly
renewable matching service

Innovative export product rollout transitioning
+60,000 Feed-in Tariff customers to smart export

In 2023 we were ranked the 17th best large employer
in the UK

• Renewable electricity generated in 2023 saved 120k
tonnes in carbon emissions, equivalent to planting a
woodland the size of 150 football pitches

• We achieved a Trustpilot rating of 5 stars – our best

ever rating by customers

• We retained accreditations for the sustainability of

our energy services (see page 17).

1Reported profit before tax of £5.7m compares with an underlying PBT of £1.4m in 2022. The reported PBT for 2022 was £9.2m and included
a one off gain of £7.8m on loss of control of a subsidiary

2See page 35 for further details.

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Strategic Report

Chair’s review

This year, Good Energy

has advanced its mission
with strategic acquisitions,
strengthening our position as
a leader in the UK's transition
to net zero.

Good Energy Annual Report 2023

Overview

2023 was the year we set out to build on the progress
made on our energy services strategy in 2022, and
I’m pleased to say that this has been successful. We
have launched new, innovative solutions, acquired
further installation capability and delivered leading
customer service levels. Against the backdrop of a
stabilising energy market, we have delivered a year of
strong financial performance.

Good Energy is dedicated to powering a cleaner,
greener future. This year, the Company has
advanced this mission with strategic acquisitions,
strengthening our position as a leader in the UK's
transition to net zero. Our efforts in solar services
and installation across key regions underline our
commitment to this vital shift, reflecting our role in
driving forward the nation's decarbonisation agenda.

For our customers, they have access to a trusted
partner which can now facilitate their ambition to
install, consume and generate green power for their
home or business, and which can also ensure they
earn more from the power they generate. For our
investors, they have exposure to a highly exciting
growth market and are benefitting from the value
creation achieved through our investment into
Zapmap. This growth and expansion is underpinned
by a stable energy supply business operating in a
more steady UK energy environment, with forward
looking power and gas prices returning to levels seen
prior to Russia’s invasion of Ukraine.

Despite this environment, prices remain high in historic
terms. The rising costs emphasised the need to shift
away from fossil fuels and encouraged people to
insulate themselves from the high prices by switching
to solar power, with record numbers of rooftop
installations taking place in 2023.

Also in the period, as part of Ofgem’s compliance
work Good Energy was ordered to pay £1.25m
into the regulator’s redress fund and an additional
£368,404 in goodwill payments to customers. This
followed the surfacing of an issue relating to payment
method changes which originated from a process
change made in 2019. The issue, which was self-
reported as soon as it was apparent, has since been
addressed with new automated processes, standards
and governance which the Board is confident will
prevent any similar mistake in future.

We exited the year in a strong position. We have
a robust balance sheet, continue to invest in high
growth markets and are helping more homes and
businesses control energy costs and decarbonise.

Strategic developments

Looking ahead

The Board has confidence in Good Energy’s strategic
direction and future prospects. In the short term,
trading has commenced in line with management’s
expectations. Further ahead, as a trusted brand with
an array of high quality services under one roof, Good
Energy is well positioned as a premium specialist in
the rapidly growing microgeneration market. We
have a proven track record of delivering on our
strategy and we look forward to creating further
value in 2024 and beyond.

Will Whitehorn

Chair

26 April 2024

2023 was a transformational year for Good Energy.
Last year, I talked about the strong platform we had
built to deliver our energy services strategy, which
included the acquisition of heat pump installation
business, Igloo Works, in Q4 2022.

This year, we have accelerated progress in providing
energy services through pursuing a strategy that
has delivered two further acquisitons: solar installers
Wessex ECOEnergy in 2023, and JPS Group
(completed post year end).

These acquisitions have supported our ambition to
help one million customers cut carbon by 2025, and
have been completed while rolling-out innovative
solar export solutions and maintaining a high level of
customer service and operational efficiency.

As we head into 2024, Good Energy is positioned
as one of the leading installers of clean energy
technology in the South of the UK focused on a
bespoke, high quality service offer.

Capital allocation

Our substantially debt free position and strong cash
balance allows us to continue to invest for sustainable
growth, which is reflected in our capital allocation
policy. Post period end, in February 2024, we raised
£2.1m through a vendor placing as part of the JPS
Group acquisition, testament to investor support for
our ongoing energy services strategy. We welcome
our new, supportive institutional shareholders.

We recognise the importance of a dividend to
many shareholders. Following a strong operational
performance in 2023 and reflecting our confidence
in the ongoing business, the Board recommend a final
dividend for 2023 of 2.25p per ordinary share, taking
our full year dividend to 3.25p (2022: 2.75p).

Board

On behalf of the Board, I am delighted to welcome
Fran Woodward to her new role as a Director on the
Good Energy Board. Fran joined the Board on 20
October 2023 and is, currently, Good Energy’s Chief
Operating Officer. Fran has been an integral part of
Good Energy since 2014, steering vital functions such
as Sales and Energy Origination, Marketing, Customer
Operations, and the People and Culture departments.
Her extensive leadership experience, gained from
notable organisations such as Marks & Spencer,
Coca-Cola, Dyson, and EDF, has been instrumental
in ensuring that our customers remain central to our
strategy, operations, and culture.

See pages 38-41 for full biographies of all Directors.

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Strategic Report

Chief Executive’s Review

Overview

The energy market will be transformed in the next
ten years. A mass transition towards small-scale,
low carbon technologies is taking place. And
Good Energy, with its purpose to create a cleaner,
greener world, is ideally positioned to help drive this
transition following a transformational year in 2023.

Small scale solar (below 50kW) installations increased
38% in 2023 (MCS), from an already significant
doubling in the install rate in 2022 as households
and businesses looked to insulate themselves from
rising energy costs. The UK solar market, worth £1.9
billion today (MCS), is anticipated to more than
double to £4.6 billion by 2030 (LCP Delta). With
only 8% of solar-suitable homes currently equipped
with panels, there's a vast potential for increase.
The South of the UK is leading in market share and
installation rates, demonstrating strong growth.

Similarly, air source heat pump installations increased
by 20% last year to over 35,000, supported by
government incentives. Whilst this market is more
nascent than solar, the government remains
committed to its target of hitting 600,000 installations
per year with heat pumps being the primary method
through which the UK will decarbonise its heating. This
continuing commitment was signalled by the Boiler
Upgrade Scheme grant being enhanced to £7,500.

The energy market will
be transformed in the next
ten years. A mass transition
towards small-scale, low carbon
technologies is taking place.

UK Domestic Installations - Actual and forecast to 2030

200

180

160

140

120

100

)
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2015

2016

2017

2018

2019

2020

2021

2022

2023

2030

Solar installs (cumulative)

Heat pumps (cumulative)

Solar installs (annual)

Heat pumps (annual)

)
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2.5

1.5

0.5

Good Energy Annual Report 2023

Everything for a greener home or business

Throughout the company’s history, Good Energy
has led the way in supporting microgenerators,
with the goal of making it simpler for customers
to generate and use renewable power. In 2022
we announced an ambition to help one million
homes and businesses cut their carbon by 2025.
Following a productive year investing in new tariffs,
acquisitions to offer installation services, offering
market leading customer service and paving the way
for a smarter, digitised customer experience, along
with continued growth from Zapmap, Good Energy
has achieved that target — a year ahead of time.

Our goal now is to go further in simplifying our
offer and make it easier than ever to come to
Good Energy for everything you need for a greener
home or business. We will look to bring all of our
services under the Good Energy brand, so that it
becomes a trusted hallmark for good, genuinely
green energy services. With the work we have
done in 2023 we are now well on the way.

Nigel Pocklington

Chief Executive Officer

26 April 2024

Against this backdrop energy supply remains
a challenging business. Margins, especially for
domestic supply, have long been slim. High prices
over the past two years have not changed this,
and whilst they have climbed down from their
peaks somewhat the market remains volatile
comparative to before the energy crisis. In this
period, we have delivered another strong financial
performance in 2023, whilst activating our strategy
through the roll out of new tariffs and services
alongside investment in our installation footprint.

Delivering on our vision

Good Energy has long set out a vision for a
decentralised, decarbonised energy system in which
suppliers are no longer purchasing electricity and
gas from a few large generators and supplying
it to customers, into one where smart, clean
technologies create a more participatory system.
We are now seeing this vision realised with the
flaws in a fossil fuel-based energy supply system
more apparent than ever; installations of small
scale, decentralised clean technology surging and
smart meter adoption becoming predominant. And
Good Energy is poised to play an important part.

Following three acquisitions in a little over 12 months,
Good Energy now offers everything you need for
a greener home or business. Renewable electricity
supply, solar, storage and heat pump installation,
EV charging and export tariffs. Plus we are now
introducing flexibility services to make all of this
technology work together for the customer.

What this creates is not only a business that remains
committed to its purpose of creating a cleaner,
greener future, but one that can provide more
value to customers and greater returns. Installation
services are significantly higher margin than
supply. One-off installations also pave the way for
recurring revenues through other services including
smart export, supply, flexibility and maintenance.

The Good Energy brand, with our 25-year history
as a renewable innovator, positions us ideally as a
trusted partner for customers looking to go green.

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Strategic Report

Our business model

Everything you need for a greener home or business

Why: To power a cleaner, greener future.

How: By making it simple to generate, use

and share clean energy.

Good Energy provides the technology to support customers to reduce their
costs and carbon footprint - along with the flexibility, import and export tariffs
that enable them to benefit from having closer control over their energy usage.

100% renewable
electricity supply

Solar panels

Solar export
payments

Home battery

Air source heat
pump for green,
efficient heating

EV charging

Good Energy Annual Report 2023The greener home and
business value chain

Customer

•

100% renewable
electricity

• Five-star service

• Smart charging

•

Lower running costs

• Energy bill savings

• Payments for export

•

Extended savings
from solar

•

Lower running costs

• Comfortable heating

•

Lower import off peak

• Higher export on peak

Renewable
supply

EV services

Solar

Battery

Heat pump

Flexibility

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Good Energy

Recurring

One off

Strategic Report

Strategic review

Introduction

2023 was a transformational year for Good Energy in which we became not
only a supply and Feed-in Tariff administration business but a fully-fledged
energy services business. We innovated on our core products in supply and
shifted into smart export, whilst investing in expanding our installation services.

Truly renewable supply

Renewable supply is the foundation on which
Good Energy’s strategy is built. Itself a model in
decentralisation, as we source the power we
supply customers via agreements with over 2,000
independent renewable generators across the UK.

Good Energy’s renewable electricity supply remains
recognised as a greener product. In 2023 we
retained our Which? Eco Provider accreditation, the
only supplier to have scored top in all three years
the consumer rights organisation has been ranking
the environmental credentials of green suppliers.
We continue to hold the Uswitch Green Tariff Gold
Standard for all of our tariffs too, and are the only
supplier with the Good Housekeeping Institute Getting
Greener label for 100% renewable electricity. Our
customers continued to provide positive feedback on
our service too, pushing our rating on Trustpilot to five
stars — one of only two UK energy suppliers which are
rated so highly. See page 17 for more on our green
accreditations.

We made a significant step in differentiating our
supply product for business customers too. As part of
our criticisms of the current unit based certification
system for renewable electricity Good Energy has
supported a shift towards time-based matching.
Now there is more widespread acceptance of the
problems with unit-based certification — Renewable
Energy Guarantees of Origin or REGOs in the UK
— there is also a growing movement towards time-
based matching. Pioneered by tech giants like
Google, which has set a 2030 goal to be powered
by ‘24/7 carbon free energy’, there is now a UN
compact for the system, which the US government
joined during COP28.

Good Energy already traded power with the aim
of matching customer demand to the output from
our renewable generators as closely as possible,
achieving around 90% matching in half-hour intervals
on an annual basis for the past five years — a very
high level enabled by our decentralised, distributed
generation portfolio. In 2023 we partnered with
technology platform Granular Energy to provide our
half-hourly business customers with the insight on
how their energy use is being matched, creating a
new level of transparency and paving the way for
flexibility and incentivising new technologies such

as storage. See page 16 for more on our new hourly
energy matching.

As electricity supply in the UK moves towards
market wide half-hourly settlement and the location
based pricing model proposed in the Government’s
second consultation on Review of Electricity Market
Arrangements, Good Energy is ideally positioned.

This is a new frontier for renewable supply and Good
Energy is leading the charge.

Solar and smart export

Good Energy is the UK’s second largest solar power
payments company. As the progenitor and largest
voluntary administrator of the Feed-in Tariff, we have
long been a significant participant in the small-scale
solar market.

2023 was the year we became an
installer, closing the loop to become
an all-in-one solar services provider.

In June, we acquired Wessex ECOEnergy, a registered
MCS, RECC and Tesla Energy Certified solar installer
and service provider based in Dorchester. Wessex
completes domestic and commercial installs, with
an established team of engineers, technicians,
and operations specialists. It has a strong brand
predominantly covering the South West of England
and a proven track record of high-quality installs with
a 5* Google review rating.

In February 2024, we completed our largest
acquisition to date of JPS Renewable Energy Limited,
a specialist solar and storage installation and
distribution business, and its wholly owned subsidiary,
Trust Solar Wholesale Limited, a standalone
distribution and procurement business based in
Maidstone, Kent. The acquisition was partially funded
through a £2.1m vendor placing. We would like to
thank new and existing shareholders for their support.

The acquisition of JPS Group marks a pivotal moment
in Good Energy's strategy, reinforcing our role as
the UK's leading solar specialist. The solar sector
is booming, reflecting its critical role in our energy

Good Energy Annual Report 2023Product pipeline

In addition to the rollout of new tariffs, shift to smart
export and increase in smart meters to over 46,000,
Good Energy further innovated in 2023. We trialled
flexibility through ‘Power Pause’, our implementation
of National Grid’s Demand Flexibility Service, paying
customers to shift their energy usage away from
peak times — a successful pilot we intend to build on
in 2024. We implemented efficiencies in our digital
services by refreshing our customer app and portal.

Looking ahead, we plan to utilise digital to further
drive efficiency whilst improving the customer
experience, introducing new features like Apple and
Google pay in our app.

We have new partnerships and tariffs planned
including a tie in with Zapmap, offering Good Energy
EV tariff customers free premium subscription to
the app. We will also be introducing new recurring
revenue streams through maintenance and servicing
for our installation customers.

We know that flexibility is the key that unlocks much
of the value of having a greener home or business.

Shifting when and what you import,
export, store or share to the
benefit of the customer, grid,
and Good Energy.

Having trialled demand flexibility in 2023 we are
looking to expand this into 2024.

transition. Good Energy, a key player since the Feed-
in Tariff era, now serves over 180,000 solar customers,
illustrating our significant influence in this space. In
2023, the solar market reached £1.9 billion, with a
38% increase in installations, particularly in the South
East, the fastest-growing region. JPS Group, known
for its expertise in complex solar solutions for larger
properties, complements our mission to supply high-
quality, sustainable energy solutions.

By integrating JPS Group with our existing offerings,
including solar, storage, and heat pumps, we're
not only expanding our market presence but also
introducing our comprehensive energy solutions to
more customers. This strategic move consolidates our
position as industry leaders and enhances our ability
to meet the increasing demand for clean energy.

In tandem, we continued to innovate in the export
tariff market. We converted over 60,000 Feed-in
Tariff customers to smart export and launched our
market leading Solar Savings export tariff — open
to FIT and non-FIT generator customers alike. We
also introduced an enhanced Solar Savings rate
for customers who install solar and battery storage
with us, providing an end-to-end customer benefit
for choosing Good Energy. See page 18 for more
information about our solar services.

Heat

Following the acquisition of Igloo Works in December
2022 we successfully integrated this heat pump
installation business into Good Energy, rebranding and
merging shared functions including marketing, sales,
HR, finance and legal.

As with solar, Good Energy’s positioning is at the
premium end of the market. We offer customers
bespoke design and end-to-end installations suiting
more complex properties. In addition Good Energy
heat pumps come with a 10 year warranty and a
remote performance monitoring service that ensures
the installed heating system is running efficiently,
providing reassurance to customers.

Our average installation is 7.5%
larger than the average system size
compared to the top 200 UK installers.

See page 17 for more information about our green
heating, including heat pump installations.

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TCFD key:

Strategic Report

Zapmap

As the adoption of electric vehicles continues to grow, now hitting over a million battery electric vehicles on UK
roads, Zapmap has maintained its leading position. The business underwent a refreshed brand and strategy in
2023, now operating on three fronts.

The first being the consumer app and web interface. With 1.4m downloads and 780k registered users, Zapmap
serves 330k active users per month looking to search, plan and pay for EV charging. Launched in 2023 came
Zapmap Spark, an API product which enables partners to seamlessly integrate Zapmap’s market leading
services and data into their products. Lastly Zapmap Insights provides another market leading service to other
businesses and partners, providing Zapmap’s unique data — from charge point operators and EV drivers – as
a service. Zapmap provides data on 95% of public charging points in the UK, with 75% showing live data and
25% coverage for payments through the app too.

Good Energy Annual Report 2023

Sustainable Development Goals

Sustainability is why we’re in business

The UN’s Sustainable Development Goals (SDGs) provide a framework that businesses can
use to help make sure they operate in a way that doesn’t harm people or the planet. Good Energy
is a member of the UN Global Compact, the world’s largest corporate sustainability initiative.

Our business has two of the 17 SDGs at its heart:

Affordable & clean energy (Goal 7)

Good Energy has supported the growth of independent renewable generation in the UK for 25 years.
With the support of our customers, employees and investors, we provide a route to market for small
energy projects by paying independent generators a fair price for their energy. We also support
nearly 200,000 people to generate clean energy for themselves.

Climate action (Goal 13)

The urgent need to reduce carbon emissions and limit global heating continues to inform how Good
Energy operates. Our financial decisions, new customer propositions and policy positions all come
from this starting point.

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Strategic Report

Task Force on Climate-Related
Financial Disclosures

Good Energy was set up to tackle climate change – and weather volatility directly
affects our business of sourcing and supplying renewable electricity. The climate
crisis has a significant impact on our operational and strategic direction and how
we evolve our business model.

Statement of compliance - We are voluntarily reporting the recommendations laid
out in the Task Force on Climate-Related Financial Disclosures (TCFD). We are a
TCFD signatory, representing our commitment to taking action to build a more
resilient financial system through climate-related disclosure.

We have specifically disclosed 10 of the 11 disclosures, all bar strategy a, as
timescales cannot be accurately defined for climate change in the energy market.
Good Energy’s purpose and ambition is to help the transition to a 2°C or lower
scenario, with our strategy based around helping UK homes and businesses to play
an active role in this transition. Due to the nature of Good Energy's core business
and strategy, we have incorporated how we have met the TCFD recommendations and our future
focuses using these icons:

Good Energy's
Sustainability Manager
Cherish Jackson

making clear which pillar the references relate to throughout this report. The table opposite shows where
key points are located.

Good Energy Annual Report 2023
TDFD pillar & recommended disclosures

Key reference points

Page number

Governance - the organisation's
government around climate-related risks
and opportunities

• Audit & Risk report:
climate-related risks

• Operations of the Board

a. Board oversight

b. Managment's role

• Our sustainability

framework

•

Focus for 2024

Principal risks

Strategy - the actual and potential impacts
of climate-related risks and opportunities
on the organisation’s business, strategy, and
financial planning where such information
is material

•

Strategic review

• Measuring our impact

• Customer carbon

savings

a. Over the short, medium and long-term

• Carbon emissions

Impact on businesses, strategy, and
financial planning

c. Resilience of strategy

summary

•

Focus for 2024

Principal risks

Risk management - how the organisation
identifies, assesses, and manages climate-
related risks

•

Strategic review

• Measuring our impact

Identifying and assessing

b. Managing

Identifying, assessing, and managing are
integrated into overall risks management

•

Principal risks

• Directors' report:

Principle 4

•

The Board's committees

• Audit & Risk report

climate-related risks

Metrics and targets - the metrics and
targets used to assess and manage relevant
climate-related risks and opportunities
where such information is material

a. Metrics used in line with strategy and

risk management process

b. Scope 1, 2 and 3 emissions and

related risks

c. Targets to manage climate-related risks
and opportunities and performance
against targets

•

Strategic review

• Measuring our impact

• Carbon avoided

• Our sustainability

framework

•

Focus for 2024

KPIs Which? Eco
provider

p.55

p.51

p.20

p.30

p.10

p.19

p.22

p.20

p.30

p.10

p.19

p.30

p.43

p.48

p.55

p.10

p.19

p.16

p.20

p.32

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TCFD key:

Strategic Report

Planet

Good Energy enables people to reduce their contribution to climate change by making it simple to
generate, use and share clean energy.

As a purpose led company, our environmental impact has focused on the carbon emissions avoided by
supplying homes and businesses with renewable electricity. This is still a vital and measurable part of our
impact, which now extends into areas such as supporting more households to generate their own electricity
and switch from gas or oil-based heating to electric heat pumps.

100% renewable electricity

Carbon emissions avoided through supplying 100% renewable electricity

In 2023, we avoided 119,227 tonnes of carbon emissions by supplying our customers with 100%
renewable electricity. This is equivalent to planting a woodland the size of 150 football pitches.

Our renewable electricity is sourced from renewable generators in Britain, with our generator
community now numbering over 2,000.

As a positive proof that the way we source energy leads to the growth of renewable sources,
58% of generators that we bought from in 2022-2023 were connecting to the grid for the first time.

I feel like Good Energy
magnify our efforts to combat
climate change. They are really
trying to support small generators
like us.

Nick Bard, Cwm Cadian Hydro

Hear more in our Meet the Generator series at
goodenergy.co.uk/learn/generator-stories

Breaking new ground with hourly energy matching

To increase the amount of clean energy on the grid, suppliers and customers must take an active role in using
energy at times of high renewable generation.

Our team of forecasters and traders have become extremely effective at predicting how much power we will
get from our generators and matching it against our customer demand. They do this for every half hour of
every day and manage to match supply with demand in real time over 90% of the time.

In 2023, we became the first UK energy supplier to share this level of energy matching insight with our large
business customers. In partnership with Granular Energy, we provide customers with detailed insights into how
their energy usage is matched back to renewable generators – giving them the knowledge needed to make
changes and become even more sustainable.

We’re always trying to connect people with the source of their food.

In the same way, hourly matching helps us understand exactly where
our energy is coming from.

Pete Williams, Soil Association

Good Energy Annual Report 2023
S

Our green energy accreditations

Our approach to sourcing renewable energy has been recognised for being genuinely green. As well as
maintaining our Uswitch Green Tariff Gold Standard accreditation, we also continued to be among a small
number of suppliers named a Which? Eco Provider for Energy, coming top for the 3rd year running.

Green heating

In order to meet the UK’s net zero goals there must be a widespread transition away from using gas as
a primary form of heating. In 2023 we began to take an active role in this movement by installing heat
pumps, while ensuring that the way we supply gas to properties still connected to the gas grid is as low
impact as possible.

Heat pump installation

As a heat pump installer, Good Energy specialises in working with customers with more complex
properties that may not be served by other installers.

During 2023, we launched our Green Home Stories series, where we heard from customers about the
difference getting a heat pump has made to their homes.

As part of our service, we also shared personalised heat pump performance reviews with customers, to
help them understand how to make sure their heat pumps were working as efficiently as possible before
the coldest months of the year.

Our air source heat pump makes
our home permanently comfortable.
We absolutely love returning to a lovely
warm house – which is such a contrast
to our days with an oil-powered boiler.

Paul, Good Energy customer

Read more at goodenergy.co.uk/learn/green-home-stories

Green gas: supporting Gold Standard
offsetting projects

As long as gas is still a necessary part of the
UK’s energy mix, we aim to supply it in as
sustainable a way as possible. As well as supplying
10% UK-generated biogas, we balance carbon
emissions resulting from gas supply through buying
credits in Gold Standard carbon offsetting projects.
These include projects that enable rural communities
in India and China to produce and use biogas, as well
as a grid-scale biogas generation project in Turkey.
Section 6 and 7 in our 2023 renewable energy report
discusses our green gas promise. Find the report here
goodenergy.co.uk/reports-and-policies.

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Solar services

Good Energy pioneered support for small-scale generators before the launch of the government FIT scheme.
We’re providing new services for our 180,000+ FIT generators to make sure they’re fairly paid for generating
and sharing clean energy.

This includes smart FIT export payments, which enable them to get paid for all the electricity they export,
rather than an estimate.

Launching Solar Savings

In 2023, we also released a new export tariff that will continue to make installing solar panels more financially
viable following the closure of the FIT scheme. With Solar Savings, a household with a typical 3.5kW solar array
can get paid a rate for their export that is 2-3 times higher than the FIT export rate of 5-7p.

Becoming a solar installer

Good Energy acquired Wessex ECOEnergy in 2023, an award-winning solar installer based in Dorset. The
Good Energy Solar team are installing solar for homes and working with businesses that want to reduce their
environmental impact by generating their own energy.

The Good Energy Solar
installation was very good.
Health & safety is very
important to me and I could see
the team working together safely
[...]the finished product not only
looks fantastic but also works
exactly as designed.

Knowing we can be confident
in our energy supply without
damaging the environment is
a very good feeling.

Steve Easter, Dorset

Good Energy Annual Report 20232023 carbon emissions summary

Emissions from the acquisition of a heat pump installation business were responsible for an increase in
carbon emissions by 71% compared to 2022.

This increase drove a reframing of our ongoing sustainability strategy.

Measuring our impact: our sustainability strategy in 2023

In 2019 Good Energy committed to reducing its carbon footprint to 275 tons by 2030 at the latest
(representing 50% of our emissions in 2018, our baseline year). Thanks primarily to a significant shift
from office-based to home and hybrid working, this target was actually achieved by 2022. This left Good
Energy's core operations with a low carbon footprint of 102.98 tonnes in 2022, which we offset by investing
in the same carbon reduction projects we use to offset emissions from supplying gas (see page 17).

2023 has been a transformational year in which the company launched new services. But, by expanding our
ability to support people to reduce their carbon emissions, we have in turn increased our own.

In 2023 Good Energy absorbed two new businesses into its operations: a heat pump installation business
(formerly Igloo Works) and from July 2023, a solar installation business, Wessex ECOEnergy. We rapidly
put carbon monitoring in place for the heat pump installation business and are now progressing the same for
the solar business.

We include Scopes 1, 2 and 3 in our emissions target. Previously our scope 1 was decreasing as we shifted
to remote and hybrid working. However now we operate installation businesses with van fleets. Our carbon
footprint has significantly increased due to the amount of mileage they produce (see scope 1 of our 2023
inventory on page 23). We are now collecting robust milage data and monitoring emissions, and reset our
targets in Q1 of 2024 to allow ourselves to make meaningful inroads into reducing the emissions that now
come from our fleet.

Customer carbon savings

Of course, this increased Good Energy carbon footprint is in service of a far bigger carbon reduction.
We already track the carbon avoided by supplying customers with 100% renewable electricity, and have
started to track the carbon avoided by replacing gas and oil boilers with air source heat pumps. Finally, as
we became a solar installer half way through the year, we are investigating how to fully track carbon savings
from our solar installations.

Customer carbon savings 2023

Carbon avoided
through our energy
supply operations

Carbon avoided
through heat pump
installations

119,227 tonnes

211 tonnes

Heat pump installations 2023

Operational emissions per
installed heat pump

2.31

Carbon saved per heat pump

2.79

0.5

1.5

2.5

Overall change in emissions

200

150

100

2022
102.98
tonnes

2023
175.74
tonnes
(including
fleet
mileage)

2023
121.13
tonnes
(excluding
fleet
mileage)

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Our sustainability framework

Our sustainability strategy is aligned with our organisation’s purpose and business models and is the
responsibility of our Sustainability Manager. We also have a framework of documents and voluntary
certifications that support us to continue reducing our impacts to a neutral level where possible.

Process in Place

Purpose

ISO 14001: 2015 (Environmental management system)

Governing document framework

Carbon Emissions Inventory

Measures our impact

Carbon Emissions KPI

Monitors our impact

Science-Based Targets Initiative Commitment

Audit and Risk Committee, People and Operations Board

Allows us to set evidence-based targets, measure and be
transparent

Where we embed sustainability in practices and
decision-making

Culture Champions

Engage, collaborate and advocate change

2023 challenges, achievements and focus for 2024

Achievements

Focus for 2024

Our carbon reduction strategy for 2024 focuses
on key areas, including:

Developing a fleet strategy to reduce
emissions from fuel consumption related
to solar and heat pump installations, up
until 2030

Putting in place robust monitoring and
carbon reduction targets for our solar
installation businesses

Introducing a new intensity metric to better
measure our carbon emissions through a
period of significant growth in our operations

Having taken on over 100 new employees,
improving staff engagement with how we
can continue to reduce our already small
carbon footprint.

In 2023, we continued to make our carbon reporting
more comprehensive. When employees book a
desk using our workplace management system, it
automatically logs emissions from their commute. It
also uses national averages to calculate home-based
emissions from employees not in the office.

We have also improved data collection from
partners within our supply chain, with particular
focus on emissions resulting from travelling to
complete meter readings for customers. Although
we cannot directly control these emissions, we share
our approaches to carbon monitoring and reduction
plans with our supply chain partners.

During the year we also shared our experience
in carbon reporting with businesses and
organisations local to our office in Chippenham,
supporting our community in how to track and
reduce carbon emissions.

Challenges

We continue to experience challenges in collecting
data related to cloud-based computing services,
which will remain a focus in 2024.

With Good Energy becoming a heat pump and solar
panel installer, our reporting must now take into
account travel emissions from a small fleet of vans.
In 2023 we started collecting the data needed to
bring these emissions into the scope of our carbon
inventory and include these emissions in our carbon
reduction targets.

TCFD key:

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2023 emissions report

Our greenhouse gas emissions for the full year of 2023 are presented in the table below.

We calculate our emissions using the Greenhouse Gas Protocol Standard, separating them into Scope
1 (emissions from gas and refrigerants), Scope 2 (emissions from electricity consumption) and Scope 3
(emissions from indirect activities including travel and our supply chain).

Our inventory is externally verified in accordance with the ISO 14064 standard, which is the international
standard for carbon inventory verification.

The value of each emissions category is given in the ‘value’ column. The evidence is given in the ‘source’
column. We have used emission factors from DEFRA to transfer the values of emission sources to the same unit
of tonnes of carbon dioxide emissions (tCO2e).

This graph shows our annual carbon emissions (total tCO2e) for each year since our baseline year of
2018, of which our science-based target was set against. Our science-based target is shown in the year
2030 at the end of the graph.

TCFD key:

Good Energy Annual Report 2023Carbon Emissions

Category

Unit

Value

Source

tCO₂e

Scope 1

Stationary combustion

Location Based

Market based

Natural Gas (green)

kWh

231,352.33

Energy Manager Live

41.643

0.051

Refrigerants

R-410 A

Fleet mileage
(Good Energy Works)

0.09

DEFRA guidance on FGAS

miles

146,709.27

Fleet mileage reports

0.173

54.611

Scope 1 emissions

tC02e

41.643

54.835

Scope 2

Electricity consumption

Location Based

Market based

Electricity UK (Green)

kWh

255,915.87

Energy Manager Live

52.994

Scope 2 emissions

tC02e

52.994

0.000

Scope 3

Location Based

Market based

Business travel

miles/pkm

83,496.08

Expense/Pleo Reports

Commuting

miles/pkm

511,063.63

Employee survey

0.103

Home Work Heating

kWh

65,347.23

Employee survey

Home Work Electricity/
Equipment

kWh

19,620.44

Employee survey

1.595

Waste

Paper including letters

tonne

5.99

4.93

Waste records

Supplier paper reports

Office stock

2,119.36

Invoices

Electricity losses

kWh

275,536.31

Water (supply and treatment) m3

2,926.67

Employee survey/meter
readings

Building Management
System

Scope 3 emissions

Total emissions

tC02e

1.698

96.335

7.138

86.853

11.479

2.468

0.117

3.604

3.755

4.936

0.553

120.902

175.737

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People

How we engage with our stakeholders, including our customers, employees and the wider energy industry.

Our customers

We have long found that our customers are interested in hearing about new ways we can support them to
have a positive environmental impact.

We keep our customers up to date with our activities and new services via regular communications. These
include our monthly newsletter, Good Thinking, which goes out to over 55,000 home energy customers, and
our business newsletter, which is sent to over 3,500 business customers and generators.

While preparing to launch new services such as installing heat pumps, we invited our customers to take a
survey that would help us understand more about who they are and how we can best support them.
Almost 50% of the 9,000 customers invited to take part did so, providing us with valuable insight into who
makes up the Good Energy community.

The survey results allowed us to see that, by 2025:

20% of customers are considering getting a heat pump

22% are likely to install an EV charger

25% already have solar panels

30% are likely to install a battery

33% are considering getting solar panels

Supporting vulnerable customers

Following Good Energy’s support for the Energy UK Vulnerability Commitment in 2022, this year we continued
to develop our services for vulnerable customers. This included setting up a dedicated team to serve
pre-payment customers and developing a new system to provide live support to any pre-payment
customers that disconnect.

We also worked hard to support customers in financial hardship, such as furthering our work to formally
partner with debt charities to provide enhanced support to customers, and writing off significant amounts of
debt for customers identified to be in particular hardship.

In their own words

In 2023, we were proud to reach a 5 star rating on Trustpilot, thanks to the hard work of Clean Energy
Specialists who support customers to manage their accounts.

We are committed to using green energy...

We are committed to using green energy and our 20 year experience with this
company is good. Gifty helped me with a question recently and all went smoothly,
quick response time and resolved issues with[in] a few day[s]. Thank you

Date of experience: 29 November 2023

29 Nov 2023

Good Energy Annual Report 2023As well as sharing feedback on our service, a number of heat pump and solar panel customers have been
happy to take part in filmed interviews that help us show the benefits of installing clean technology at home.

My gas boiler was
getting old and I wanted
to replace it with a
greener option, and this is
what led me to choose an
air source heat pump. It's
sustainable and efficient,
and I particularly like that
when the sun is shining, it
is powered by my
solar panels too.

Di, Good Energy Customer

Installing commercial scale solar for bigHead

As well as supplying renewable electricity and managing Feed-in Tariff payments for thousands of businesses,
in 2023 Good Energy began installing solar, including commercial scale solar for companies that want to be
more energy independent.

One such project was installing a 130-panel array for bigHead, a manufacturer based in Dorset. Within 6
months, the solar panels had saved bigHead over £4,000 on their energy costs.

Installing solar
is easy. It’s good
for business and it’s
good for the planet.
I really can’t think of
a reason not to do it.
Matthew Stevens,

Managing Director of bigHead

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Good Energy employees

In 2023, Good Energy was ranked as the 17th best large employer in the UK by Best Companies, who
independently survey employees and benchmark scores against other participating employers. This is the 3rd
year in a row we have received a positive score from Best Companies, reflecting our trust-based, inclusive
culture and the significant resources dedicated to internal communications and engagement; transparent
leadership and governance; and employee development, wellbeing and benefits.

Good Energy has an active, employee-driven diversity and inclusion strategy and has made significant process
in 2023. Notable successes include:

95% of employees disclose their personal diversity information,
enabling us to monitor progress and better tailor our working
practices and policies to staff needs. For example, we know
10% to be neurodiverse.

The Good Energy team has become more ethnically diverse,
with the percentage of people of an ethnicity other than
white increasing from 10% to 15% in 2023. This is enabled by
offering a larger number of remote working roles, widening the
locations from which employees can be hired.

We continue to develop more women into management and
senior leadership roles, with 47% of manager and 37% of ‘Head
of Function’ roles held by women (up from just 10% in 2022).
This internal development has caused a slight reduction in the
gender pay gap from 21.4% to 19.8%.

More details on our gender pay report can be found on our website at goodenergy.co.uk/reports-and-policies.

Awards

In 2023 Good Energy was
shortlisted for the Business
Leaders South West Awards for
Sustainable Business of the Year
and Inclusion and Diversity; the
Circle 2 Success Regional Business
Awards for Culture and Diversity;
the Celebrating Neurodiversity
Awards for Inclusive Employer;
the Wiltshire Life Awards for
Apprentice of the Year and Green
Business of the Year; and won
the South West Business Masters
Award for Sustainability.

Good Energy Annual Report 2023Our local community

Good Energy has been increasing its community
engagement throughout 2023.

Volunteering: colleagues have taken part in
corporate volunteering activities, including
tree-planting and protecting hedgerows for new
wildlife corridors. We also spoke at a number
of local events promoting sustainable living and
business practices.

Sponsorship: the company sponsored and
provided PR support for Chippenham Half
Marathon, which raises thousands for local
charities and is recognised for its green policies.
Good Energy also sponsored Blue Earth
Summit in Bristol, an event bringing together
influential voices in business, sustainability
and conservation. Looking ahead, we are a
headline sponsor of Chippenham Pride 2024,
demonstrating our commitment to inclusion.

Shareholders

The Board actively engages with the Company’s shareholder base, from its
individual customer shareholders right up to institutional investors. As well as market
announcements on key business developments, we send an investor newsletter covering
recent activities around three times a year. We run online shareholder presentations
through Investor Meet Company, where all shareholders have the opportunity to watch
presentations live and submit questions to the Board. These are recorded so shareholders
can also watch on demand.

Presentation and Q&A - Shareholder Engagement Progress

800

700

600

500

400

300

200

100

A G

M 2 0 2 0

2 0 2 0 interim results
2 0 2 0 prelim in ary results

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M 2 0 2 1

2 0 2 1 prelim in ary results
2 0 2 1 interim results
Pre- G e n eral M e etin g 2 0 2 2

Pre- A G

M 2 0 2 3

M 2 0 2 2

F Y 2 0 2 2 prelim in ary results
2 0 2 2 interim results

Pre- A G

Registered

Current shareholder

This graph illustrates increased registered attendee levels for online investor presentations since their implementation in 2020.

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The effectiveness of our engagement is demonstrated by consistent levels of attendance at our online
presentation and Q&As. Attendance has been steadily increasing since the implementation of online
presentations in 2020, with registered attendees rising from 50 at our first event to 671 at the most recent
event. There is an average of 18 questions asked and answered per meeting and feedback is captured after
each event to enable future improvements to how the event is run.

Bondholders

The Board actively engages with the Company’s bondholders via its bi-annual interest letters and the
Group website’s FAQ and dedicated Good Energy Bonds webpage goodenergy.co.uk/investors/good-
energy-bonds. All Bondholder queries are managed promptly and decreased in 2023 due to previous clear
communications and no out of process activities.

Policy makers and regulators

The Company maintains a constructive dialogue with policymakers on matters relevant to its current
operations, longer term strategy and purpose. In 2023 this included developing our ability to track and
influence change across a wider range of energy policy to reflect our expansion into providing low carbon
energy technologies.

Net zero mandate for Ofgem

We regularly engage with the energy
regulator, Ofgem, and the Department for
Energy Security and Net Zero, both directly
and through public consultations and industry
forums. Significant changes have been made
to the energy retail market, and the Company
has worked with Ofgem to design and
implement policy changes which enhance
consumer protections for both domestic and
non-domestic customers. Good Energy has
long advocated for Ofgem’s mandate being
altered, to allow them to play a stronger
role in delivering a net zero energy system.
We were pleased to see the Government
implement this change in 2023.

Bill support and retail reform

As energy prices have remained high, we continued our work with government to implement bill support
schemes, and the businesses expertise was used to help our customers understand the high cost of energy,
why it is driven by fossil fuels, and the actions that need to be taken to make prices more sustainable long term.

Low carbon heat

We also work with thinktanks and consumer groups who hold positions of influence in the energy sector,
targeting industry groups aligned to Good Energy’s purpose, values and strategy. Focus areas in 2023 included
working to reduce barriers for investing in low-carbon heating, and building relationships that will support the
company to deliver against its strategic goals.

Transparency in renewable supply

Good Energy’s partnership with Granular Energy enabled the
company to launch its market-leading hourly matching service for
business customers in Q4 2023. This was part of our longstanding
work to encourage transparency in renewable supply, which
continues as we demonstrate the benefits of a PPA based supply tariff,
made available to customers via a derogation from the price cap.

This, along with facilitating future innovation in energy services and
flexibility underpinned by heat pumps, solar PV and smart meters will
continue to be priorities into 2024.

TCFD key:

Good Energy Annual Report 2023Delivery partners and suppliers

Our tailored approach to engaging with our suppliers means that leaders of different functions are responsible
for the providers within their area of expertise. Our Procurement Policy and Good Procurement Guide set out
principles to make sure the Company’s money is spent wisely and ethically.

Our Procurement Function provides centralised support to make sure all our functional leaders have a
consistent approach when dealing with providers. In 2023 focus has been heavily on the integration of our new
Energy Services subsidiaries, especially Good Energy Works.

The move into this area means we are engaging with a fundamentally different supply chain with geographic
coverage, delivery issues and risk profile. Supply chain due diligence is increasingly important and as we grow
in scale the scope to leverage economies of scale with suppliers will increase.

Looking into 2024 the acquisition of JPS Group will place greater emphasis on the Solar PV supply chain and
the need to deliver a more integrated group procurement approach.

Statement of our commitments under Section 172 of the Companies
Act 2006

The preceding section has detailed how we engage with all our stakeholders. This is in accordance with our
commitments under Section 172 of the Companies Act 2006, which requires Directors to act in good faith and
in a way that is most likely to promote the success of the Company for the benefit of its shareholders. In doing
so, Directors must have regard to:

a) the likely consequences of any decision in the long term;

b) the interests of the Company’s employees;

c) the need to foster the Company’s business relationships with suppliers, customers and others;

d) the impact of the Company’s operations on the community and the environment;

e) the desirability of the Company maintaining a reputation for high standards of business conduct; and

f) the need to act fairly between members of the Company.

Having regard to the matters set out in Section 172 (1) (a-f) of the Companies Act 2006, the Board considers,
in good faith, that they have acted in a way that is most likely to promote the success of Good Energy Group
PLC for the benefit of its members as a whole.

Our approach

The Board recognises its primary legal responsibility to promote the success of the Company for the benefit of
its members, taking into account the interests of other stakeholders including customers, employees, partners,
suppliers, regulators, the environment and the local communities in which Good Energy operates.

Outcome of commitments to act in consideration of Section 172

The following summarises some of the significant decisions made by the Board during the period which
demonstrate the way in which the Directors have exercised their section 172 (1) duty and the stakeholder
group(s) impacted by these decisions:

Customers and shareholders
In delivering upon the Company's long term strategy of investment into a range of energy services for
domestic and business customers, the Board has overseen the acquisition of two solar installation companies.
These investments will allow Good Energy to offer wide range of products and services to customers,
positioning Good Energy as one of the leading installers in the South of the UK.

Customers
Aligned to the Company's commitment to provide high quality customer service, the Board supported the
creation of a dedicated team to serve pre-payment customers together with investment in systems to support
these potentially vulnerable individuals.

Employees
The Board has supported and encouraged the Company's active and employee driven diversity and inclusion
strategy. This has included overseeing a substantial increase in the number of "Head of" roles held by women
together with a full review of talent across the business.

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Strategic Report

Principal risks

Risk management approach:

Good Energy understands the importance of a strong risk and assurance framework and as such has taken
further steps this year to make improvements and widening the scope to include all entities within the Group.
The expanded operating model has necessitated additional training and resourcing across the Information
Governance, Risk and Compliance Team. Risks are monitored closely by the Audit & Risk Committee for their
potential impact on the Group and are used to make informed decisions around the delivery and evolution of
the Group’s Strategy. Emerging risks are monitored by the Executive Team supported by the Senior Leadership
Group, to enable risks to be prevented from materialising early in their potential growth.

Good Energy’s risk appetite is reviewed annually as part of our Risk and Assurance Policy and creates a
balance of risk pragmatism to allow us to continue to grow through innovation whilst providing protection
against the impact from risks in the following categories: Financial, Strategic, Business or Project Objectives,
Stakeholder Trust, Regulatory requirements / Compliance and Environmental Health and Safety.

Ongoing risk management continues to be critical for all energy companies as it helps us mitigate potential
risks to the industry in the move to a predominantly renewables-based grid.

We are currently working through a plan to incorporate risk and assurance activities for Good Energy
Works Limited into the Group Risk and Assurance framework. This is anticipated to be fully in place by the
end of the 2024.

Principal risks and uncertainties

Wholesale market and price volatility

Following the energy crisis we have continued to monitor wholesale market and price volatility, to ensure
our position remains robust. Whilst wholesale market and price volatility will always be an area of close
monitoring, this is not assessed as out of tolerance.

Financial risk management

Good Energy continues to see financial risks around wholesale trading costs, liquidity and credit as described
in note 3 in the Notes to the Financial Statements.

Regulatory and political risk

We continued to see significant change across the energy industry this year with the suspension of
prepayment meter installations continuing throughout the year, alongside additional regulatory obligations on
suppliers around customer service and management of customer vulnerabilities.

To manage this volume of change, the Company has established an Operational Change Management
Group which is supported by subject matter experts and our Regulatory Compliance Officer to ensure that
changes to regulatory obligations are implemented efficiently and effectively. Changes are brought to the
group following horizon scanning and involvement in Ofgem or wider Government consultations, both of
which support our understanding of changes and programmes of work to ensure we are not only meeting the
minimum requirements, but we are able to fully realise the benefits of the change for our customers.

In 2023, Ofgem introduced an annual review process for suppliers who hold a derogation to the price cap,
which will ensure suppliers, including Good Energy, remain compliant with the requirements from which the
derogation was awarded. This new process reviews supplier compliance to the three outcomes on which
derogations are awarded; 1) Customers have chosen the tariff 2) the tariff provides support to renewables
and 3) the cost to Good Energy is greater due to the support offered to renewable generators. In September
2023, Ofgem extended Good Energy’s SVT derogation to include a new EV variable tariff which allows
customers to charge their EVs for less overnight.

Good Energy Annual Report 2023

Purpose and brand

The Good Energy brand promises to match customer usage with 100% renewable electricity bought from
generators. Due to the complexities of the energy market and our reliance on Power Purchase Agreements
with generators, there is a risk that we could deviate from this brand promise and therefore our customers,
shareholders and other stakeholders would lose trust in the product they are purchasing or investing in. To
ensure we uphold our purpose, we put the Company through a comprehensive external Brand Promise
audit each year to provide independent assurance that we are aligned to our environmental objectives.
Our Renewable Energy Reports can be found on our website at goodenergy.co.uk/reports-and-policies.

Environmental concerns

Protecting the environment and supporting global efforts to reduce carbon emissions is a long-standing goal
for Good Energy, which is why in 2017 the Company gained certification to the Environmental Management
Standard ISO14001. As part of this certification Good Energy completes regular risk assessments and puts in
place mitigations to environmental risks, which include; pollution to the local river from the water-side office,
a fire causing emissions from the smoke and poor performance of renewable generators from changes
in the weather.

Climate-related risks are identified, analysed and assessed by the Information Governance, Risk and
Compliance teams in conjunction with the Sustainability and Facilities Manager and recorded on relevant
risk registers, which cover current and emerging risks. These are assessed and managed by implementing
necessary controls and setting clear objectives and presented to senior leaders annually. In future, we plan to
embed an acceptable residual risk score and formal methodology for climate change risks specifically in our
corporate risk register.

Cyber-security and data protection

Group growth and technological advances, including the introduction of artificial intelligence, mean increased
exposure to malicious attacks to information and the IT estate. As with many businesses, a successful cyber-
attack on Good Energy could result in the Company being unable to operate effectively to serve customers,
incurring significant damage to our IT estate or the loss of critical business and customer data; all resulting in a
reputational and financial impact.

To manage this, Good Energy continually assesses its security policies, standards and procedures, adjusting
them so they are proportionate to the threat profile the Company faces. The Company trains all staff annually
on cyber security and potential threats; as well as ensuring there are subject matter experts to actively
monitor risks and technical vulnerabilities using a wide range of tools, including the National Cyber Security
Centre, which provides weekly updates on the cyber threat landscape and security scanning software.

Good Energy promotes diligence when it comes to collecting and processing customers’ personal information.
All employees complete data protection and information governance training as part of their induction
and ongoing employment to ensure a consistent approach to maintain a high level of personal information
security. The Good Energy Data Protection Officer works collaboratively with all areas of the business to
ensure customer data is not put at risk and that processes remain aligned to best practice in this area.

Health and Safety

Risks to the health and safety of Good Energy Group employees has changed due to the fact that we now
install heat pumps and solar panels. Our Sustainability and Facilities Manager ensures that risk assessments
are completed, controls are implemented and incidents are investigated and reported as appropriate. This
robust approach means that while health and safety is an inherently high risk to Good Energy, the residual risk
remains low.

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TCFD key:

Strategic Report

Key performance indicators

Good Energy measures its progress against a number of key performance indicators (KPIs)
that align with our business.

Operating margin (%)1

Measures profitability as a proportion of
revenue after operating costs

In future we aim to start tracking multiple
products per customer to reflect the full suite
of services we now offer. Futher detail about
the factors driving KPI performance is set out
in the Chief Executive, Financial and Operating
Reviews within this Strategic Report.

EBITDA and carbon avoided were measured
as KPIs in 2022. Carbon avoided in the year is
explained on page 16 and has been replaced
as a KPI with Which? Eco provider and
Employee Engagement to balance the financial
and non-financial KPIs. EBITDA is considered a
less relevant KPI following the sale of the Group’s
generation assets in 2022.

Profit before tax (£m)2

307%

Cash & cash equivalents (£m)

69%

Measures profitability before payment of
corporation tax

Measures the un-restricted cash and cash
equivalents held by the business at a point in time

Total customer relationships (000’s)

33%

Trustpilot rating

Measures domestic, business, FiT supply and
Zapmap registered users

Measures customer satisfaction reviews
Good Energy receives

Which? Eco provider status

100%

Employee Engagement3

100%

Retention of our Which?
Eco Provider ranking

2021-2023

Measures employee engagement through
Best Companies or equivalent accreditation.

2022

2023

1 Reflects continuing underlying operations
2 2022 PBT was £9.2m but included a one-off revaluation benefit of £7.8m associated with Zapmap.
3 We started measuring employee engagement with Best Companies in 2022.

Good Energy Annual Report 2023-1.0-0.50.00.51.01.52.02.53.020212022202302468102022202320215.79.22.61.4020040060080010001,2002021202220230510152025303540202120222023012345202120222023Operating review

Wholesale energy market conditions

Whilst the UK gas and power markets remained volatile in 2023, there was a strong bearish trend with day
ahead gas and power contracts losing 48% and 59% respectively. Demand remained relatively subdued, as
we witnessed a second consecutive mild winter, with 2023 being confirmed as the world’s warmest year on
record. LNG supply to Europe improved as the US LNG terminal Freeport returned to operations in March, after
having been closed since June 2022 due to an explosion. Competition for LNG supply was also limited owing
to lower demand in Asia due to the lack of extreme weather, and a slower than expected Chinese economic
recovery following the end of Covid restrictions.

The UK power mix saw a shift in 2023, with wind generation increasing to supply 26% of the UK’s power
requirements, compared to 24% in 2022. There were also higher imports through the interconnectors,
increasing from 6% to 14% of the UK power mix, aided by additional interconnector capacity along with a 24%
increase in French nuclear output.

Overall, UK gas consumption was 12% lower, with the biggest reductions seen from industry, along with power
generation due to the increase in renewables and imports. Reductions in UK electricity supply volumes were
lower at 2%.

Renewable supply business.

Cash collections
Cash collections through 2023 remained strong, despite significant regulatory pressure around domestic
collection, in addition to continued economic pressures around inflation and the cost-of-living crisis.

We continued to see rapid speed to cash from key accounts and larger business supplies, further
demonstrating our ability to manage large and complex billing portfolios and broker relationships. We also saw
significant reductions in SME debt, with aged debt reducing by 25% in the year.

Direct debit collections remained healthy through the year, with consistent payments made in line with
consumption changes.

Business
Total business supply meters fell by 27% to 5,592. The decline is part of our ongoing right-sizing of our business
portfolio to align with the energy services strategy. In the same period, business supply volumes only reduced
by 15%, reflecting an increase to the average customer on supply from 59MWh (2022) to 67MWh (2023).

Domestic
We remain committed to ensuring that we offer a fair priced, transparent 100% renewable
electricity proposition.

Services business

Feed in tariff (FiT)
FIT administration provides the foundation of our energy services model. Despite the FIT scheme closing to
new entrants in March 2019, we continue to administer the scheme for domestic and business customers.

Customer numbers increased 1.5% to 182,982 (vs 180,300 in 2022).

Smart meters
58.4% of Good Energy domestic customer meters are now smart, amounting to 47,000 meter installations. We
made strides in improving the health of our domestic smart meters, which is crucial for enabling our smart
enabled tariffs like Solar Savings, Power Pause and our EV tariff, and the accurate communication of meter
readings.

Solar installations
The Company acquired Wessex ECOEnergy in June 2023. Revenue from the business in 2023 was £2.1m.

Heat pump installations
Revenue from heat pump installations in 2023 was £0.96m, strengthening into the second half of the year as
marketing spend increased and buoyed by the enhanced government Boiler Upgrade Scheme grant which
was introduced in October.

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TCFD key:

Strategic Report

Chief Financial Officer’s review

Overview

The Group has delivered solid financial results for
2023 and holds a strong balance sheet to invest
in the future of the business. The performance in
2023 provides a good springboard to move into
2024 and beyond with a more diversified business
encompassing both supply and increasing levels of
service income.

Financial performance

Profit and loss
Revenue increased 2.4% in the period to £254.7m
(2022: £248.7m) driven by increased tariffs reflecting
the high commodity cost environment present at
the start of 2023. Cost of sales decreased by 3.8%
to £210.5m (2022: £218.8m) with commodity costs
ending 2023 materially lower than when the year
started. Both cost of sales and revenue are expected
to be significantly lower in 2024 reflecting lower
wholesale costs and associated tariffs in the supply
segment of the business.

Reported gross profit increased 47.9% to £44.2m
(2022: £29.9m). Gross margin increased to 17.4%
(2022 12.0%). The increase reflects a strong H1 2023
when low margins seen in 2022 were recovered as
tariffs caught up with the wholesale cost rises seen
in 2022. 2024 is expected to see a return to more
normalised supply segment margin levels.

Total administration costs increased 32.6% to £37.3m
(2022: £28.1m). This increase relates to a £1.7m year-
on-year growth in expected credit loss provisioning,
alongside £4.2m investment supporting the expansion
of the services business, this includes the operating
cost of Good Energy Works for a full year, alongside 6
months of Wessex ECOEnergy. Other factors include
a £1.25m contribution to Ofgem's voluntary redress
fund and inflationary pressures experienced by all
businesses during 2023.

Net finance income grew from £0.3m to £0.6m
reflecting higher interest rates on offer for cash
available to be placed on deposit.

Reported profit before tax of £5.7m compares with an
underlying PBT of £1.4m in 2022 reflecting recovery of
margins in 2023. (2022 PBT was £9.2m but included a
one-off revaluation benefit of £7.8m associated with
the Zapmap business)

2023 tax charge is £2.8m versus 2022 which was a
tax charge of £0.6m. 2022 included the impact from
one-off benefits related to generation business sale.

The reported profit for the period was £2.9m (2022:
£8.6m). Whilst underlying business is materially
stronger in 2023, the non-repeat of the 2022 increase
in value of the investment in Zapmap alongside a
higher tax obligation in 2023 drive a lower profit after
tax return.

The Group has delivered
solid financial results for 2023
and holds a strong balance
sheet to invest in the future of
the business.

Rupert Sanderson

Chief Financial Officer

26 April 2024

Good Energy Annual Report 2023S
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Financial bridge 2022 to 2023

Cash flow and cash generation
There was a net increase in cash of £16.9m, which
includes the acquisition of Wessex ECOEnergy in
June 2023.

Cash and cash equivalents at the end of December
2023 were £41.3m, with a further £5.9m held in
security and restricted deposit accounts. Within
the cash and cash equivalents balance are £13.9m
of customer credit balances (2022: £4.9m). These
balances have grown materially in 2023 as a result
of rapid increases and then decreases in wholesale
costs and associated tariffs. These credit balances
are expected and planned to fall to a more normal
level in 2024 and the company is taking proactive
steps to reduce this credit position.

Funding and debt
Our business is debt free on a net basis.

The remaining Good Energy Bonds II amount
outstanding including interest is £4.9m split £0.2m
within short term liabilities and £4.7m within long term
liabilities. This is due to an annual redemption request
window for bondholders in December of each year.

The Group continues to maintain capital flexibility,
balancing operating requirements, investments for
growth and payment of dividends. Our business
remains mindful of the need to capitalise on strategic
business development and investment opportunities.
Prudent balance sheet management remains a
key priority.

Earnings
Reported basic earnings per share reduced to 17.1p
(2022: 55.7p). Whilst underlying business is materially
stronger in 2023, the non-repeat of the 2022 increase
in value of the investment in Zapmap alongside a
higher tax obligation in 2023 drive a lower profit after
tax return.

Dividend
Following strong operational performance in 2023,
and reflecting our confidence in the ongoing business,
the Board recommend a final dividend for 2023 of
2.25p per ordinary share (2022 2.0p).

Good Energy continues to operate a scrip dividend
scheme and the payment timetable of the final
dividend will be announced in due course.

Expected Credit Loss (ECL)
ECL charge in the year was £5.6m, this is an increase
of £1.7m (2022: £3.9m). This increase relates to a year
on-year growth in expected credit loss provisioning
largely reflective of higher average consumers bills
across the 2023 period.

The main impact of the year is elevated tariffs.
Revenues have significantly increased but this has
been partially offset by Government support
schemes reducing the impact of higher prices on
end customers.

Strategic Report

363 6 Good Energy Annual Report 2023

Good Energy Annual Report 2023Governance Report

Board of Directors

Governance & Directors’ Report

Audit and Risk Management Report

Nomination and Remuneration Report

Independent Auditors’ Report

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Governance Report

Board of Directors

William (Will) Whitehorn
Chair (Independent)

Nigel Pocklington
Chief Executive Officer

Responsibilities

CEO

Skills and experience

Will focuses on fast-moving and growing companies,
with extensive experience across a broad range of
sectors, but especially in technology, digital
and branding.

Will currently holds a number of other non-executive
roles across a range of companies including at
Seraphim Space Investment Trust PLC. Will currently
sits on the UK Space Agency’s Space Exploration
Advisory Committee and he is also Chair of
Craneware PLC. Will intends to step down from
space technology company AAC Clyde Space AB of
Sweden in May 2024.

Since joining Good Energy, Nigel has led the
company’s successful navigation of the energy
crisis, and its repositioning as an innovative provider
of services to homes and businesses making the
energy transition.

Nigel is a widely experienced senior executive
with a strong commercial, digital, and operational
track record spanning over 25 years. He most
recently served as Chief Commercial Officer of
Moneysupermarket Group plc. Prior to this, he held
senior roles at Expedia Inc., including President of
eBookers and Chief Marketing Officer of Hotels.com.

Will spent more than 20 years with Virgin Group,
where he played a key role in founding several Virgin
businesses including Virgin Rail and Virgin Galactic
and was special advisor to Sir Richard Branson.

He spent a decade of his early career at Pearson plc,
including a period leading the digital operations of
the Financial Times. He holds an MA and M.Phil from
Oxford University and an MBA from INSEAD.

As chair of the Board and a member of the
Nominations and Remuneration Committee, Will has
stewarded and guided Board discussions.

Joined Board

July 2018

In August 2023 Nigel joined the Board of Mobico
plc, a leading international transport operator, as
a Non-Executive Director. Nigel has also been
a Non-Executive Director and remuneration
committee chair at Kin + Carta plc, a global digital
transformation business focused on helping make
the journey to becoming a digital business tangible,
sustainable and profitable and stepped down in April
2024.

Joined Board

May 2021

Good Energy Annual Report 2023

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Rupert Sanderson
Chief Financial Officer

Fran Woodward
Chief Operating Officer

Responsibilities

CFO

Responsibilities

COO

Skills and experience

Rupert joined Good Energy in February 2017 and
is responsible for all finance and trading matters,
including managing our financial stakeholders.

Fran joined Good Energy in 2014 and oversees Sales,
Energy Origination, Marketing, Customer Operations
and the People and Culture functions.

Having worked widely in larger support services and
energy organisations as well as in supporting smaller
organisations through growth programmes, Rupert
brings valuable experience to Good Energy as it
develops its services and propositions.

His previous roles include senior financial and
commercial positions at Centrica, British Gas, Serco
and Avis Europe.

Rupert began his career as an accountant for
PwC and is a Fellow of the Institute of Chartered
Accountants in England and Wales.

Joined Board

January 2020

She has over 25 years leadership experience from a
breadth of organisations including Marks & Spencer,
Legal & General, Coca-Cola, Dyson and EDF. Fran
ensures the customer is at the heart of Good
Energy’s strategy, culture and its operations, drawing
on her early career in retail and consumer goods,
and on multiple senior HR and transformation roles.

Under Fran’s leadership Good Energy’s operations
team has achieved outstanding customer service,
with industry leading 5 star Trustpilot scores. Her
experience has been invaluable in ensuring the
smooth integration of newly acquired businesses
to the Good Energy group. Fran’s commitment to
creating a high performing trust-based culture saw
Good Energy named as the UK’s 17th best large
company to work for in 2023.

Fran is a graduate of Oxford University, a Chartered
Member of the Institute of Personnel and
Development, sits on the CBI South West Regional
Council and is a governor of Falmouth University.

Joined Board

October 2023

Governance Report

Board of Directors

Timothy (Tim) Jones
Independent Non-Executive Director

Emma Tinker
Independent Non-Executive Director

Responsibilities

Skills and experience

Tim is a Technology Executive, Advisor and Angel
Investor who brings 25 years of digital innovation,
execution and operation experience to the Board.

He is a former executive of Moneysupermarket
Group plc where he was CIO for 7 years and a co-
founder and former executive at AutoTrader UK. Tim
is the founder and CEO of Disrupt Club, a specialist
digital advisory firm.

Tim is a chartered engineer (CEng) and chartered IT
professional (MBCS CITP) with a depth of experience
in leading digital transformation and commercial
growth; both scaling early stage companies and
the formation and leadership of highly performing
teams in established organisations. Tim has extensive
experience in delivering innovative consumer
propositions in various online sectors such as retail,
automotive, travel, marketplace and the highly
regulated insurance, financial services, energy and
telecommunications markets.

Tim was appointed Non-Executive Director in
December 2017 and is a member of the Audit
and Risk and Nominations and Remunerations
Committees. Tim has brought valuable expertise to
bear in guiding the development of Good Energy’s
technology teams as well as advising on the
development of new products and services and the
businesses strategic investment in Zapmap.

Joined Board

December 2017

Emma is a private equity investment Director who
brings a wealth of investment experience. She is a
Director of numerous renewable energy companies,
established the renewable energy business at HG
Capital in 2002 and founded Asper Investment
Management in 2016 as the spinout of that business
where she is Chief Investment Officer. She has
been a Director for renewable developers and
independent power producers, working across a
range of renewable technologies.

Emma has substantial commercial experience
spanning the entire lifecycle of investments in energy
businesses, and has worked across a range of
renewable technologies. Emma is also a Director of
the Gardeners’ Royal Benevolent Society.

As well as being the Chair of Good Energy’s
Nominations and Remuneration Committee and
being a member of the Audit and Risk Committee,
Emma has provided invaluable advice and support
to the strategic acquisitions of Wessex ECOEnergy
Limited and JPS Renewable Energy Limited.

Joined Board

September 2016

Good Energy Annual Report 2023

Nemone Wynn-Evans
Independent Non-Executive Director

Responsibilities

Skills and experience

With extensive experience in financial services,
Nemone brings skills across audit, risk management,
business development, corporate finance, corporate
governance, investor relations and marketing.

Nemone is currently Board Chair at the Shepherds
Friendly Society. She also holds several roles across a
range of companies, including as Chair of the Board
at the Hinckley and Rugby Building Society, and as a
Non-Executive Director at the Income and Growth
Trust VCT plc, managed by Gresham House Ventures,
where she chairs the Audit Committee. She is also a
Fellow of the Chartered Institute of Securities
and Investments.

As well as Chairing Good Energy’s Audit and Risk
Committee, Nemone has played an integral role
providing corporate governance advice, support
to Good Energy’s finance team in particular in
relation to the preparation of financial statements
and risk oversight.

Nemone began her career in the City of London and
has worked with many listed PLC and PRA/FCA/FSA
regulated companies, having acted as a Finance
Director on the main Board of a stock exchange.

Joined Board

February 2019

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Governance Report

4141

Governance Report

Governance & Directors’ report

Overview

Good Energy is committed to high standards of
corporate governance and places good governance
at the heart of the business. In July 2018, the Board
formally adopted the Quoted Companies Alliance
code of corporate governance (“the Code”) in line
with requirements of the London Stock Exchange’s
Alternative Investment Market (“AIM”) Rules. The
Board believes that the Code provides a rigorous
corporate governance framework to support the
business and its success in the long-term.

The Code was recently updated, with changes to
take effect for financial periods commencing on or
after 1 April 2024. This report relates to a previous
financial period and therefore, while the Company
is mindful of the evolving Code requirements, it has
been prepared by reference to the then applicable
Code. The Company is currently undertaking an
impact assessment to assess any changes that
may be required to ensure that the Group meets
the expectations of the updated Code for future
reporting periods and an update will be provided in
the next annual report.

The Code sets out 10 corporate governance
principles. The ways in which Good Energy meets
these principles is described in the following sections
and incorporates information about the ways in
which the Board discharges its duties under s172
of the Companies Act 2006. The fully integrated
s172 statement is available on pages 24 to 29. This
governance report is also available to view on our
website at goodenergy.co.uk/investors/corporate-
governance-code.

1. Establish a strategy and business
model which promote long-term value for
shareholders

Good Energy is a different kind of energy company,
powering a cleaner, greener future. We make it
simple to generate, use and share renewable energy
and have set ourselves the objective of delivering
everything needed for a greener home or business.

The Board considered the long-term interests of
Good Energy’s stakeholders and set a course which
aligns those interests with those of the Company,
promoting the long-term interests of the Company
and long-term value for all its shareholders.

Good Energy is well positioned to deliver long-term
value for all shareholders through the implementation
and delivery of its strategy to become the micro
generation specialist, focusing on:

Energy services: Heat pump, solar and storage
installation, export tariffs and the Feed in Tariff
administration.

ownership of the UK’s largest mapping platform
Zapmap.

•

Renewable supply: Serving around 90,000
business and domestic customer with renewable
supply and a range of smart import energy tariffs.

Good Energy continually reviews and aligns its
business model to better enable delivery of its
strategic ambitions. We have engaged our people
through ongoing communication, using multiple
channels to reinforce the pioneering, agile culture
that enables Good Energy to continue to innovate
and drive change.

For an update on the excellent progress made in
pursuit of this strategy, read our strategic review on
pages 10-12.

Read more about our business model on pages
8-9.

2. Seek to understand and meet shareholder
needs and expectations

The Company is proud to have a diverse shareholder
base, including a significant proportion of private
shareholders (many of whom are also Good Energy
customers) and other long-term investors. The Board
seeks to understand the needs and expectations of
its stakeholders, particularly shareholders, through
insight gained from regular customer surveys and
focus groups, periodic investor surveys and obtaining
structured feedback from investor roadshows. Good
Energy’s strategy responds to the insight gained
through these consultations.

Good Energy provides all shareholders and other
stakeholders with relevant information in a timely
and balanced manner and meets with its largest
shareholders periodically to understand their views
on Good Energy’s performance and future plans.
In addition, a comprehensive Investor Relations
programme is undertaken to increase engagement
and education of current shareholders as well as
attendance at multiple speaking events to promote
awareness of the Company to new potential
shareholders.

The Company actively encourages all shareholders
to participate in its AGM as an opportunity for all
shareholders to share their views openly with the
whole Board and other shareholders.

Read more about our stakeholder engagement and
the impact of it in the year, in our integrated s172
statement on pages 24-29 and in principle 10.

3. Consider wider stakeholder and social
responsibilities and their implications for
long-term success

Transport: Making it simple to own, drive, power
and pay for an electric vehicle through its 49%

The Board recognises its primary legal responsibility
to promote the success of the Company for the

•

Good Energy Annual Report 2023
benefit of its members as a whole, taking into
account the interests of other stakeholders
including customers, employees, partners,
suppliers, regulators, the environment and the local
communities in which Good Energy operates.

Purpose-led from the outset, Good Energy
continues to prove that the “other way” is better:

• Achieving “World Class Employer” accreditation
for the second year running and ranked the
17th best large employer in the UK by Best
Companies.

• Which? magazine’s latest ranking of green

energy suppliers saw us top the league table
for the third year running. The research
from Which? rates energy companies on
sustainability, awarding Good Energy the
highest score and Eco Provider badge.

• We have long-term power purchase

agreements with our community of over 2,000
independent UK generators, buying power
directly from them and using it to match every
kWh customers use.

•

Following the acquisition of Wessex ECOEnergy
Limited in July 2023, we are engaging with the
programs run by industry bodies Solar Energy
UK and SolarPower Europe, to ensure that
we only source products from partners who
represent acceptable levels of risk and are
themselves engaged in improving standards
across the industry.

• We were named “best green electricity supplier”
and one of the UK’s most ethical companies
of the last 25 years by Ethical Consumer
Magazine.

• Our ‘Excellent’ 4.8 rating on TrustPilot,

accredited by customers.

• We are also proud to have been an accredited

Living Wage employer since 2015.

Establishing the right culture is an integral part
of delivering Good Energy’s strategy, in which
employees are key internal stakeholders within
the business and developing its culture.

Read about our Best Companies accreditation on
page 26.

Read more about our wider stakeholder
engagement on pages 24-29.

4. Embed effective risk management,
considering both opportunities and threats,
throughout the organisation

Good Energy recognises that effective enterprise
risk management is critical to enable it to meet its
strategic objectives.

We have a clear framework for identifying and
managing risk, at a tactical, operational and
strategic level and a dedicated Information
Governance, Risk and Compliance Team. Our risk
identification and mitigation processes have been
designed to be responsive to the rapidly changing
environment in which we operate. The impact of
emerging risks on the Good Energy’s business model
are also considered and used to make informed
decisions, including as to the delivery and evolution
of our strategy.

We believe the Group is well positioned to mitigate
these principal risks through a combination of our
risk management processes, our control activity and
the strategic direction we are pursuing.

The Board embeds effective risk management and
remains ultimately accountable. The Audit and Risk
Committee provide updates at every Board meeting
in addition to regular reviews of the corporate risk
register and the Company’s risk appetite.

Risk management training courses which include
climate-related risks, are held for all senior leaders,
with instructions on how to identify, measure, control
and manage risks. The training consists of e-learning
and two workshops, which are mandatory for senior
leaders across Good Energy Limited and our heat
pump installation business and optional for the rest
of the Group.

Read more about our principal risks on pages 30-31
and more on risk management and controls in the
Audit and Risk Committee Report on pages 54-56.

5. Maintain the Board as a well-functioning,
balanced team led by the Chair

The Board currently comprises three Executive,
the Chair and three Non-Executive Directors
as described on pages 38 to 41. The roles and
responsibilities of the Chair, Non-Executive Directors,
Executive Directors and the Company Secretary are
clearly defined and regularly reviewed.

Details of current roles and responsibilities are set
out in the table overleaf. The Board meets at least
four times a year with ad hoc meetings taking place
as required. For Board meetings, the management
team submit reports for consideration and the
Board has a formal schedule of matters reserved to
it. The Board has access to the company secretarial
team and is able to take independent advice in the
furtherance of duties if necessary.

The Board is aware that the latest version of
the Code, for application to financial periods
commencing on or after 1 April 2024, anticipates
that shareholders could be offered an opportunity
to vote annually on the election of individual
directors. At present the Company requires one
third of directors to retire by rotation and be re-

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elected by shareholders. The Board is confident in the independence of the Non-Executive Directors and will
consider the application of this principal of the Code in future reporting periods. See page 49 for more details
about Director independence.

The Nomination and Remuneration Committee discusses time commitments from Directors, particularly Non-
Executive Directors. Over the reporting period Non-Executive Directors spent 20-25 days with Good Energy,
the latter if they are Chair of a Committee.

The Board

Role of the Board

Chair
William Whitehorn

•

Setting Group strategy and
objectives in collaboration
with the Executive.

Providing leadership, knowledge and
experience to support and guide
the Executive.

Engaging with all shareholders.

•

Overseeing and monitoring business
performance, internal controls,
corporate governance and
risk management.

Oversight of principal risks – including
competitive position, political risk and
programme delivery.

Effective running of the Board
and its Committees in accordance
with principles of good
corporate governance.

• Managing the Board to ensure
adequate time is allocated at
Board meetings for discussion of
all agenda items.

•

Setting the Board agenda.

•

Ensuring the Board receives
accurate, timely and
clear information.

Non-Executive
Directors

•

Providing knowledge, skills and external experience to challenge the Company’s
management team and independently advise the Chair and the Executive.

Chief Executive
Nigel Pocklington

• Overseeing the day-to-day

•

operation of the Group’s business.

• Developing and implementing

Establishing and maintaining
formal and appropriate
delegations of authority.

the Group’s strategy as approved
by the Board.

• Maintaining a close working

relationship with the Chair.

Chief Financial
Officer
Rupert Sanderson

•

Overseeing Financial Reporting,
Trading, Legal. Compliance and Risk,
Regulatory Affairs and Procurement.

• Maintaining a close working

relationship with the Chair of
Audit and Risk Committee.

• Overseeing and managing

financial resources for the Group
and its subsidiaries.

Chief Operating
Officer

Fran Woodward

• Overseeing Sales and Energy

Origination, Marketing, Customer
Operations and the People and
Culture functions.

• Overseeing and managing Company
operations for the Group and its
subsidiaries.

• Maintaining a close working

relationship with the Chair of
Nomination and Remuneration
Committee.

Company Secretary

•

The Board and each Director has
unlimited access to the Company
Secretary.

•

Providing governance, advisory and
administrative support to the Board
and its Committees.

• Acting as Secretary to the Board and
its Committees, ensuring compliance
with Board procedures and
corporate governance requirements,
Directors’ induction and ongoing
training requirements.

Good Energy Annual Report 2023
Other information:

•

The roles of Chair and Chief Executive have always been split with the Chair acting in a
non-executive capacity.

The Executive Directors are accountable to the Board for the operating and financial performance
of the Group.

The Board is responsible for approving the appointment of Executives, setting Executive remuneration
and devising incentive programmes, agreeing financial and accounting policies and ensuring that all
shareholders are properly informed about the state of the businesses. In addition, the Board is responsible
for the appointment and removal of the Company Secretary.

• At the end of the reporting period, the Board comprised the Chair, Chief Executive Officer,

Chief Financial Officer, Chief Operating Officer and three Non-Executive Directors. The Board considers
that the Non-Executive Directors as a unit play an important role in ensuring that no individual or group
dominates the Board’s decision making.

•

The Board does not consider that the appointment of a Senior Independent Director is appropriate at this
time due to the small size of the Company and the Board.

The Board has constituted two Committees: Audit and Risk and Nomination and Remuneration. Both
Committees comprise only independent Non-Executive Directors.

• All current Directors hold shares in the Company with the exception of the Chief Operating Officer,

although the Company does not require them to do so.

6. Ensure that between them the Directors
have the necessary up-to-date experience,
skills and capabilities

The Board is satisfied that, with the addition of the
Chief Operating Officer in October 2023, it has an
appropriate balance of skills and experience as well
as an appropriate balance of personal qualities and
capabilities to deliver the Company’s long-term
strategic objectives.

The Board acknowledges that the implementation of
the Company’s strategy to deliver installation services
will require it to continually reassess the composition
of its members and the likely evolution of the blend
of skills and experience required to ensure that it can
support the business.

The Board regularly reviews its composition and
that of its Committees to ensure it has access to
diverse perspectives and the necessary up-to-date
experience, skills and capabilities to discharge its
duties effectively.

The Nomination and Remuneration Committee also
works to ensure the right balance of skills, knowledge
and capabilities on the Board. Changes are made to
the composition of the Board and its Committees to
ensure the right balance of complementary skills and
capabilities for Good Energy’s strategic direction.

The Board also reviews the length of time each
Director has served on the Board and assesses
if contributions made by each Director remain
effective. Details of the Director’s gender diversity,
balance of Executive and Non-Executive Directors
and Non-Executive Directors tenure can be
found below.

The Board receive routine updates on industry,
regulatory and legal developments from the
business and its advisers in addition to the Company
Secretarial team who arrange any required training.
The Board have access to additional resources and
events held by external bodies such as the QCA.

The Board continues to have briefings on a variety
of topics including developments in corporate
governance and appropriate handling of personal
data, insight from shareholders, customers and staff
on their views and expectations of Good Energy
as well as formal briefings from the Company’s
nominated adviser on updates to the AIM rules
and other capital markets matters.

Procedures are in place to enable individual Directors
to seek independent and/or external advice at the
expense of the Company.

Read more about the Board of Directors on pages
38-41.

Read more about the Nomination and Remuneration
Committee on pages 57-64.

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7. Evaluate Board performance based on clear and relevant objectives, seeking
continuous improvement

The Board conducts an annual performance review process to assess its effectiveness, as well as that of its
Committees and the individual Directors, to drive its continuous improvement.

The Board undertook an externally facilitated evaluation and review to assist in the facilitation of
communication between the Board and the Executive team. The process is described in more detail
on page 52.

8. Promote a corporate culture that is based on ethical values and behaviours

The Board recognises the importance of its role in promoting and monitoring the Group’s desired culture and
ensuring it is consistent with its long-term strategic objectives.

Good Energy’s core values are to be fair, straightforward, inclusive and focused. See more about how we work
on the next page.

We are committed to acting ethically in all our business relationships and expect the same high standards
from our suppliers and other business partners. We communicate our policies internally and externally, to
support all relevant stakeholders to uphold our values. Our recently acquired companies have values that
aligned with Good Energy which was important in decision making during the acquisition process to ensure
our deeply embedded ethics run throughout the entire Group. Read more about the acquisitions that have
been made on pages 10-12.

Our Modern Slavery Act statement can be found on our website goodenergy.co.uk/modern-slavery-act, setting
out our commitment to minimising risks of forced labour within our company and supply chain.

Our Code of Good Conduct is core to providing a positive customer experience, and is reviewed and updated
if necessary annually as the Group continues to evolve. It is accessible on the company intranet, with an online
learning module provided to all employees as part of their induction. Good Energy’s Code of Good Conduct
reflects the Board’s duties under the Companies Act 2006, s172.

Our Code of Good Conduct:

• Covers seven themes which underpin our

customer-centric approach: IT Security,
Operating with Integrity, Whistleblowing, Valuing
our People, Expenses, Information Governance
and Procurement.

•

Provides a framework to empower Good Energy
employees to make informed decisions that are
in the best interests of the Company, its
customers and other stakeholders;

Reflects the environment in which the
Company operates;

• Mitigates risk;

•

Explains where our employees can get advice
including where to access our company
policies; and

• Demonstrates the Group’s commitment to

working with honesty, respect and transparency.

Good Energy Annual Report 2023Promoting an inclusive and fair culture

We value people’s differences in creating a more productive and innovative organisation with an engaged
workforce. The Group’s employment policies follow best practice in terms of equal opportunities for all
employees, irrespective of race, gender, nationality, sexual orientation, disability, marital status, religion or
age. This includes making reasonable adjustments during the hiring process and to working practices to
accommodate the needs of people who are disabled or become disabled during employment with
Good Energy.

Formal and informal flexible working requests are open to everyone. To further support the diversity of our
workforce, our team of employee Inclusion Champions help shape our diversity and inclusion initiatives. See
page 57 for details. In 2023, we opened up more hybrid and remote roles to broaden our recruitment pool.

Finally, we conduct regular Pulse surveys on issues affecting our workforce, to make sure everyone
can share their experiences. We also carry out annual employee engagement surveys using the
Gallup approach.

How we work

Focused

Inclusive

Straightforward

Fair

Flexible working

Employees involved in our Champion groups: 41

Internal Engagement Survey
outcomes from March/April 2023

41% of roles are hybrid
(between home and office)

59% of roles are remote

8.5% of roles are part time

Mental Health
First Aiders

Inclusion

Culture

93%

I would recommend working
at our company with others

88%

The mission or purpose of
my company makes me
feel my job is important

Our gender pay gap report is set out on our website at goodenergy.co.uk/reports-and-policies and our section
172 statement is available on pages 24-29.

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9. Maintain governance structures and processes that are fit for purpose and support good
decision-making by the Board

Good Energy’s governance structures support its corporate culture and are appropriate to its stage of
development and the complexity of the business. The Board has established a Nomination and Remuneration
Committee and an Audit and Risk Committee to support effective governance and decision-making.

The Board’s Committees

Nomination and Remuneration Committee

Audit and Risk Committee

Board Composition

Corporate Governance

Succession planning

Financial Reporting

Board nominations

Internal Controls

Remuneration policy

Risk Management

Incentive design and target setting

External Auditor

Executive remuneration review

Oversight of principal risks

The key areas for focus for the Committees are listed above.

The Board continuously monitors the effectiveness of its governance structures, enabling them to evolve over
time to support Good Energy’s growth and development.

10. Communicate how the Company is governed and is performing by maintaining a
dialogue with shareholders and other relevant stakeholders

Good Energy welcomes dialogue with shareholders, particularly the need for open communication on the
Company’s strategy, and takes care to calibrate perspectives expressed by individual members in the context
of Good Energy’s members as a whole.

Principal communications with all shareholders are conducted through the Annual and Interim results, AGM
and periodic RNS announcements on key business developments. Good Energy supplements its Annual and
Interim results with presentations to analysts and other interested stakeholders (all available on its website)
and meets with larger shareholders at least twice annually to discuss both performance and governance, as
well as our future plans and one to one meetings. The Board actively encourages shareholder participation
at its Annual General Meeting and general meetings. Since 2020, Good Energy have used the Investor Meet
Company platform enabling all shareholders to interact with the CEO and CFO at key financial events.
Engagement levels can be viewed on page 27 of the s172 statement.

Good Energy’s Investor Relations team supports effective communications with shareholders and other
investors and can be contacted at: investor.relations@goodenergy.co.uk. In addition, there is a dedicated
group website at goodenergy.co.uk/investors and an option to sign up to investor related alerts.

The Board also recognises the importance of maintaining effective engagement with other stakeholders and
taking into account the interests of internal and external stakeholders when making decisions. Examples of
ways in which Good Energy maintains active communication with other stakeholders are described in our
section 172 statement on pages 24-29 of the strategic report.

TCFD key:

Good Energy Annual Report 2023Independence of the
Non-Executive Directors

The Board conducts an annual review of the
independence of the Non-Executive Directors taking
into account any factors that might, or could appear
to, affect a Director’s judgement and, therefore,
their independence, and considers all three of its
Non-Executive Directors to be independent in both
character and judgement.

The Chair, Will Whitehorn, was independent upon
appointment to the Board in July 2018.

Directors’ Conflicts of Interests

Directors have a statutory duty to avoid situations in
which they have, or could have, interests that conflict
with those of the Company, unless that conflict is
first authorised by the Board. The Company’s Articles
allow the Board to authorise any potential or actual
conflict of interest that a Director may have and a
process to identify and deal with any such conflicts
is in place. Should a Director become aware that
they, or their connected parties, have a new potential
or actual conflict of interest, they must notify the
Board. The Board then deals with each conflict on
its merits, taking into consideration all the relevant
circumstances. All potential and actual conflicts
approved by the Board are recorded in a Register
of Interests, which is reviewed by the Board at each
Board meeting.

Directors’ Indemnities and Insurance

As permitted by the Company’s Articles of
Association, the Directors have the benefit of
an indemnity which is a qualifying third party
indemnity provision as defined by Section 234 of the
Companies Act 2006. The indemnity was in force
throughout the last financial year and is currently in
force. The Company also purchased and maintained
throughout the financial year Directors’ and Officers’
liability insurance in respect of itself and its Directors
and Officers.

The Board and its Committees

The Board is ultimately responsible to all shareholders
for the direction, management and performance
of the Company and its business.

Biographies of the Board’s Directors are set out on
pages 38-41. Details of the Directors’ remuneration,
including share options, are set out in the Nomination
and Remuneration report on pages 61 and 64.Details
of the Directors’ interests in ordinary shares in the
capital of the Company are set out on page 66 under
Statutory and other information.

The Board maintains a list of matters reserved for
its approval, generally being items which affect the
shape, risk profile or strategic direction of the Group,
as well as the key financial items. The Board reviews
this annually and it is updated as necessary.

The Board has established two principal committees
which focus on particular areas as set out on page
48. The Chair of each Committee reports to the
Board on its activities after each Committee meeting.
Reports from each Committee are included later in
this section.

Matters that are not reserved to shareholders, the
Board or one of its Committees are the responsibility
of the Executive Directors who have established and
maintain a documented schedule of delegations
of authority to members of the Executive and
other management. This delegation of authority is
incorporated within Good Energy’s Code of Good
Conduct and includes a detailed authorisation matrix
covering financial limits and approvals needed when
conducting business on behalf of the Group. The
delegation of authority is regularly reviewed.

Board and Committee Changes

As part of its annual performance review process
and otherwise as required, the Board reviews its
composition to ensure that the Group has access to
a balance of complementary skills and experience to
enable the Group to achieve its strategic ambitions
and wider purpose.

On 20 October 2023, the Company announced the
appointment of Fran Woodward, Chief Operating
Officer as an Executive Director to the Board. Fran
joined Good Energy in 2014 and is responsible for
Sales and Energy Origination, Marketing, Customer
Operations and the People and Culture functions.
Fran’s full biography can be viewed on page 39.

Read more about the Board of Directors on
pages 38-41.

Read about succession planning on page 52.

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Board and Committee composition

The following table sets out the composition of the Board and its committees as at 31 December 2023:

Board

Audit and Risk
Committee

Nomination and
Renumeration
Committee

–

Nigel Pocklington (CEO)

Rupert Sanderson (CFO)

Fran Woodward (COO)

Will Whitehorn (Chair)

Tim Jones (Non-Executive)

Emma Tinker (Non-Executive)

Nemone Wynn-Evans (Non-Executive)

Chair

Member

– Not applicable/invitation only

Board and Committee Attendance

Name

Executive Directors

Nigel Pocklington

Rupert Sanderson

Fran Woodward1

Non-Executive Directors

Will Whitehorn

Tim Jones

Emma Tinker

Nemone Wynn-Evans2

Board

Audit and Risk
Committee

Nomination and
Remuneration
Committee

9/9

2/2

9/9

8/92

8/9

4/4*

1/1*

4/4*

4/4

3/4

4/4*

1/1*

4/4

3/4

1. Pro-rated for the period of Directorship. Fran Woodward joined the Board effective 20 October 2023.

2. Tim Jones and Emma Tinker were absent from one Board call due to clashes with prior commitments and a short notice meeting being held to provide a specific

approval. They were provided with meeting materials, provided comments and were updated post meeting. Nemone Wynn-Evans was unable to attend December
Board meetings due to bereavement. She reviewed materials ahead of the meeting and provided comments as well as being provided with a full briefing following
the conclusion of each meeting.

*. By invitation only.

Good Energy Annual Report 2023

The Board reviews the operational and financial
performance of the Group for each month against a
pre-agreed set of performance targets. In addition,
the Board receives information through a system
of continuous financial planning which enables it to
better manage profit and cash flow forecasting, and
to inform investment decision making. The formal
financial plan for the forthcoming year is reviewed
and authorised by the Board.

Executive team

An outline of the roles and responsibilities of the Chair,
Chief Executive and, Non-Executive Directors are
provided on pages 44.

As at 31 December 2023, the Executive team
comprised the Chief Executive, Chief Financial
Officer, Chief Operating Officer, Technology Director
and Director of Product and Propositions.

The Executive team is an executive-level forum
of the Group’s most senior leaders, chaired by the
Chief Executive. It comes together to communicate,
review and agree on issues and actions of Group-
wide significance. It helps to develop, implement and
monitor strategic and operational plans, considers
the continuing applicability, appropriateness and
impact of risks, leads the Group’s culture and aids the
decision-making of the Chief Executive and Chief
Financial Officer and Chief Operating Officer in
managing the business in the performance of
their duties.

There are regular forums to provide clearer
governance allowing the Company to strengthen
in good decisions, reduce risks, and review strategic
plans, alongside the Audit and Risk Committee and
the Nomination and Remuneration Committee.
In 2023, monthly forums included the Executive
Committee, Customer and Operations Board, Energy
Board, Works Board and Wessex Board. Sales and
Operations meetings are weekly. 2024 will see
changes to our governing boards to reflect the
transition into energy services and the
acquisitions made.

Operations of the Board

Details of the number of scheduled Board meetings
and attendance of Directors is set out in the table
on page 50. The Group’s performance is reviewed
at these scheduled meetings and the Board is
responsible for agreeing and reviewing the strategy
for the Group, for which it maintains both short term
(twelve months) and longer-term (three to five
years) plans. Given the nature of the business, all
meetings deal with climate-related matters.

In addition, it is responsible for matters relating to
employee recruitment and remuneration, strategy,
health and safety and other specific subject areas.

Where relevant, members of the Executive team and
other senior leaders within the business are invited to
attend Board and Committee discussions. Members
of the Board also engage with members of the
Executive team and other senior leaders directly on
relevant initiatives.

During the year, the Board and relevant Committees
convened a number of ad-hoc proceedings to
support the Group in developing, refining and
implementing initiatives in support of its strategic
ambitions. In addition, the Board or relevant
Committees held regular informal discussions on a
variety of topics to consider the impact of macro-
economic events, developments in Government
policy on the Company, and to provide guidance and
insight to support the Company in delivering its short
term and longer-term objectives.

In September 2023, the Board agreed to change its
approach to its previous annual formal reviews of the
strategy and concluded it would be more appropriate
for a strategy update to be provided at quarterly
board meetings.

Board packs are generally circulated at least
one week ahead of scheduled meetings to allow
adequate time for the Board and/or Committee
Members to review information and prepare. Where a
Director is unable to attend a meeting, the materials
for the meeting are provided to them and subsequent
briefings are provided as appropriate.

The Chair and Chief Executive maintain regular
contact and the Chair receives a briefing from
the Chief Executive before each scheduled Board
meeting. The Chair provides a briefing to the
Non-Executive Directors before each scheduled
Board meeting to align priorities and maximise the
Board’s effectiveness at meetings. The Chair also
regularly de-briefs with the Non-Executive Directors
after meetings to capture feedback and identify
opportunities for improvement. The Executive
Directors do not participate in these discussions.

All Directors have the right to request that any
concerns they have are recorded in the appropriate
Committee or Board minutes.

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Annual General Meeting (AGM)

The Company is pleased to invite all shareholders
to its 2024 AGM. All holders of ordinary shares may
attend the Company’s AGM and pre-AGM online
presentation at which the Chief Executive Officer
and Chief Financial Officer present a review of the
key business developments during the year.

At the meeting, shareholders can ask questions of
the Board on the business of meeting, including the
Annual Report and Accounts and the running of the
Company generally. All Directors are invited to attend
each AGM. Unless unforeseen circumstances arise,
the Chair of each committee will be present to take
questions at the AGM.

The AGM notice will be circulated to members
through their preferred communication methods and
will also be available to view on the Group’s website.

A poll is conducted on each resolution at all
Company general meetings. All shareholders have
the opportunity to cast their votes in respect of
proposed resolutions by proxy, either electronically
or by post. Following the AGM, voting outcomes are
published and are made available on the Group’s
website. Shareholders unable to attend the AGM
can vote on the business of the meeting either by
post or online.

The time and venue for the 2024 AGM will be
announced in the second quarter of 2024.

Good Energy Bonds

On 19 June 2017, the Company announced that it
had raised £16.7m through the issuing of its second
corporate bond. The bond had a four year term,
rolling annually thereafter unless redeemed by the
bondholder. Interest accrues and is payable semi-
annually on the outstanding amount of the bond
at 4.75% per annum (with an additional 0.25% per
annum payable to Good Energy customers).

On 25 May 2021, Good Energy announced the
repayment of 70% (£11.5m) of Good Energy
Bonds II. Since then, the following redemptions
have been requested:

Board and Directors’
Performance Evaluation

The Board has undertaken an externally facilitated
evaluation and review to assist in the facilitation
of communication between the Board and the
Executive team. The facilitation was carried
out by Pecan Partnership Ltd and as part of the
review they undertook confidential interviews with
members of the Board and the Senior Leadership
Team. The outputs of the review were shared with
the Board and discussed in detail. The review
recommended the following areas of focus:

• Content and clarity of board papers.

•

The development of the relationship between
the Board and the Company’s Senior
Leadership Team.

The measurement and consistent monitoring of
KPIs in the business.

The Board has discussed the findings in detail and
will continue to review and monitor the actions
arising from the review.

Succession planning

The Board has reviewed its approach to succession
planning, which includes contingency planning for key
staff (including head of function) and short-medium-
long term planning.

As well as contingency and short-medium-long term
planning, succession planning considers diversity
which applies to all levels and promoting talent across
the business.

Read more about developing our talent in the
Nomination and Remuneration Committee report on
pages 57-58 and on page 26 in the strategic report.

Performance of individual Directors

The individual performance of Executive and Non-
Executive Directors is reviewed periodically. The
cumulative time commitments of Non-Executive
Directors are reviewed as part of the annual
performance review to ensure that no Non- Executive
Director becomes over-committed and is able to
devote sufficient time to the Company to discharge
duties effectively. The Chair’s performance is
reviewed by the Non-Executive Directors, with
input from the Executive Directors and members
of the Executive Team as part of the Board
effectiveness review.

The performance reviews and subsequent
remuneration reviews of members of the Executive
team are discussed at the Nomination and
Remuneration Committee during the first quarter
each year and on an ad hoc basis as required.
Members of the Executive team do not attend
discussions pertaining to their own performance.

Good Energy Annual Report 2023
Repayment Date

Redemptions requested and paid

30 June 2021

30 June 2022

30 December 2022

30 June 2023

£420,750

£169,125

£230,940

£10,500

Further details are available on the Group’s website: goodenergy.co.uk/investors/good-energy-bonds and will be
communicated directly to bondholders.

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Governance Report

Audit and Risk Management report

to manage, rather than eliminate, the risk of failure to
achieve business objectives.

Audit and Risk Committee

The members of the Audit and Risk Management
Committee are shown on page 50.

Emma Tinker and Nemone Wynn-Evans are
considered to have recent and relevant financial
experience. The Chief Executive Officer, Chief
Financial Officer, Chief Operating Officer and
colleagues from the Company’s Information
Governance, Risk and Compliance team attend
meetings of the Committee by invitation. Matters
discussed at the Audit and Risk Committee are
routinely reported to the Board.

The primary duty of the Audit and Risk Committee
is to oversee the accounting and financial reporting
process, the internal accounting practices, external
audit arrangements and effectiveness of the Group’s
risk management and internal control system.

The Audit and Risk Committee meets at least
annually with the Group’s external auditors to review
and agree the audit services being provided to the
Group, including any non-audit services. It also meets
with external auditors, without management being
present, to discuss the audit process.

During the period, the Committee:

•

oversaw the extension of its risk control
framework following the acquisition of Wessex
ECOEnergy Limited;

oversaw ongoing improvement of financial and
operational reporting and controls;

oversaw the design and implementation of
Good Energy Limited’s approach to the fitting of
prepayment meters;

reviewed and approved updates to the Group’s
delegation of authorities;

oversaw health and safety reporting across the
Group;

reviewed the performance of the Group’s
auditors; and

ensured the principal risks remained monitored
and mitigated where possible.

Risk control environment and internal audit

The Company has an established risk and internal
audit function which sits with the Chief Financial
Officer. The function is led by the Head of
Information Governance, Risk and Compliance who
routinely meets with the Chair of the Audit and Risk
Committee to discuss new and emerging risks.

The function is responsible for Good Energy’s risk
management activities, and internal audits. As such,

Nemone Wynn-Evans

Chair of Audit and Risk Committee

Good Energy has a clear

framework for identifying
and managing risk, both at an
operational and strategic level.

Overview

Good Energy recognises that effective risk
management is critical to enable it to meet its
strategic objective.

The Group has a clear framework for identifying and
managing risk, both at an operational and strategic
level. Its risk identification and mitigation processes
have been designed to be responsive to the changing
environment in which it operates. The impact of
emerging risks on the Good Energy’s business model
are also considered and used to make informed
decisions, including as to the delivery and evolution of
the Group’s strategy.

A summary of the principal risks facing the Group is
set out in the strategic report on pages 30-31.

The Board retains overall responsibility for the
Company’s risk management and internal controls
framework. While the Board retains oversight of
the Group’s principal risks and the suitability of the
internal controls, responsibility for reviewing the
effectiveness of risk management and internal
controls is delegated to the Audit and Risk Committee
which reviews this annually.

The system of internal controls is designed effectively

Good Energy Annual Report 2023its activities include ensuring the regular review of
internal controls relating to principal risks, reporting
on risk events to the Audit and Risk Committee and
reviewing and testing the effectiveness of internal
controls through audit reviews. Good Energy
has a dedicated Compliance Team in place to
provide context to company risk and assurance at
an operational level to support the internal audit
function. Further information regarding principal risks
is available on pages 30-31 in the strategic report.

The Board has assumed responsibility for the health
and safety reporting in respect of the companies
recently acquired by the Group and receives a
report on health and safety activity at each
quarterly meeting.

An assessment of risks posed to the Group in respect
of the acquisition of Wessex ECOEnergy Limited
has been undertaken and the principal risks and
mitigations are recorded on the Good Energy Group
plc corporate risk register, maintained by the Head of
Information Governance, Risk and Compliance.

Climate-related risks

The Executive team, along with the Audit and Risk
Committee have formal oversight of the process,
decision making and responsibility of all climate-
related risks and opportunities. The Audit and Risk
Committee is informed of material changes to any
climate-related risks identified and updates on
carbon reduction at each meeting. No material risks
were reported in the year. For more information on
climate-related risks and opportunities see:

Principal risks – regulatory environment page 31.

Documentation regularly presented to the
Committee is described on pages 68-73 of the
2021 Annual Report.

External audit

Following a competitive tender process for its audit
work, overseen by the Audit and Risk Committee, the
Group appointed Mazars as auditors during 2021.
Mazars appointment was confirmed by members at
the 2021 AGM. The Committee are satisfied with the
performance of Mazars and recommend their re-
appointment to shareholders at the forthcoming AGM
and will consider whether to re-tender the audit after
a five year period, or earlier if appropriate.

The Audit and Risk Committee monitors the Group’s
safeguards against compromising the objectivity and
independence of the external auditors. It annually
reviews any non-audit services provided to the Group
and their cost, and whether the auditors believe
there are any relationships that may affect their
independence and obtaining written confirmation
from the auditors that they are independent.

The Audit and Risk Committee has also reviewed its
policy for awarding non-audit work.

For the financial year ended 31 December 2023, the
Committee has conducted its review of the auditors’

independence and concluded that no conflict of
interest exists between Mazars audit and non-audit
work. The Audit and Risk Committee is using Mazars
for audit only services.

Whistleblowing policy

The Group’s whistleblowing policy is supported
by a clear process where concerns can be raised
internally at all levels as well as to the Non-Executive
Directors. An independent person may be engaged
in some cases. The policy also includes reference
to the list of prescribed persons or bodies that may
be contacted outside of Good Energy, with contact
details. The policy applies to any person, from
employees to casual contract workers, who may
raise concerns about wrong doing, poor practices,
risks or dangers in relation to the Company’s business
dealings or activities.

The whistleblowing policy is reviewed annually by
the Audit and Risk Committee. Any whistleblowing
incidents and their outcomes are reported to the
Committee and by exception, to the Board by the
Chair of Audit and Risk Committee. No reports were
made during 2023.

Going concern

The financial statements have been prepared on the
going concern basis as the Directors have assessed
that there is a reasonable expectation that the
Group will be able to continue in operation and meet
its commitments as they fall due over the going
concern period. The going concern assessment
covers a period of at least 12 months from the date
of approval of the financial statements.

The Group has had a strong financial performance
in 2023 despite significant pressure from commodity
markets and has continued its strategic growth into
Energy services.

The unrestricted cash balance at the end of 2023
stood at £41.3m, giving the business a strong and
stable base to deliver on businesses commitments
and to deliver its strategic objectives.

Looking to the future, the Group has performed a
going concern review, going out until the end of
2025, considering both a base case, and various
externally provided scenarios. The scenarios were
provided by Ofgem in late 2023 as part of their
review into the financial stability of UK Energy
suppliers. Having reviewed this forecast, the business
can demonstrate that it can meet all tested
scenarios with sufficient cash reserves in place to
support further unexpected challenges.

The scenarios are price-based impacts reflecting the
volatility in the wholesale and supply market seen
over the past couple of years. All scenarios include
existing hedge positions for Good Energy (Dec23).
All scenarios assume domestic customer churn
continues at minimal levels as seen in the supply
industry over the past 2 years. This low level of churn
is expected to remain until wholesale prices stabilise

TCFD key:

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Governance Report

However, the business has not modelled this as a
going concern scenario for two reasons. The first is
modelling to seasonal norms will work over a
longer-term basis, and secondly, we have taken
significant steps to mitigate the impacts of low wind
within our portfolio and thus feel the scenario is
already addressed.

All scenarios prudently reflect the repayment of
£5m of bond debt in 2024/2025, however, formal
redemptions mean only £0.2m is officially due for
repayment in 2024. Excluding bond debt, the business
has no other material (£1m+) debt repayments due
in the next 18 months. The business has also taken a
prudent approach to customer credit balances with
significant reductions forecast over 2024/25 before
holding the remaining balance stable. Therefore,
Directors are confident in the ongoing stability of the
Group, and its ability to continue operation and
meet its commitments as they fall due over the
going concern period. Accordingly, the Directors
adopt the going concern basis in preparing the
financial statements.

and suppliers feel confident in pricing below the
current prices set by Ofgem. The scenarios assume
Government support schemes are in place. The
scenarios are:

Scenario 1 – Central Price

Scenario 2 – Low Price

Scenario 3 - High Price

Scenario 4 – Supplier Base Case

From a tariff perspective all scenarios reflect the
movement in default/deemed price capped tariffs
directly linked to wholesale costs developments.
These deemed and default price movements were
provided by Ofgem to ensure these key assumptions
mirrored the wholesale costs scenarios. As Good
Energy has a derogation from the price cap, it is
allowed to change the level of its SVT tariff to reflect
the true cost of supplying renewable energy. This
derogation allows Good Energy to change price
sooner than changes to default/deemed tariff
changes, allowing us to match more effectively
between cash in and cash out of the business.

In all scenarios cashflow remains sufficient to
meet all commitment as they fall due without
additional mitigations being implemented or a
need for additional funding sources to be found.
Further to this, in all scenarios the business could
deliver additional mitigations which could include
discretionary costs reductions, additional prices
increase as well as working capital optimisation
to further strengthen the cash position to cover
unexpected shocks.

TCFD key:

Good Energy Annual Report 2023Nomination and Remuneration report

The Company considers inclusion and diversity
through its recruitment selection processes,
opportunities for development and promotion and
reviews of pay and benefits. Diversity, equality and
inclusion guidance and online training is provided to
all employees during induction.

While the Board reviews the suitability of
these strategies annually, responsibility for
reviewing the effectiveness of these strategies
and underlying plans is delegated to the
Nomination and Remuneration Committee.

The Nomination and Remuneration
Committee

The members of the Nomination and Remuneration
Committee are shown on page 50.

The primary duties of the Nomination and
Remuneration Committee are to:

•

review the structure, size and composition of
the Board and its Committees to ensure that they
remain appropriate to support the Company’s
growth and development, and making
recommendations to the Board;

ensure that there is a formal, rigorous and
transparent process for the appointment of
new Directors to the Board;

to consider and develop succession plans
appropriate for the Group;

determine the Group’s approach to the
remuneration of the Executive Directors and
senior managers of the Group, on behalf of
the Board;

conduct an annual appraisal of the performance
of the Executive Directors;

assess Group performance against performance
targets within reward schemes; and

oversee the group-wide remuneration strategy
and application of the remuneration policy,
particularly with respect to diversity, inclusion and
gender pay.

The Nomination and Remuneration Committee
applies a remuneration policy relating to Director’s
remuneration which considers salaries, pensions,
benefits, bonuses and LTIP awards.

No Executive Director may be involved in any
decisions as to their own remuneration.

The functions of a Nomination Committee were
introduced to the pre-existing Remuneration
Committee during 2016. In 2019 and 2023, the
Board considered whether these functions would
be better separated into two separate committees
and concluded that it remained appropriate for the
functions to be combined within a single committee.
The Board will review this periodically.

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Emma Tinker

Chair of Nomination and
Remuneration Committee

Hiring and retaining

talented employees is integral
to meeting its objectives by
maintaining an experienced,
productive workforce.

Overview

Good Energy recognises that valuing the different
skills and perspectives brought to the company
through hiring people from a diversity of backgrounds
creates a more innovative and effective organisation.
Good Energy also recognises that hiring and retaining
talented employees is integral to meeting
its objectives by maintaining an experienced,
productive workforce.

The Board retains overall responsibility for the Group’s
people and reward strategies.

In 2020 a Diversity and Inclusion working group of
‘Inclusion Champions was established, involving
employees from across the business. The Inclusion
champions continue to work on employee
engagement, analysing data and implementing
initiatives to enhance the Group’s commitment to
a diverse workplace. Good Energy is an Inclusive
Employers member, giving all employees access
to expert inclusion and diversity support from
established leaders in the field, via webinars and
other resources. More details are available on page
47 and in the strategic report on pages 26 and 29.

Governance Report

During the period, the Committee:

•

reviewed overall appropriateness of the Executive management structure in order to implement and
deliver company strategy;

conducted a benchmarking review of executive and non-executive remuneration, assisted by KPMG;

oversaw the appointment of Chief Operating Officer Fran Woodward to the Board; and

spent time on succession and contingency planning including being consulted on the development of
internal talent and female leadership roles.

Nominations

The Committee will keep under review the composition of the Board, the mix of skills and experience
of the Directors and the needs of the business, having due consideration for the benefits of diversity, and
support the Group in developing appropriate succession and contingency plans of key staff to meet its
long-term objectives.

The Board remains focused on promoting diversity across the organisation. As at 31 December 2023, at Board
level we have 43% (3 of 7) women.

The Company gender pay gap report is available on our website goodenergy.co.uk/reports-and-policies which
includes the steps described to close the gap across the organisation as a whole, however the Committee
considers that disparity was largely due to the recruitment of Nigel Pocklington as Chief Executive Officer in
May 2021.

The Committee is responsible for reviewing the time commitments of each Director both prior to all
appointments and annually, as part of the Board review process, to ensure that all Directors devote sufficient
time to the Company to discharge their duties effectively.

Read more about succession planning on page 52.

Read more about the skills and experience of the Directors on pages 38-41.

Remuneration

Information about the remuneration of the Directors of the Company for the year ended 31 December 2023
is set out in the following section. This report is unaudited and has been prepared in accordance with the
requirements for AIM listed companies set out in the Companies Act 2006 and the AIM rules.

The Group’s bonus and share-based incentive schemes have been in place since 2016 and remain aligned
with current best practice. They are designed to motivate and incentivise key talent to assist the Group in
achieving its strategic aims whilst remaining consistent with its tolerance for risk and comprise:

•

an Annual Bonus Plan that encompasses both financial and non-financial annual performance targets,
details of which are set out on page 62; and

a Performance Share Plan for Executive Directors and members of the senior management team, details
of which are set out on page 63.

There have been no changes in Non-Executive Director fees since 2016. To address this, and to ensure
appropriate remuneration for the Executive Directors, the Company engaged KPMG to conduct a review of
Non-Executive Director fees and Executive Director remuneration. The review concluded that an increase in
Non-Executive Director fees and overall Executive Director remuneration was appropriate against relevant
benchmarking. In light of this review, the Committee has approved an increase to Non-Executive Director
fees, together with changes to the bonus for future reporting periods and overall remuneration of Executive
Directors. See pages 62 and 63 for more details.

The Company has been transparent in reporting its fourth CEO pay ratio relative to its employees.
See page 67 for details.

The Group operates in a competitive environment and sets out to provide competitive remuneration
to all of its employees, appropriate to the business environment, geographical location and strategic
aims of the Company.

The Group aims to align the interests of shareholders with those of Executive Directors and senior
management by giving the latter the opportunity to build up a shareholding interest in the Company.

Good Energy Annual Report 2023

Remuneration policy

Following changes to the Code, which take effect for financial periods commencing on or after 1 April 2024,
the Committee has considered the introduction of a Remuneration Policy details of which are set out below. It
is the Board’s intention to present this policy, together with the associated remuneration report, for an advisory
shareholder vote when the revised Code guidance becomes applicable to the Company.

Element

Link to strategy

Operation / how
it’s determined

Maximum
opportunity /
limitation

How it’s linked
to performance
(business model)

Directors’
salaries

Executive salaries
take into account the
responsibilities of the role
and the necessary skills
and experience required
to fulfil the role as well
as to retain and motivate
key members of staff.

Basic salary is
reviewed twice a year
and benchmarked
appropriately, taking into
consideration individual
scope and performance.

No greater than
workforce average
except in cases of:

• material increase in
market rates;

• changes in role/
increased
responsibility; or

• a reward for individual
development.

Expected performance
is in line with
salary reviews

Pension

To help recruit and retain
high performing and
experienced Executive
Directors and provide
competitive pensions.

Executive directors
and senior leaders
are entitled to make
contributions in relation
to the Group’s
pension scheme.

No maximum
opportunity however
statutory minimum
pensions contributions
are made in line with
legislation and
wider staff.

None

Benefits

To help recruit and retain
high performing and
experienced Executive
Directors and provide
competitive benefits.

Bonus

To motivate
performance and
achieve the long-term
goals of the Company

Benefits aligned with
those offered to all
members of staff,
with the exception
of additional benefits
towards specific
products and services
to encourage internal
uptake and subsequent
expertise.

Executive directors
and senior leaders
are entitled to
private health care.

Performance based,
weightings and targets
set annually. Payments
are made in April
following the Remco’s
assessment against
performance criteria.

No maximum
opportunity

None

See page 62
for details.

Performance targets
include financial, non-
financial and strategic
objectives.

Long term
incentive
plan / share
options

To incentivise and
reward long-term
performance and value
creation. To algin the
interests of executive
directors and senior
leaders and shareholders
in the long-term.

Executive directors
and senior leaders
may receive awards
under the 2016 LTIP at
the discretion of the
Committee.

As set out in the
Scheme Rules. See
page 63 for details.

Awards are subject to
performance conditions.
Performance criteria
may change from year
to year.

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Service agreements, notice periods and termination payments

The service agreements for the Executive Directors are not for a fixed term and may in normal circumstances
be terminated on the notice periods listed below.

The remuneration of the Chair of and the Non-Executive Directors consists of fees that are paid monthly
in arrears.

The Chair and the Non-Executive Directors did not participate in any bonus scheme or long-term incentive
reward schemes, nor did they accrue any pension entitlement during the period. Following the publication
in August 2015 of HMRC’s express confirmation of the travel rules that apply to Non- Executive Directors, the
Company reimburses Non- Executive Directors’ travel expenses between home and the Company’s Head
Office. The key terms of the Non-Executives Directors’ appointments are set out below.

The fees paid to the Non-Executive Directors are determined by the Board. They are not entitled to receive
any bonus or other benefits. Executive salaries are directly linked to achieving the Company’s purpose and
strategy and they were also benchmarked during the year against AIM company data and adjusted to reflect
the growth of the Company.

Service agreements, notice periods and termination payments

Name

Position

Date of contract Notice period Annual Salary (£)

Chief Executive
Officer

Chief Financial
Officer

Chief Operating
Officer

6 April 2021

6 months3

287,000

8 January 2020

6 months3

194,667

20 October 2023

6 months3

47,500

26 July 20184

01 December 2017

02 September 2016

50,000

31,667

33,667

Nemone Wynn-Evans

01 January 2019

Executive Directors

Nigel Pocklington

Rupert Sanderson

Fran Woodward

Non-Executive
Directors

Will Whitehorn

Tim Jones

Emma Tinker

3. The notice period of the Executive Directors is 12 months in the event of a change of control of Good Energy Limited or the Company and additional bonus

payments may be required.

4. Will Whitehorn’s formal appointment to the Board took effect on 4 July 2018.

Good Energy Annual Report 2023Salaries/Fees, annual bonus and benefits

Name

Salary/fee

Pension

Benefits in Kind

Annual Bonus

Total

2023 (£)

2022 (£)

Executive Directors

Nigel Pocklington

287,000

28,158

1,983

146,250

463,391

320,387

Rupert Sanderson

194,667

19,647

3,356

69,375

286,865

217,550

Fran Woodward5

47,500

7,125

-2,1165

n/a

52,509

n/a

Sub-total

529,167

54,930

3,223

215,625

802,765

537,937

Non-Executive Directors

Will Whitehorn

Tim Jones

Emma Tinker

50,661

31,667

34,050

Nemone Wynn-Evans

34,186

Sub-total

150,564

50,661

46,418

31,667

30,000

34,050

31,011

34,186

32,813

150,564

185,588

Overall total

679,731

54,930

3,223

215,625

953,329

723,525

5. Pro-rata for the period of directorship. Fran Woodward joined the Board effective 20 October 2023. Fran Woodward contributes to salary sacrifice schemes. The

total salary sacrifice is -£3,168, the total allowances are £1,052.

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Annual bonus scheme

Operation of the scheme

No changes were made to the operation of the bonus scheme during this reporting period.

All bonuses under the bonus scheme are individually capped. In the reporting period, a maximum potential
bonus of 75% for the CEO and 50% for the CFO and COOs’ salary is payable in relation to the Company’s
performance against three key performance metrics. Following the KPMG review described on page 58, the
Nomination and Remuneration Committee has agreed to increase the maximum potential bonus for the next
reporting period to 100% for the CEO and 75% for the CFO and COO. The performance metrics and their
relative weightings are shown in the table below.

Maximum bonus will only be payable in the event that all three of these performance metrics are met.
Performance against the targets is measured against threshold and on-target targets. No bonus will be
payable unless the Group’s profit before tax meets the threshold targets unless the Nomination
and Remuneration Committee, in its discretion, determines otherwise.

The Nomination and Remuneration Committee also retains discretion, under the bonus scheme rules, to adjust
any payments in line with individual performance.

Individual performance targets are set annually and reviewed mid-year and at the end of the relevant
financial year. Annual targets for each of the three Company performance metrics will be set by the
Nomination and Remuneration Committee.

The Group considers that the targets for 2024 are commercially sensitive and are not therefore disclosed.
However, retrospective disclosure of targets for the year ending 31 December 2023 is provided in the
table below.

Measure

Strategic objective

Weighting

Group profit before tax

Deliver profit growth

Propositions

Focus on new tariffs and products

TrustPilot rating

Maintain customer satisfaction ratings

60%

20%

2023 targets and performance

The Group’s performance against targets and actual outturn for the financial year ended 31 December 2023
are set out in the table below.

Measure

2023 outturn

2023 performance
against target

Group profit before tax

£5.7m

Propositions

60,000 FIT customers transitioned
to smart export

Trustpilot rating

4.7 rating (5 stars)

On target

Threshold

On target

Good Energy Annual Report 2023Performance share plan (“PSP”)

Operation of the scheme

The PSP was introduced to provide a long-term incentive to Executive Directors and any eligible employee,
and has been designed to align participants and directors during the three year period of each award to
encourage long-term, sustainable profit growth for the benefit of all stakeholders. The PSP was implemented
during 2016 following advice from external remuneration consultants and in consultation with the Company’s
ten largest shareholders. In 2021, the plan was reviewed, updated and approved for options granted under the
scheme going forwards.

The PSP is a deferred share award, which normally vests three years from the date of grant, subject to eligible
employees remaining employed by the Company at this date. It is issued at a maximum 15% discount to the
share price on the date of grant.

The maximum limit of an award to any individual under the PSP in any financial year would be 100% of
annual salary, subject to the Nomination and Remuneration Committee’s discretion to increase to 150% of
annual salary in exceptional circumstances. In view of the exceptional contribution that will be required from
the executive directors in order to deliver the Company’s transformational strategy in the coming years, an
exceptional award exceptional award of 150% of annual salary was made in June 2023.

The Nomination and Remuneration Committee may, at any time up to and including vesting, reduce the
vesting level of awards where there has been, amongst other things, a material misstatement in the
accounts, an error in any information on which performance targets were based, gross misconduct
or fraud by the employee.

The Nomination and Remuneration Committee authorised an extension to share options that were due to
lapse in the year in line with the Scheme Rules. Futher details of this extension are set out on the next page.

No options vested or were exercised by Executive Directors in 2023.

Performance targets

The performance metrics and their relative weightings for the 2023 grant of awards are shown in the table
on the previous page, reflecting the company-wide annal bonus targets. The Group considers the targets
themselves to be commercially sensitive and these are not therefore disclosed. However, retrospective
disclosure of performance against targets will be provided at the end of the relevant measurement period.

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Directors’ share options

Details of the Directors’ share options outstanding at 31 December 2023 are shown below.

Date
option
granted

Number of options
outstanding as at
31 December 2023

Option
price

Exercised
during
period

Gain on
options
exercised

Cancelled/
surrendered
during period

Name

Nigel
Pocklington

Sub-total

Rupert
Sanderson

Sub-total

Fran
Woodward

22/10/2021

88,136

£2.51

11/04/2022

97,159

23/06/2023

274,832

£2.27

£1.49

460,164

19/04/2021

39,3066

£1.78

22/10/2021

55,763

11/04/2022

69,159

23/06/2023

186,241

£2.51

£2.27

£1.49

350,469

07/07/2015

50,000

£2.25

19/04/2021

35,5036

22/10/2021

50,932

11/04/2022

56,168

23/06/2023

166,107

Sub-total

Total

358,710

1,169,343

£1.78

£2.51

£2.27

£1.49

6. The Committee has twice agreed to extend the exercise period in respect of the options awarded on 19 April 2021, which vested on 30 June 2022. The exercise
period would otherwise have expired on 30 Jue 2023 and 31 December 2023. This extension was agreed upon because the option holders were in possession of
market sensitive information (due to the acquisition of solar installation companies in furtherance of Good Energy’s strategy) and were therefore unable to exercise
the option prior to the lapse date.

Good Energy Annual Report 2023Statutory and other information

General company information

Good Energy Group PLC is a public limited
company incorporated in England and Wales.The
Company’s registered office and principal place
of business is: Monkton Park Offices, Monkton Park,
Chippenham, Wiltshire, SN15 1GH and the registered
number is 04000623.

Shareholder agreements and consent requirements
There are no known arrangements under which
financial rights carried by any of the shares in the
Company are held by a person other than the
holder of the shares and no known agreements
between the holders of shares with restrictions on
the transfer of shares or exercise of voting rights.

Share capital

On 31 December 2023, 16,882,002 ordinary shares
of 5p each were in issue. On 12 February 2024 the
Company announced the allotment of 1,322,000 new
ordinary shares, meaning that as at the date of this
report 18,216,130 ordinary shares of 5p each were in
issue.

The Company is listed on the AIM of the London
Stock Exchange. Its shares were quoted on the Aquis
Exchange (formally NEX Growth Market) until 31
March 2023.

Significant shareholders

At 31 December 2023, the following shareholders
had notified an interest exceeding 3% of the issued
ordinary share capital of the Company (excluding
Directors and their respective families as defined
in the AIM rules, details of which are set out on
the next page):

Shareholder

Number
of shares

Ecotricity Group Limited

4,740,091

28.1%

Martin Edwards & family

1,423,315

8.5%

Hargreaves Lansdown plc

1,139,194

6.8%

Share class rights

Ordinary shares
The full share class rights are set out in the Company’s
Articles of Association which are available to view at
goodenergy.co.uk/investors and at Companies House
and summarised below:

In summary, each member has one vote for each
ordinary share held. Holders of ordinary shares are
entitled to: receive the Company’s Annual Report
and Accounts; attend and speak at general meetings
of the Company; appoint one or more proxies or, if
they are corporations, corporate representatives;
and exercise voting rights. Holders of ordinary shares
may receive a dividend in cash or ordinary shares
under the Company’s scrip dividend scheme and on
liquidation may share in the assets of the Company.

Authority to issue shares
At the AGM in 2023, authority was proposed to
allot new ordinary shares up to a nominal value of
£280,720, equivalent to one-third of the issued share
capital of the Company at that time. The Directors
also proposed to allot up to two thirds of the total
issued share capital of the Company, but only in the
case of a rights issue.

These authorities are valid until the AGM in 2024,
and the Directors propose to renew this authority
at the AGM. The Board believes this authority will
allow the Company to retain flexibility to respond to
circumstances and opportunities as they arise.

Please see events after the balance sheet on page 68
with regards to new shares issued.

Deadlines for exercising voting rights
Electronic and paper proxy appointments,
and voting instructions, must be received by
the company’s Registrar not less than 48 hours
before a general meeting.

Dividends
Alongside our ongoing investments, we aim to
deliver a dividend where appropriate, as part of
our growth strategy and revised capital allocation
policy. The policy has the objective of investing both
organically and inorganically across the business and
paying a dividend when appropriate to provide an
overall return to shareholders. We remain mindful of
maintaining and balancing the ability to invest in long
term growth opportunities.

Following a good operational performance in 2023
and reflecting our confidence in the ongoing business,
the Board recommend a final dividend for 2023 of
2.25p per ordinary share, taking our full year dividend
to 3.25p.

Good Energy continue to operate a scrip dividend
scheme and the payment timetable of the final
dividend will be announced alongside the notice
of Annual General Meeting in Q2 2024.

Directors
The names of the Directors that held office during
the financial year are Nigel Pocklington, Rupert
Sanderson, Fran Woodward, Will Whitehorn, Emma
Tinker, Tim Jones and Nemone Wynn Evans. Full
details and biographies are set out on pages 38-41.

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Directors’ interests and their interests in the Company’s shares7
The interests (all of which are beneficial unless otherwise stated) of the Directors and their families as defined
in the AIM Rules in the issued share capital of Good Energy Group plc are:

No. shares
as at 31
December
2023

%age of
issued share
capital

No. shares
as at 31
December
2022

%age of
issued share
capital

Current Directors

Nigel Pocklington

Rupert Sanderson

Fran Woodward

Will Whitehorn

Tim Jones

Emma Tinker

Nemone Wynn-Evans

10,500

19,004

52,000

9,489

1,605

9,500

0.06

0.11

0.31

0.06

0.01

0.06

7,500

19,004

n/a

52,000

9,489

1,579

9,500

0.04

0.11

n/a

0.31

0.06

0.01

0.06

on our current approach and our journey towards
meeting the TCFD recommendations.

More details about our environmental impact can be
found in the strategic report on pages 19-23.

More information about our approach to the TCFD
reporting framework are on pages 14-15.

Gender Pay
The Board welcomed the introduction in 2017 of
Gender Pay gap reporting. In 2023, the Group’s mean
gender pay gap is 19.8%. This gap is due to there
currently being more men than women at senior
leader level.

The Group’s full Gender Pay Report, which also details
the actions initiated by the Board to close the
Group’s gender pay gap, is published on its website
goodenergy.co.uk/reports-and-policies.

Financial instruments
The Group’s financial instruments include bank
loans and other borrowings, a corporate bond
and overdraft.

The principal objective of these instruments is to raise
funds for general corporate purposes and to manage
financial risk. Further details of these instruments are
given in note 2.11 in the Financial Statements.

Political Donations
No political donations were made in the year.

Impact on the environment
The Company is committed to reducing its
environmental impact and the carbon emissions from
its operations. ISO14001 accreditation was achieved
during 2017, providing independent confirmation
that that Good Energy Group meets international
standards for measuring and continually improving
environmental performance. ISO14001 is due to be
extended to capture the acquisitions of Igloo, Wessex
and JPS in due course. The Company regularly
measures its Scope 1 and Scope 2 emissions and as
many indirect Scope 3 emissions as possible. Where
it is not yet possible to avoid or eliminate emissions,
these are neutralised through international carbon
reduction projects. 2023 is our third year reporting

7. Certain Directors hold share options as detailed on page 64 within the Nomination and Remuneration Report.

TCFD key:

Good Energy Annual Report 2023
CEO pay ratio
Good Energy have voluntarily chosen to disclose CEO pay ratio with employee pay.

Year8

2023

2022

25th percentile pay ratio

Median pay ratio

75th percentile pay ratio

18:1

12:1

14:1

9:1

6:1

The table compares the total figure of remuneration for the Chief Executive Officer with Group employees
who are paid at the 25th percentile (lower quartile), 50th percentile (median) and 75th percentile (upper
quartile). 2023 is the fourth year we have reported CEO pay ratio, taking CEO pay as at 31 December 2023.

Although Good Energy are not required to report CEO pay ratio at present, we have voluntarily chosen
to disclose requirements under the Government’s methodology of ‘Option A’. All individuals employed at
31 December 2023 have been included in the calculation, and where applicable, remuneration has been
annualised for employees not employed on a full time basis and/or for the twelve months reported on.

The total remuneration for full-time equivalent employees includes (but is not restricted to):

•

annual salary and allowances

annual bonus

employer’s pension contributions

Average annual
salary (£)

CEO

25th percentile

Median

75th percentile

Salary

287,000

25,000

Total pay and
benefits

463,391

26,000

30,923

33,469

44,024

48,912

The table shows the salary and total pay amounts for 2023. Quartile groups of employees are displayed
using the median values at the 25th, 50th and 75th percentiles providing a fair representation rather than
basing it on individual employees, to minimise the influence of anomalies.

8. The CEO pay ratio for 2020 and 2021 is available in the 2022 Annual Report.

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Modern Slavery
Although the Group considers the inherent risk of
encountering issues of modern slavery within its
business, supply chains and strategic affiliations to
be low, it is nonetheless an issue that the Group and
the Board takes very seriously. Since the acquisition
of Igloo Works Limited in December 2022 and
Wessex ECOEnergy in June 2023, the Group has
an additional interest to maintain and manage the
subsidiary’s supply chains. Whilst the subsidiaries do
not meet Modern Slavery reporting thresholds, the
Group intends to consider any risks, including modern
slavery, that may apply in respect of the subsidiary’s
supply chain. The Group’s full statement under section
54 of the Modern Slavery Act 2015 for the period
ended 31 December 2023 is published on its website
goodenergy.co.uk/modern-slavery-act.

Related Party Transactions
Related party transactions are set out in note 31 in
the Financial statements.

Disclosure of Information to Auditors
So far as each Director is aware, there is no relevant
audit information of which the Company’s auditors
are unaware, and each Director has taken all the
steps that they ought to have taken as a Director
in order to make themselves aware of any relevant
audit information and to establish that the Company’s
auditors are aware of that information. This
confirmation is given, and should be interpreted, in
accordance with the provisions of Section 418 of the
Companies Act 2006.

Events after the balance sheet

A final dividend of 2.25p per share (2022: 2.0p) was
proposed on 19 March 2024, subject to shareholder
approval at the Group’s AGM.

On 12 February 2024, Good Energy Group PLC
acquired the entire issued share capital of JPS
Renewable Energy Ltd, a specialist solar and storage
installation and distribution business, and its wholly
owned subsidiary, Trust Solar Wholesale Ltd, a
standalone distribution and procurement business, for
an initial consideration of £7m.

The initial consideration was satisfied by a cash
payment on completion and through the allotment
of 1,322,000 new ordinary shares in Good Energy
Group PLC. A proportion of the consideration
shares have been placed on behalf of JPS Group’s
selling shareholders via a vendor placing of 842,000
consideration shares at a price of 250 pence per
placing share raising proceeds of approximately
£2.1m for the vendors.

Approved by the Board of Directors

Nigel Pocklington

Chief Executive Officer

26 April 2024

Good Energy Annual Report 2023

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69
69

Governance Report

Statement of Directors’ responsibilities
in respect of the annual report and the
financial statements

The Directors are responsible for preparing the Annual
Report and Accounts in accordance with applicable
law and regulation, including company law which
requires the Directors to prepare financial statements
for each financial year. Under company law the
Directors must not approve the financial statements
unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and parent
company and of the profit or loss of the Group and
parent company for that period.

In preparing the financial statements, the Directors
are required to:

•

select suitable accounting policies and then apply
them consistently;

state whether applicable UK adopted
International Financial Reporting Standards
(IFRSs) in conformity with the requirements of the
Companies Act 2006 have been followed for the
Group financial statements and IFRSs have been
followed for the Company financial statements,
subject to any material departures disclosed and
explained in the financial statements;

• make judgements and accounting estimates

that are reasonable and prudent; and

•

prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the Group and parent company
will continue in business.

The Directors have prepared the Group financial
statements and parent company financial statements
in accordance with UK adopted IFRSs in conformity
with the requirements of the Companies Act 2006.

The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Group and parent company’s transactions
and disclose with reasonable accuracy at any
time the financial position of the Group and parent
company. These records must also enable them to
ensure that the financial statements comply with
the Companies Act 2006 and, as regards the Group
financial statements, Article 4 of the IAS Regulation.

The Directors are also responsible for the system
of internal controls, for safeguarding the assets of
the Group and parent company and for taking
reasonable steps for the prevention and detection
of fraud and other irregularities.

Will Whitehorn

Chair

The Directors submit their

Annual Report and Accounts
for Good Energy Group
plc for the year ended 31
December 2023

The Directors submit their Annual Report and
Financial Statements (Annual Report and Accounts)
for Good Energy Group plc for the year ended
31 December 2023. The directors’ report required
under the Companies Act 2006 comprises this
Governance & Directors’ Report and the Nomination
& Remuneration Report.

The Company is required to set out a fair review
of the Group’s activities and a description of the
principal risks and uncertainties facing the business
as detailed in the Strategic Report. This requirement
includes an analysis of the development and
performance of the Group’s business during the
financial year, and the position of the Group at the
end of the reporting period consistent with its size
and complexity.

Good Energy Annual Report 2023liabilities of Directors in relation to the Annual Report
and Accounts are subject to the limitations and
restrictions provided by such law.

Will Whitehorn

Chair

On behalf of the Board

26 April 2024

The Directors of the ultimate parent company are
responsible for the maintenance and integrity of the
ultimate parent company’s website. Legislation in
the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.

The Directors consider that the Annual Report
and Accounts, taken as a whole, is fair, balanced
and understandable and provides the information
necessary for shareholders to assess the Group
and parent company’s position and performance,
business model and strategy.

Each of the Directors, whose names and functions
are listed in the Governance & Directors report
confirm that, to the best of their knowledge:

•

the parent company financial statements, which
have been prepared in accordance with IFRSs,
give a true and fair view of the assets, liabilities,
financial position and profit of the Company;

the Group’s consolidated financial statements,
which have been prepared in accordance with
IFRSs give a true and fair view of the assets,
liabilities, financial position and profit of the
Group; and

the Annual Report and Accounts includes a fair
review of the development and performance of
the business and the position of the Group and
parent company, together with a description of
the principal risks and uncertainties that it faces.

In the case of each Director in office at the date the
Governance Report is approved:

•

so far as the Director is aware, there is no relevant
audit information of which the Group and parent
company’s auditors are unaware; and

they have taken all the steps that they ought
to have taken as a Director in order to make
themselves aware of any relevant audit
information and to establish that the Group
and parent company’s auditors are aware of
that information.

The Annual Report and Accounts, including the
Strategic Report, Governance & Directors’ Report,
Remuneration Report and Financial Statements,
have been prepared and approved by the Board
and are published in accordance with, and with
reliance on, applicable English company law. The

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Independent auditor’s report to the
members of Good Energy Group Plc

Opinion

We have audited the financial statements of Good Energy Group Plc (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 31 December 2023 which comprise the Consolidated Statement
of Comprehensive Income, Consolidated Statement of Financial Position, Parent Company Statement of
Financial Position, Consolidated Statement of Changes in Equity, Parent Company Statement of Changes in
Equity, Consolidated Statement of Cash Flows, Parent Company Statement of Cash Flows and notes to the
financial statements, including material accounting policy information.

The financial reporting framework that has been applied in their preparation is applicable law and UK-
adopted international accounting standards and, as regards the parent company financial statements, as
applied in accordance with the provisions of the Companies Act 2006.

In our opinion, the financial statements:

•

give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31December
2023 and of the group’s profit for the year then ended;

have been properly prepared in accordance with UK-adopted international accounting standardsand,
as regards the parent company financial statements, as applied in accordance with theprovisions of the
Companies Act 2006; and

•

have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the “Auditor’s responsibilities
for the audit of the financial statements” section of our report. We are independent of the group and the
parent company in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard, as applied to SME listed entities and we have
fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.

Our audit procedures to evaluate the directors’ assessment of the group’s and the parent company’s ability to
continue to adopt the going concern basis of accounting included but were not limited to:

•

Undertaking an initial assessment at the planning stage of the audit to identify events orconditions that
may cast significant doubt on the group’s and the parent company’s ability tocontinue
as a going concern;

• Obtaining an understanding of the relevant controls relating to the directors’ going concernassessment;

•

Evaluating the directors’ method to assess the group’s and the parent company’s ability to continue
as a going concern;

• Obtaining and reviewing the directors’ going concern assessment, which incorporated severe but plausible

scenarios, based on OFGEM stress testing and as submitted to and reviewed by OFGEM;

Evaluating the key assumptions used and judgements applied by the directors in forming their conclusions
on going concern, including hedging position, derogation from the OFGEM price cap; forecasted gas and
electricity prices; level of bank support available and likely future repayment rates of the bond in the going
concern assessment period; and

Reviewing the appropriateness of the directors’ disclosures in the financial statements which details the
results of the OFGEM stress testing.

•

Good Energy Annual Report 2023

Based on the work we have performed, we have not identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast significant doubt on the group’s and the parent
company’s ability to continue as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.

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Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on:
the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement
team. These matters were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.

The matters set out below are in addition to going concern which, as set out in the “Conclusions relating to
going concern” section above, was also identified as a key audit matter.

Key Audit Matter

How our scope addressed this matter

Revenue recognition, specifically the estimated
unbilled income

The group’s accounting policy in respect of
revenue recognition is set out in the note 2.4, with
the related critical accounting judgements and
estimates detailed in notes 4.1.1 and
4.2.1 respectively.

The group’s primary revenue streams relate to the
provision of gas and electricity supply, of which
a significant proportion is unbilled income at the
year-end based upon an estimation of the amount
of unbilled charges at the year end, being £22.6m
in 2023 compared to £42.9m in 2022.

The unbilled income is calculated using system-
generated information based on industry
expected usage per property, customer tariffs
and seasonality variations. The approach and
methodology remains largely consistent with the
prior year.

For commercial customers the amounts are
calculated using industry accepted norms from the
software provider with no management over-ride
or assumptions included.

For domestic customers there is an internally
developed IT report which calculates the unbilled
income based on management assumptions
around seasonality and, where information is
not available for a small number of customers,
estimates of the tariff and usages.

Due to the valuation of the unbilled income being
an estimation there is a high risk of management
bias.

Our response

Our procedures over revenue recognition, in
particular around the valuation of unbilled income,
included, but were not limited to:

• Obtaining an understanding of the processes
and controls over the recognition of revenue,
performing walkthrough procedures and
considering the design and implementation of
the controls;

•

Performing IT general and application controls
work around the commercial billing system;

• Confirming that revenue is being recognised

in the correct period by recalculating for a
sample of customers, across both domestic
and commercial, the unbilled income based
on the last billed date and expected
usage up until the year-end;

•

Verifying that the tariff inputs used in the
unbilled income and revenue calculations
are correct and agree back to approved Good
Energy tariffs;

• Comparing a sample of unbilled income

balances to bills raised post year-end where
there were actual meter readings to check the
accuracy of the estimated usage and revenue
recorded in relation to this;

• Where meter readings are not available

post year-end, we agreed to the latest
estimated annual consumption (EAC) as
provided by the industry and challenged
any unusual differences after having taken
into consideration the weather co-efficient
assumptions applied by management.

Our observations

Our work performed in relation to the unbilled
income reports confirmed that the calculation
of the year end unbilled income is appropriately
performed. Based on substantive testing of post
year end invoices no material issues were noted in
respect of the valuation of the unbilled income at
the year end.

Good Energy Annual Report 2023

Key Audit Matter

How our scope addressed this matter

Expected Credit Losses (ECL)

Our response

Expected credit losses are disclosed in Financial
and Capital Risk Management note 3.1.3, Critical
Accounting Judgements and Estimates note 4.2.2
and Trade and Other Receivables note 19 of the
Financial Statements.

There is an ECL provision of £18.9m (2022: £15.4m)
at the year-end against gross trade and
unbilled receivables from customers of £49.2m
(2022: £69m).

The simplified approach to ECL under IFRS 9 was
calculated using a provision matrix to compute the
ECL for trade receivables and unbilled revenue.
Management’s judgement is used to determine the
future likely recovery rates based on days past due
for groupings of various customer segments that
have similar loss patterns and the Group’s historic
observed default rates, calibrated to adjust
the historic credit loss experience with
forward-looking information.

The ECL provision is sensitive to changes in
circumstances and of forecasted economic
conditions. Therefore, there is high estimation
uncertainty and the actual credit losses
may vary greatly from expected due to
unforeseen circumstances.

There is a risk that the assumptions used by
management in calculating the ECL provision
may be susceptible to management bias and
the valuation of ECL amounts against trade
receivables and unbilled income may be misstated.

Our response over ECL included, but was not
limited to:

• Obtaining an understanding of the processes

and controls over the ECL calculation;

• Obtaining management’s calculation of the
ECL provision and testing the mathematical
accuracy of the provisioning method as well
as testing the accuracy of the analysis of debt
collection rates being used to verify they were
appropriate.

•

Testing the ageing of trade debtors by
recalculating a sample of individual balances.

Reviewing and challenging the key
assumptions used by management around
collection rates, segmentation and the
appropriateness of overlays within the ECL
model to take into account the economic
outlook for 2024 and other factors;

Performing sensitivity analysis on the impact
of changes to the assumptions made on the
ECL provision.

Performing analysis of the year-end debt
balance collection rates to determine if there
have been any unexpected movements post
year-end that are not in line with the provision
rates used.

Our observations

Having assessed management’s judgements,
the integrity of data driving the calculations and
performing sensitivity analysis we conclude that
the ECL provision is appropriate.

We are satisfied that the disclosure in the financial
statements fairly reflects the approach and
assumptions used.

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Governance Report

Key Audit Matter

How our scope addressed this matter

Impairment consideration around the Zapmap
associate investment valuation

Our response over impairment risk included, but
was not limited to:

The accounting treatment and fair value
considerations of the Zapmap associate are
disclosed in note 3.3 and in accounting policy 2.9.

The value of Zapmap associate included within
the consolidated accounts is £10.5m being the
opening balance of £12.5m less Good Energy’s
£2m share of losses for the year. The equity
investment in associate is disclosed in Note 17 of
the Financial Statements.

Given the nature of the investment, there is risk
that the investment is impaired due to changes in
Zapmap’s strategy, performance and economic/
political environment.

•

Performing specific procedures over the share
of loss recognised by the group by reviewing
the budgets of Zampap and completing
substantive analytical review over costs
recognised in the year by the associate;

• Obtaining a valuation report from

management’s expert and engaging
Mazars internal valuations team to perform
procedures over the report including the
underlying methodology;

• Consideration of whether Zapmap Limited

have met their key commercial objectives for
their year via meetings with key contacts;

•

Reviewed the disclosure in the financial
statements with respect to the investment
in associate.

Our observations

Having challenged management’s judgement over
the Zapmap valuation, we are satisfied that there is
no indication of impairment at the year end date.

Our application of materiality and an overview of the scope of our audit

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds
for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit
and the nature, timing and extent of our audit procedures on the individual financial statement line items and
disclosures and in evaluating the effect of misstatements, both individually and on the financial statements as
a whole. Based on our professional judgement, we determined materiality for the financial statements as a
whole as follows:

Group materiality

Overall materiality

£2.5m

How we determined it

1% of revenue

Rationale for
benchmark applied

In our view, the above measure is the most relevant measure of the underlying
performance of the company as earnings have remained volatile and margin
low and therefore, revenue has been selected as the materiality benchmark in
line with the prior year.

Performance materiality

Performance materiality is set to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements in
the financial statements exceeds materiality for the financial statements
as a whole.

We set performance materiality at £1.5m which represents 60% of
overall materiality. This was set at the bottom of the range and increased to
60% to represent this is not a first year audit.

Good Energy Annual Report 2023
Overall materiality

£2.5m

Reporting threshold

We agreed with the directors that we would report to them misstatements
identified during our audit above £0.07m as well as misstatements below that
amount that, in our view, warranted reporting for qualitative reasons.

Parent company materiality

Overall materiality

£0.3m

How we determined it

2% of net assets

Rationale for
benchmark applied

Net assets is deemed the most appropriate measure given the parent company
is an investment holding company with no revenue.

Performance materiality

Performance materiality is set to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements
in the financial statements exceeds materiality for the financial statements
as a whole.

We set performance materiality at £0.2m which represents 60% of
overall materiality. This was set at the bottom of the range and increased to
60% to represent this is not a first year audit.

Reporting threshold

We agreed with the directors that we would report to them misstatements
identified during our audit above £0.01m as well as misstatements below that
amount that, in our view, warranted reporting for qualitative reasons.

As part of designing our audit, we assessed the risk of material misstatement in the financial statements,
whether due to fraud or error, and then designed and performed audit procedures responsive to those risks. In
particular, we looked at where the directors made subjective judgements, such as assumptions on significant
accounting estimates.

We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion
on the financial statements as a whole. We used the outputs of our risk assessment, our understanding of
the group and the parent company, their environment, controls, and critical business processes, to consider
qualitative factors to ensure that we obtained sufficient coverage across all financial statement line items.

Our group audit scope included an audit of the group and the parent company financial statements. Based on
our risk assessment, Good Energy Limited and Good Energy Gas Limited, including the parent company, were
subject to full scope audit by the group audit team. The above accounted for 99% of the group’s total revenue.
The remaining entities, with the exception of Zapmap Limited which was subject to specified audit procedures,
were subject to review procedures carried out by the group audit team.

At the parent company level, the group audit team also tested the consolidation process and carried out
analytical procedures to confirm our conclusion that there were no significant risks of material misstatement
of the aggregated financial information.

Other information

The other information comprises the information included in the annual report and accounts other than the
financial statements and our auditor’s report thereon. The directors are responsible for the other information.
Our opinion on the financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the financial statements or our knowledge obtained in the course of audit or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

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Governance Report

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

•

the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and

the strategic report and the directors’ report have been prepared in accordance with applicable
legal requirements.

Matters on which we are required to report by exception

In light of the knowledge and understanding of the group and the parent company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or the
directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:

•

adequate accounting records have not been kept by the parent company, or returns adequate for
our audit have not been received from branches not visited by us; or

the parent company financial statements are not in agreement with the accounting records and returns;
or

•

certain disclosures of directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Responsibilities of Directors

As explained more fully in the directors’ responsibilities statement set out on pages 70-71, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and
fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s and the parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the group or the
parent company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of the financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud.

Based on our understanding of the group and the parent company and their industry, we considered that non-
compliance with the following laws and regulations might have a material effect on the financial statements:
employment regulation, health and safety regulation, anti-money laundering regulation, non-compliance with
Ofgem regulations.

To help us identify instances of non-compliance with these laws and regulations, and in identifying and
assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were
not limited to:

• Gaining an understanding of the legal and regulatory framework applicable to the group and the parent

company, the industry in which they operate, and the structure of the group, and considering the risk of
acts by the group and the parent company which were contrary to the applicable laws and regulations,
including fraud;

•

Inquiring of directors, management and, where appropriate, those charged with governance, as to
whether the group and the parent company is in compliance with laws and regulations, and discussing
their policies and procedures regarding compliance with laws and regulations;

Good Energy Annual Report 2023•

•

Inspecting correspondence, with relevant licensing or regulatory authorities, including Ofgem;

Reviewing minutes of directors’ meetings in the year; and

• Discussing amongst the engagement team the laws and regulations listed above, and remaining alert to

any indications of non-compliance.

We also considered those laws and regulations that have a direct effect on the preparation of the financial
statements, such tax legislation, pension legislation, the Companies Act 2006.

In addition, we evaluated the directors’ and management’s incentives and opportunities for fraudulent
manipulation of the financial statements, including the risk of management override of controls, and
determined that the principal risks related to posting manual journal entries to manipulate financial
performance, management bias through judgements and assumptions in significant accounting estimates, in
particular in relation to provision for expected credit losses, impairment considerations around the associate
investment, revenue recognition (which we pinpointed to the valuation of unbilled income), and significant
one-off or unusual transactions.

Our audit procedures in relation to fraud included but were not limited to:

• Making enquiries of the directors and management on whether they had knowledge of any actual,

suspected or alleged fraud;

• Gaining an understanding of the internal controls established to mitigate risks related to fraud;

• Discussing amongst the engagement team the risks of fraud; and

• Addressing the risks of fraud through management override of controls by performing journal entry testing.

There are inherent limitations in the audit procedures described above and the primary responsibility for the
prevention and detection of irregularities including fraud rests with management. As with any audit, there
remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions,
misrepresentations or the override of internal controls.

The risks of material misstatement that had the greatest effect on our audit are discussed in the “Key audit
matters” section of this report.

A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.

Use of the audit report

This report is made solely to the company’s members as a body in accordance with Chapter 3 of Part 16
of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
company and the company’s members as a body for our audit work, for this report, or for the opinions we
have formed.

Jonathan Barnard
(Senior Statutory Auditor)

For and on behalf of Mazars LLP

Chartered Accountants and Statutory Auditor

90 Victoria St

Bristol

BS1 6DP

26 April 2024

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Governance Report

Financial Statements

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Parent Company Statement of Financial Position

Consolidated Statement of Changes in Equity

Parent Company Statement of Changes in Equity

Consolidated Statement of Cash Flows

Parent Company Statement of Cash Flows

Notes to the Financial Statements

80
80

Good Energy Annual Report 2022

Good Energy Annual Report 2023Consolidated Statement of Comprehensive Income

For the year ended 31 December 2023

Revenue

Cost of sales

Gross profit

Administrative expenses

Other operating income

Operating profit

Finance income

Finance costs

Gain arising on loss of control of subsidiary

Share of loss of associate

Profit before tax

Taxation charge

Profit for the year
from continuing operations

Note

2023

£000’s

2022

£000’s

254,703

248,682

(210,458)

(218,768)

44,245

29,914

(37,282)

(28,109)

171

7,134

897

(321)

(2,027)

5,683

(2,807)

2,876

1,871

633

(351)

7,767

(712)

9,208

(637)

8,571

Profit from discontinued operations, before tax

Profit and total comprehensive income for the year
attributable to owners of the parent company

Attributable to:
Good Energy Group PLC

Attributable to:
Non-controlling Interests

Earnings per share Basic

Diluted

Earnings per share
(continuing operations)

Basic

Diluted

2,876

8,635

2,876

9,227

17.1p

17.0p

(592)

55.7p

55.6p

17.1p

51.7p

17.0p

51.7p

The notes on pages 91 to 144 form part of these financial statements.

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Financial statements

Consolidated Statement of Financial Position

As at 31 December 2023

Good Energy Group plc
Company registered no: 04000623

Note

2023

£000’s

180

1,227

5,694

131

10,551

17,783

11,026

35,858

5,912

41,346

94,142

2022

£000’s

117

324

3,503

162

12,578

16,684

9,212

57,497

8,462

24,487

99,658

111,925

116,342

845

12,975

28,185

42,005

5,687

531

63,702

64,233

844

12,915

(7)

25,234

38,986

4,927

294

72,135

72,429

Non-current assets

Property, plant and equipment

Right of use assets

Intangible assets

Deferred tax asset

Equity investments in associate

Total non- current assets

Current assets

Inventories

Trade and other receivables

Restricted deposit accounts

Cash at bank and in hand

Total current assets

TOTAL ASSETS

Equity and liabilities

Capital and reserves

Called up share capital

Share premium account

Employee Benefit Trust shares

Retained earnings

Total equity

Non- current liabilities

Borrowings and other financial liabilities

Total non- current liabilities

Current liabilities

Borrowings and other financial liabilities

Trade and other payables

Total current liabilities

Good Energy Annual Report 2023Consolidated Statement of
Financial Position (continued)

As at 31 December 2023

Good Energy Group plc
Company registered no: 04000623

Total liabilities

TOTAL EQUITY AND LIABILITIES

69,920

77,356

111,925

116,342

The financial statements on pages 81 to 90 were approved by the Board of Directors on 26 April 2024 and
signed on its behalf by:

Nigel Pocklington

Chief Executive
26 April 2024

The notes on pages 91 to 144 form part of these financial statements.

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Financial statements

Parent Company Statement of Financial Position

As at 31 December 2023

Good Energy Group plc
Company registered no: 04000623

Note

2023

£000’s

306

12,814

13.120

6,423

1,373

7,796

2022

£000’s

111

10,260

10,371

5,224

4,021

9,245

20,916

19,616

845

12,975

824

844

12,915

(7)

527

14,644

14,279

Non-current assets

Deferred taxation

Shares in group undertakings

Total non- current assets

Current assets

Trade and other receivables

Cash at bank and in hand

Total current assets

TOTAL ASSETS

Equity and Liabilities

Capital and reserves

Share capital

Share premium account

Employee Benefit Trust shares

Retained Earnings

Total Equity

Good Energy Annual Report 2023Parent Company Statement of
Financial Position (continued)

As at 31 December 2023

Good Energy Group plc
Company registered no: 04000623

Non- current liabilities

Borrowings

Total non- current liabilities

Current liabilities

Borrowings and other financial liabilities

Trade and other payables

Total current liabilities

Total liabilities

TOTAL EQUITY AND LIABILITIES

4,726

215

1,331

1,546

6,272

20,916

4,922

405

415

5,337

19,616

The Parent Company’s profit for the financial year was £222,000 (2022: loss of £3,289,000). The financial
statements on pages 81 to 90 were approved by the Board of Directors on 26 April 2024 and signed on its
behalf by:

Nigel Pocklington

Chief Executive
26 April 2024

The notes on pages 91 to 144 form part of these financial statements.

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Financial statements

Consolidated Statement of Changes in Equity

For the year ended 31 December 2023

Note

Share
capital

Share
premium
account

EBT
shares

Retained
earnings

Revaluation
surplus

Total equity
attributable
to members
of the
Parent
Company

Non-
controlling
interest

Total
equity

£000’s

£’000’s

£000’s

840

12,790

(444)

4,773

11,693

29,652

(325)

29,327

9,227

198

(297)

(128)

437

(232)

125

9,227

(592)

8,635

9,227

(592)

8,635

198

(297)

206

198

(297)

917

206

11,693

(11,693)

125

437

11,234

(11,693)

107

917

1,024

844

12,915

(7)

25,234

38,986

At 1 January
2022

Profit for the year

Total
comprehensive
income for
the year

Share based
Payments

Dividend paid

Scrip dividends
issued

Disposal of
subsidiary

Exercise
of options

Transfer of
revaluation to
retained earnings

Total
contributions by
and distributions
to owners of
the parent,
recognised
directly in equity

At 31 December
2022

The notes on pages 91 to 144 form part of these financial statements.

Good Energy Annual Report 2023Consolidated Statement of
Changes in Equity (continued)

For the year ended 31 December 2023

Note

Share capital

Share
premium
account

EBT shares

Retained
earnings

Total equity

£000’s

At 1 January 2023

844

12,915

(7)

25,234

38,986

Profit for the year

Total comprehensive
income for
the year

Share based payments

Deferred tax movement
charged to equity

Dividend paid

Scrip dividends issued

Exercise
of options

Total contributions by
and distributions to
owners of the parent,
recognised directly in
equity

At 31 December 2023

845

12,975

The notes on pages 91 to 144 form part of these financial statements.

2,876

341

239

(444)

(61)

143

28,185

42,005

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Financial statements

Parent Company Statement of Changes in Equity

For the year ended 31 December 2023

Note

Share
capital

Share
premium
account

EBT
shares

Retained
earnings

Total
equity

£000’s

At 1 January 2022

840

12,790

(444)

4,275

17,461

Profit for the year and total
comprehensive income

Share based payments

Scrip dividends issued

Exercise of options

Dividend paid

Total contributions by and
distributions to owners of the parent,
recognised directly in equity

125

437

(3,289)

198

(128)

(232)

198

206

(297)

125

437

(459)

107

At 31 December 2022

844

12,915

(7)

527

14,279

At 1 January 2023

844

12,915

(7)

527

14,279

Profit for the year and total
comprehensive income

Share based payments

Exercise of options

Deferred tax movement charged
to equity

Scrip dividends issued

Dividend paid

Total contributions by and
distributions to owners of the parent,
recognised directly in equity

At 31 December 2023

845

12,975

The notes on pages 91 to 144 form part of these financial statements.

222

341

239

222

341

239

(61)

(444)

143

824

14,644

Good Energy Annual Report 2023Consolidated Statement of Cash Flows

For the year ended 31 December 2023

Cash flows from operating activities

Cash generated from operations

20,634

Note

2023

£000’s

Finance income received

Finance costs paid

Corporation tax paid

Net cash flows generated from operating activities

Cash flows from investing activities

Purchase of property, plant and equipment

Purchase of intangible fixed assets

Investment in associate

Proceeds from disposal of held for sale assets

Acquisition of subsidiary, net of cash held in the
subsidiary

Net cash flows (used in)/generated from
investing activities

Cash flows from financing activities

Payment of dividends

Repayment of borrowings

Proceeds from borrowings

Capital repayment of leases

Proceeds from EBT shares

Proceeds from exercise of share options

Net cash flows used in financing activities

(1,086)

(2,337)

Net increase in cash and
cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

16,859

17,788

24,487

41,346

6,699

24,487

The notes on pages 91 to 144 form part of these financial statements.

2022

£000’s

5,180

(70)

5,127

(9)

(125)

(3,494)

20,351

434

(189)

(550)

20,329

(168)

(12)

(2,204)

(1,725)

(2,384)

14,998

(444)

(180)

134

(646)

(297)

(1,619)

(626)

205

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Financial statements

Parent Company Statement of Cash Flows

For the year ended 31 December 2023

Note

Cash flows from operating activities

Cash generated from/(used in) operations

Finance income received

Finance costs paid

Net cash flows generated from/(used in)
operating activities

Cash flows from investing activities

Investment in subsidiaries

Proceeds from disposal of held for sale assets

Equity investment in associate

Cash dividend received

Net cash flows (used in)/generated from
investing activities

Cash flows from financing activities

Proceeds from the exercise of share options

Proceeds from issue of shares

Payment of dividends

Repayment of borrowings

Net cash used in
financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

The notes on pages 91 to 144 form part of these financial statements.

2023

£000’s

496

(170)

341

(2,554)

2022

£000’s

(8,776)

(49)

(8,825)

(1,750)

20,351

(3,494)

(2,554)

15,107

(444)

(41)

(435)

(2,648)

4,021

1,373

205

(297)

(2,666)

(2,757)

3,525

496

4,021

Good Energy Annual Report 2023Notes to the Financial Statements

1. General Information

Good Energy Group PLC ("the Company") is listed on the Alternative Investment Market of the London Stock
Exchange, is incorporated in England and Wales and domiciled in the United Kingdom. The Group's shares
are publicly traded. The registered office is located at Good Energy, Monkton Park Offices, Monkton Park,
Chippenham, Wiltshire, United Kingdom, SN15 1GH.

The ultimate parent of the Group is Good Energy Group PLC. There is no ultimate controlling party of
the Group.

The principal activities of Good Energy Group PLC are those of a holding and management company to the
Group.

The principal activities of its subsidiaries include the purchase and sale of electricity from renewable sources,
as well as the sale of gas and services relating to micro-renewable generation, solar and heat pump
installation services and the sale of EV market data services.

The purpose of the Annual Report and Financial Statements is to provide information to members of the
Company and its subsidiaries (together "the Group"). It contains certain forward looking statements relating
to the operations, performance and financial condition of the Group. By their nature, these statements involve
uncertainty since future events and circumstances can differ from those anticipated. Nothing in the Annual
Report and Financial Statements should be construed as a profit forecast.

These financial statements are presented in pounds sterling, which is the functional currency and
presentational currency of the Group, as this is the currency of the primary environment in which the Group
operates. All values are rounded to the nearest thousand (£000), except where otherwise indicated.

The principal accounting policies applied in the preparation of the Consolidated and Company financial
statements are set out below. These policies have been consistently applied to all the years presented, unless
otherwise stated.

The financial statements were authorised for issue, in accordance with a resolution of directors, on 26 April
2024. The directors have the power to amend and reissue the financial statements.

2. Summary of Significant Accounting Policies

2.1 Basis of preparation of financial statements

These financial statements have been prepared in accordance with UK adopted International Financial
Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRIC) and with those parts of the Companies
Act 2006 applicable to companies reporting under IFRS.

The financial statements have been prepared on a going concern basis and under the historical cost
convention, or historic cost modified by revaluation of financial assets and financial liabilities held at fair value
through profit or loss.

The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the financial year.

Although these estimates are based on management’s reasonable knowledge of the amount, event or actions,
actual results ultimately may differ from those estimates. The critical accounting judgements, estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are discussed in note 4, and in the following accounting policy
notes: revenue recognition (2.4), property, plant and equipment (2.5), leases (2.6), inventories (2.10) and
credit risk (3.1.3).

As permitted by Section 408 of the Companies Act 2006, the Statement of Comprehensive Income of the
Parent Company is not presented as part of these financial statements. The Parent Company profit or loss for
the year (after taxation) is disclosed at the foot of the Parent Company Statement of Financial Position.

The accounting policies adopted, other than as documented above, are consistent with those of the annual
financial statements for the year ended 31 December 2022, as described in those financial statements.

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Financial statements

Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.2 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as
at 31 December 2023. Control is achieved when the Group is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if, and only if, the Group has:

•

Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of
the investee).

Exposure, or rights, to variable returns from its involvement with the investee.

The ability to use its power over the investee to affect its returns.

Generally, there is a presumption that a majority of voting rights result in control. To support this presumption,
and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an investee, including:

•

The contractual arrangement with the other vote holders of the investee.

Rights arising from other contractual arrangements.

The Group’s voting rights and potential voting rights.

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of the subsidiary.

Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in
the consolidated financial statements from the date the Group gains control until the date the Group ceases
to control the subsidiary.

Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders
of the Parent of the Group and to the non-controlling interests, even if this results in the non-controlling
interests having a deficit balance. When necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies into line with the Group’s accounting policies.

All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between
members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an
equity transaction.

If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities,
non-controlling interest and other components of equity while any resultant gain or loss is recognised in profit
or loss. Any investment retained is recognised at fair value.

Good Energy Annual Report 2023Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.3 Going concern

The financial statements have been prepared on the going concern basis as the Directors have assessed
that there is a reasonable expectation that the Group will be able to continue in operation and meet its
commitments as they fall due over the going concern period. The going concern assessment covers a period
of at least 12 months from the date of approval of the financial statements.

The Group has had a strong financial performance in 2023 despite significant pressure from commodity
markets and has continued its strategic growth into Energy services.

The unrestricted cash balance at the end of 2023 stood at £41.3m, giving the business a strong and stable
base to deliver on businesses commitments and to deliver its strategic objectives.

Looking to the future, the Group has performed a going concern review, going out until the end of 2025,
considering both a base case, and various externally provided scenarios. The scenarios were provided by
Ofgem in late 2023 as part of their review into the financial stability of UK Energy suppliers. Having reviewed
this forecast, the business can demonstrate that it can meet all tested scenarios with sufficient cash reserves in
place to support further unexpected challenges.

The scenarios are price-based impacts reflecting the volatility in the wholesale and supply market seen over
the past couple of years. All scenarios include existing hedge positions for Good Energy (Dec23). All scenarios
assume domestic customer churn continues at minimal levels as seen in the supply industry over the past 2
years. This low level of churn is expected to remain until wholesale prices stabilise and suppliers feel confident
in pricing below the current prices set by Ofgem. The scenarios assume no Government support schemes are
in place. The scenarios are:

Scenario 1 – Central Price

Scenario 2 – Low Price

Scenario 3 - High Price

Scenario 4 – Supplier Base Case

From a tariff perspective all scenarios reflect the movement in default/deemed price capped tariffs directly
linked to wholesale cost developments. These deemed and default price movements were provided by Ofgem
to ensure these key assumptions mirrored the wholesale cost scenarios. As Good Energy has derogation from
the price cap, it is allowed to change the level of its SVT tariff to reflect the true cost of supplying renewable
energy. This derogation allows Good Energy to change price sooner than changes to default/deemed tariff
changes, allowing us to match more effectively between cash in and cash out of the business.

In all scenarios cashflow remains sufficient to meet all commitments as they fall due without additional
mitigations being implemented or a need for additional funding sources to be found. Further to this, in all
scenarios the business could deliver additional mitigations which could include discretionary cost reductions,
additional price increases as well as working capital optimisation to further strengthen the cash position to
cover unexpected shocks.

Other impacts not included in the modelling include low wind output levels in a year. The company hedges
to seasonal normal levels of wind, solar and temperature. In 2021 there was a year of significantly lower
wind than seasonally normal which had a materially negative financial impact on the business. However, the
business has not modelled this as a going concern scenario for two reasons. The first is modelling to seasonal
norms will work over a longer-term basis, and secondly, we have taken significant steps to mitigate the
impacts of low wind within our portfolio and thus feel the scenario is already addressed.

All scenarios prudently reflect the repayment of £5m of bond debt in 2024/25, however formal redemptions
mean only £0.2m is officially due for repayment in 2024. Excluding bond debt, the business has no other
material (£1m+) debt repayments due in the next 18 months. The business has also taken a prudent approach
to customer credit balances with significant reductions forecast over 2024/25 before holding the remaining
balance stable.

Therefore, Directors are confident in the ongoing stability of the Group, and its ability to continue in operation
and meet its commitments as they fall due over the going concern period. Accordingly, the Directors adopt
the going concern basis in preparing the financial statements.

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Financial statements

Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.4 Revenue recognition

The Group is in the business of providing supplies of electricity and gas, the generation of power, the sale of
advertising space and EV market data, as well as Feed-in-Tariff (FiT) administration services. Revenue from
contracts with customers is recognised when control of the goods or services is transferred to the customer
at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those
goods or services. The Group has generally concluded that it is the principal in its revenue arrangements,
except for the FiT administration services below, because it typically controls the goods or services before
transferring to the customer.

The disclosures of significant accounting judgements, estimates and assumptions relating to revenue from
contracts with customers are provided in note 4.1.1.

A contract liability is the obligation to transfer goods or services to a customer for which the Group has
received consideration from the customer.

If a customer pays consideration before the Group transfers goods or services to the customer, a
contract liability is recognised when the payment is made. Contract liabilities are recognised as revenue
when the Group performs under the contract. The Group recognises contract liabilities when customers
are in a credit position.

2.4.1 Power supply

Revenue for the supply of electricity is accrued based on industry data flows and National Grid data. Revenue
calculated from energy sales includes an estimate of the quantity in units of electricity or gas supplied to
customers by profile class in the 12 months preceding the end of the period, and an estimate of the average
sales price per unit, and standing charge.

1% of the total revenue figure is estimated, with a fixed transaction price and estimated unit consumption.
The estimate is made using historical consumption patterns, industry estimated consumption rates, and takes
into consideration industry reconciliation processes, upon which the Group takes a prudent position until final
reconciliation data is available from the industry 14 months after the supply date.

Unbilled revenue is superseded when customer meter reads are received; at which point estimates are
adjusted to actual usage. Transaction price is explicitly stated per unit and per day. Unbilled revenue is
estimated using the most likely outcome approach.

For gas, revenue is accrued based on information received from the Group’s gas shipper, Barrow Shipping
Limited, which includes details of all the sites held, their estimated annual quantities of gas used adjusted by a
pre-determined weather correction factor. This information is subsequently adjusted and invoiced based on
customer and industry meter reads. Transaction price is explicitly stated per unit and per day.

Revenue is recognised over time as the electricity or gas is delivered to the customer. The transaction price
is clearly stated, there are no separate performance obligations to which a portion of the transaction price
needs to be allocated, and there is no variable consideration. Discounts are given to 100% of customers who
meet certain criteria, and a provision is built up monthly to account for these, offsetting against revenue over
time as the discount is incurred, which is in line with IFRS 15 Revenue from Contracts with Customers.

For electricity and gas supply, payment is collected either as a direct debit or paid on receipt of bill in arrears.
Overdue amounts are reviewed regularly for impairment and provision made as necessary. No refunds, returns
or warranties are applicable.

Power supply revenue is split between the electricity and gas segments within the segmental analysis in note 5.

2.4.2 Feed-in-Tariff revenue

The FiT scheme (introduced in April 2010) is a government scheme designed to promote the uptake
of renewable generation technologies. FiT payments are received quarterly for the electricity that the
generating asset has generated and exported in the period, based on meter readings supplied. This is a
single performance obligation (to generate renewable electricity) and the transaction price is explicitly set
out per unit of electricity generated. The performance obligation is satisfied immediately when the power is
generated. Payment is received from Ofgem approximately 45 days after the end of the period of generation.
No refunds, returns or warranties are applicable.

Good Energy Annual Report 2023Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.4 Revenue recognition (continued)

2.4.3 Feed-in-Tariff administration services

The Group provides FiT administration services to micro-generators who are signed up to the FiT scheme.
For FiT services, revenue is earned from Ofgem for administering the scheme, which is deemed to be the
transaction price. For FiT services, there is an initial fee paid by Ofgem for taking on a generator, and then an
ongoing amount that is received annually for provision of FiT services.

The initial fee is spread over the period from when the customer signs up with Good Energy until the following
April, when the FiT compliance year ends for a new customer, and the ongoing fee that is received is spread
over the 12 month compliance period. No refunds, returns or warranties are applicable.

FiT administration services is included within the FiT administration segment within the segmental analysis in
note 5.

2.4.4 Renewable Obligation Certificates (ROCs) revenue recognition

ROCs are awarded to the Group from Ofgem based on generation of power. These ROCs are sold on receipt
of certificates from Ofgem allowing transfer of title. ROC revenue is deemed to be subsidy revenue rather than
revenue from contracts with customers.

The amount of revenue recognised on sale is in accordance with a contractual agreement where the pricing
is based on Ofgem’s minimum ROC value (the buy-out) and a prudent estimate of the re-cycle element of the
final value of a ROC once all energy suppliers have complied or paid the penalty for non-compliance with the
renewables obligation (the recycle). A final adjustment to ROC revenue and profit is recognised
once Ofgem have announced the final out-turn ROC price, but this is not accounted for in advance of the
receipt of the final out-turn price as the transaction price is not measurable.

The performance obligation is satisfied when the power is generated as this ensures the certificates are
generated by Ofgem. There is a three-month delay from generation to invoice, and payment is made 5 days
after receipt of the invoice. No refunds, returns or warranties are applicable.

2.4.5 Advertising revenue

The Group has contracts to provide advertising space to companies on the nextgreencar.com website and
Zapmap app. Advertising contracts are entered into for adverts to run for a set period of time, and explicitly
state the transaction price. Payment is made on receipt of bill in advance. The performance obligation for
revenue recognition is satisfied over time based upon the amount of time that the advert has been running on
the platforms. No refunds, returns or warranties are applicable.

Advertising revenue is included within the energy as a service segment within the segmental analysis in note 5.

2.4.6 Sale of EV market data

The Group sells licences for access to data feeds on the EV market and sells data insight reports. The
transaction is explicitly stated in the contract. The performance obligation for the data feed licence is satisfied
over time as the customer has a licence to access data when they require for a set contracted time period.
Payment is made on receipt of bill in advance. The performance obligation for the sale of data insight
reports is satisfied at the point in time the report is delivered to the customer. No refunds, returns or
warranties are applicable.

Sale of EV market data revenue is included within the energy as a service segment within the segmental
analysis in note 5.

2.4.7 Sale of heat pumps and installation

The Group sells a range of air source heat pumps. Sales are recognised when control of the product is
transferred, being when the products are delivered to the customer and installed. Delivery and installation
occur when the products have been delivered to the specific location and installed, the risks of obsolescence
and loss have been transferred and the customer has accepted the products including objective evidence of
acceptance.

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Financial statements

Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.4 Revenue recognition (continued)

2.4.7 Sale of solar panels and installation

Revenue is measured at the fair value of the consideration received or receivable, and represents amounts
receivable for goods and services supplied, stated net of discounts and value added taxes.

The Group recognises revenue when performance obligations have been satisfied which is when the solar
panels have transferred to the customer, the installation services are complete and the customer has control
of the products. The Group provides solar panel installation and maintenance services across Dorset, Somerset,
Surrey, Hampshire, Wiltshire and Devon and revenue is recognised when the solar panels are installed and in
operational use. Maintenance services are one-off in nature and maintenance revenue is recognised as and
when required by the customer.

2.5 Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated
impairment losses. Cost includes the original purchase price of the asset and any costs attributable to bringing
the asset to its working condition for its intended use.

The Group recognises part of an asset when that cost is incurred, if the recognition criteria are satisfied. The
carrying amount of the replaced part is derecognised. All other repaid and maintenance costs are charged to
profit or loss in the period in which they are incurred.

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset, less any estimated
residual value, on the following bases:

Fixtures, fittings and equipment

between 3 and 5 years

Leasehold improvements

Assets under construction

over the life of the lease

not depreciated

Depreciation of property, plant and equipment is included in the Consolidated Statement of Comprehensive
Income in those expense categories consistent with the function of the asset.

An item of property, plant and equipment is derecognised upon disposal (i.e. at the date on which the
recipient obtains control), or when no future economic benefits are expected from its use or disposal. Any gain
or loss arising on derecognition (being the difference between the carrying amount of the asset and the net
disposal proceeds) is included in profit or loss, upon derecognition.

2.5.1 Impairment of property, plant and equipment (including right-of-use assets)

The useful economic lives of assets and their residual values are reviewed on an annual basis and revised
where considered appropriate.

At each reporting date, property, plant and equipment is reviewed for impairment if events or changes in
circumstances indicate that the carrying amount may not be recoverable. Any impairment in carrying value is
charged to the Statement of Comprehensive Income in those expense categories consistent with the function
of the impaired asset, and is recognised in the period in which it occurs.

Good Energy Annual Report 2023

Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.6 Leases (the Group as a lessee)

For any new contracts entered into on or after 1 January 2019, the Group performs an assessment at the
inception of a contract to determine whether the contract is, or contains, a lease. A lease is defined as “a
contract, or part of a contract, that conveys the right to control the use of an identified asset for a period of
time in exchange for consideration”.

The Group applies a single recognition and measurement approach for all leases, with the exception of those
which are short-term, or which comprise low-value assets. The Group recognises lease liabilities to make lease
payments and right-of-use assets representing the right to use the underlying assets.

(a) Right-of-use assets

At the lease commencement date (i.e. the date on which the underlying asset is made available for use), the
Group recognises a right-of-use asset on the Statement of Financial Position. Right-of-use assets are measured
at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of
lease liabilities.

The cost of the right-of-use asset comprises:

•

the initial measurement of the lease liability,

any initial direct costs incurred by the Group,

an estimate of any costs required to dismantle or remove the asset at the end of the lease; and

any lease payments made in advance of the lease commencement date, net of any incentives received.

Right-of-use assets are depreciated on a straight-line basis from the lease commencement date to the earlier
of the end of the estimated useful life of the right-of-use assets and the end of the lease term. If ownership
of the leased asset transfers to the Group at the end of the lease term, or the cost reflects the exercise of a
purchase option, depreciation is calculated using the estimated useful life of the asset.

The Group classifies its right-of-use assets in a manner consistent with that of its property, plant and
equipment, which includes the application of the same estimated useful life bases - please see note
2.5 for details.

The Group also assesses the right-of-use assets for impairment, when such indicators exist. Please refer to note
2.5.1 for the accounting policy in respect of impairment.

(b) Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value
of the lease payments to be made over the lease term. Lease payments included in the measurement of the
lease liability include:

•

fixed payments (including in-substance fixed payments) less any incentives receivable,

variable lease payments that depend on an index or rate; and

amounts expected to be paid under residual value guarantees.

The lease payments also include the exercise price of a purchase option that is reasonably certain to be
exercised by the Group, along with payments of penalties for termination of the lease if the lease term reflects
the Group exercising the option to terminate. Variable lease payments that do not depend on an index or rate
are recognised as expenses in the period in which the event of condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the
lease commencement date if the rate implicit in the lease is not readily determinable. Subsequent to initial
measurement, the amount of lease liabilities is increased to reflect the accretion of interest and reduced to
reflect lease payments made.

The carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a
change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate
used to determine the lease payments) or a change in the assessment of an option to purchase the
underlying asset.

In the Statement of Financial Position, the Group’s lease liabilities are included within borrowings (please refer
to note 23).

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Financial statements

Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.6 Leases (the Group as a lessee) (continued)

The Group has elected to apply the recognition exemption in respect of short-term leases (i.e. those which
have a lease term of 12 months from the lease commencement date, and do not contain a purchase option),
as well as the recognition exemption applicable to leases of assets that are considered to be low value.

Instead of recognising a right-of-use asset and lease liability, lease payments in relation to these are
recognised as an expense in the Statement of Comprehensive Income, on a straight-line basis over the
lease term.

2.7 Goodwill, intangible assets and amortisation

Goodwill is measured as the difference between:

•

the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, and

the aggregate of:

(i) the value of consideration transferred (at fair value),

(ii) the amount of any non-controlling interest, and

(iii) in a business combination achieved in stages, the acquisition date fair value of the acquirer's

previously held equity interest in the acquiree.

2.7.1 Definite life intangible assets

Definite life intangible assets comprise software licences and website development costs, which meet the
criteria of IAS 38 Intangible Assets, and are carried at cost less accumulated amortisation and impairment
losses. Cost comprises purchase price from third parties as well as directly attributable internally generated
development costs, where relevant.

2.7.2 Indefinite life intangible assets

Indefinite life intangible assets comprise goodwill and the power supply licence. The power supply licence is
held as an indefinite life intangible asset according to the criteria of IAS 38 Intangible Assets, and is carried at
cost less accumulated impairment losses. Cost comprises purchase price from third parties as well as directly
attributable internally generated development costs, where relevant.

2.7.3 Amortisation

Amortisation on definite life intangible assets is charged to the Consolidated Statement of Comprehensive
Income (included within administrative expenses) on a straight-line basis over the estimated useful life of the
intangible asset. The estimated useful lives for intangible assets with definite lives are as follows:

Software licenses

Website development costs

Brand

Customer relationships

Order backlog

between 3 and 10 years

between 2 and 5 years

between 10 and 15 years

between 5 and 10 years

between 0 and 1 year

Assets under the course of development

not amortised

An intangible asset is derecognised upon disposal (i.e. at the date on which the recipient obtains control),
or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition (being the difference between the carrying amount of the asset and the net disposal proceeds)
is included in profit or loss, upon derecognition.

Good Energy Annual Report 2023

Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.7 Goodwill, intangible assets and amortisation (continued)

2.7.4 Impairment of intangible assets

The Directors regularly review intangible assets for impairment and provision is made if necessary. Assets
with indefinite useful lives are not subject to amortisation, therefore are tested annually for impairment. Assets
that are subject to amortisation are reviewed for impairment whenever events or changes in circumstance
indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset's fair value less costs to sell, and value in use. For
the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows (cash-generating units). Non-financial assets other than goodwill that suffered an
impairment are reviewed for possible reversal of the impairment at the end of each reporting period. Any
impairment in carrying value is charged to the Statement of Comprehensive Income within administrative
expenses and is recognised in the period in which it occurs.

2.8 Investments in subsidiaries

The Parent Company holds investments in subsidiary companies, and these are accounted for at cost less
impairment in the Parent Company financial statements only.

2.9 Investments in associates

An associate is an entity over which the Group has significant influence. Significant influence is defined as “the
power to participate in the financial and operating policy decisions of the investee, but is not control or joint
control of those policies”.

The considerations made in determining significant influence are similar to those necessary to determine
control over subsidiaries. Generally, there is a presumption that a holding of 20% or more of the voting power
of the investee results in significant influence.

To support this presumption - and when the Group has less than a 20% holding - the Group considers all
relevant facts and circumstances in assessing whether it has significant influence, including:

• Representation on the Board of Directors or equivalent governing body of the investee.

• Participation in policy making processes.

• The interchange of managerial personnel.

The Group reassesses whether or not there is significant influence over an investee if facts and circumstances
indicate that there are one or more changes to the above.

The Group’s investments in associates are accounted for using the equity method. Under this method, the
investment in the associate is initially recognised at cost. Subsequent movements in the carrying value of
the investment are accounted for by recognising the Group’s share of the associate’s profit or loss since the
acquisition date, as well as any fair value movements in the associate’s net assets.

Gains or losses from the associate’s operating activities are recognised in the Consolidated Statement of
Comprehensive Income, outside of operating profit. Any changes in OCI of the associate is presented as part
of the Group’s OCI.

Goodwill relating to the associate is included in the carrying value of the investment, and is not separately
tested for impairment. Rather, the entire carrying amount of the investment is tested for impairment.

2.9.1 Impairment of investments in associates

The Group recognises an impairment loss if, and only if, there is a triggering event giving rise to objective
evidence that the associate is impaired, and that the triggering event has an impact on the future estimated
cash flows from the net investment that can be reliably estimated. Where such evidence exists, the Group
calculates the amount of the impairment as the difference between the recoverable amount of the
investment (being the higher of its value in use and its fair value less costs to sell) and its carrying value.

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Financial statements

Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.9 Investments in associates (continued)

Any impairment is recognised within the “Share of loss of Associate” line in the Consolidated Statement of
Comprehensive Income. In 2022, the Group lost control of Zapmap as a subsidiary following a successful
funding round. It is now accounted for as an associate under the equity method.

2.10 Inventories

2.10.1 Renewable Obligation Certificates (ROCs)

Under the provisions of the Utilities Act 2000, all electricity suppliers are required to procure a set percentage
of their supplies from accredited renewable electricity generators. This obligation can be fulfilled by the
purchase and surrender of ROCs originally issued to generators, or by making payments to Ofgem who
then recycle the payments to purchasers of ROCs. Notwithstanding that Good Energy Limited, a subsidiary
company, supplies electricity sourced entirely from renewable generation over a 12 month period, its
percentage obligation to submit ROCs is set by Ofgem. The cost obligation is recognised as electricity is
supplied and charged as a cost of sale in the Consolidated Statement of Comprehensive Income. Any gains
or losses on disposal of ROCs which are in excess of the Group’s compliance obligations are included as an
adjustment to the compliance cost included within cost of sales. Externally generated ROCs are valued at the
lower of purchase cost and estimated realisable value.

2.10.2 Carbon Offset Instruments

Carbon Offset Instruments are used by the Group to offset emissions generated by gas supply, as part of
the Group’s green gas offering. These instruments are recognised as inventory at the lower of cost and net
realisable value.

2.11 Financial instruments

The Group uses certain financial instruments in its operating and investing activities that are deemed
appropriate for its strategy and circumstances.

Financial instruments recognised on the Consolidated Statement of Financial Position include: cash and cash
equivalents, trade receivables, trade payables, borrowings, and financial assets and financial liabilities at fair
value through profit and loss.

Financial assets and liabilities are recognised on the Consolidated Statement of Financial Position when the
Group has become a party to the contractual provisions of the instrument.

2.11.1 Financial assets at amortised cost

The Group’s financial assets at amortised cost comprise trade and other receivables and cash and cash
equivalents in the Consolidated Statement of Financial Position. These assets are non-derivative financial
assets with fixed or determinable payments that are not quoted in an active market, and are solely payments
of principal and interest. They arise principally through the provision of goods and services to customers
(e.g. trade receivables), but also incorporate other types of contractual monetary asset. They are initially
recognised at fair value and are subsequently carried at amortised cost using the effective interest rate
method, less allowances for expected credit losses (ECLs). These are held in a business model which intends
to hold the financial assets to collect the contractual cash flows rather than through sale. Trade receivables
are shown inclusive of unbilled amounts to customers.

The Group recognises an allowance for ECLs for all financial assets measured at amortised cost. ECLs are
based on the difference between the contractual cash flows due in accordance with the contract and all
the cash flows that the Group expects to receive.

For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs.
Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based
on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its
historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the
economic environment.

For trade receivables, which are reported net, such provisions are recorded in a separate allowance
account with the loss being recognised within administrative expenses in the Consolidated Statement of
Comprehensive Income. On confirmation that the trade receivable will not be collectable, the gross carrying
value of the asset is written off against the associated provision.

100

Good Energy Annual Report 2023
Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.11 Financial instruments (continued)

The expected credit loss on intercompany receivables is measured at an amount equal to the 12 months
expected credit loss where the credit risk has not increased significantly since initial recognition, otherwise it is
measured at an amount equal to the lifetime expected credit losses.

Cash and cash equivalents comprise cash on hand and on demand deposits, and other short-term, highly
liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant
risk of changes in value.

Restricted deposits are held by financing providers to cover debt service and maintenance expenses on
generation sites to which the funding relates. Short-term security deposits are held by trading exchanges to
cover short-term electricity trades.

2.11.2 Trade and other payables

Trade payables are obligations to pay for goods or services that have been acquired in the course of ordinary
business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year
or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at fair value
and subsequently held at amortised cost.

2.11.3 Borrowings

The Group expenses borrowing costs over the term of the loan facility. Where borrowing costs are
attributable to the acquisition, construction or production of a qualifying asset, such costs are capitalised as
part of the specific asset. Details of the Group’s borrowings are included in note 23.

2.12 Disposal groups held for sale

Disposal groups are classified as held for sale when their carrying amount is to be recovered principally
through a sale transaction and the sale is highly probable. Disposal groups classified as held for sale are stated
at the lower of carrying amount and fair value less costs to sell. They are not depreciated or amortised.

2.13 Non-underlying costs

Non-underlying items are those that in the Directors’ view should be separately disclosed by virtue of their size,
nature or incidence to enable a full understanding of the Group’s financial performance.

2.14 Current and deferred taxation

The tax charge or credit included in the Consolidated Statement of Comprehensive Income for the period
comprises current and deferred tax. Current and deferred tax is charged or credited to the Consolidated
Statement of Comprehensive Income, except when it relates to items charged or credited directly to equity, in
which case the current or deferred tax is also recognised within equity.

Current tax is the expected tax payable or receivable based on the taxable profit for the period. Taxable profit
differs from net profit as reported in the Statement of Comprehensive Income as it excludes items of income
or expense that are taxable or deductible in other years, and it further excludes permanent differences (i.e.
items that are never taxable or deductible).

Current income tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the taxation authorities. The tax rates and tax laws used to compute these amounts are those that
are enacted or substantively enacted at the reporting date in the countries where the Group operates and
generates taxable income.

Management periodically evaluates positions taken in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

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101

Financial statements

Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.14 Current and deferred taxation (continued)

Deferred tax is the expected tax payable or recoverable on temporary differences which arise between the
carrying amount of assets and liabilities in the financial statements, and the corresponding tax bases used in
the computation of taxable profit, and is provided for using the liability method. extent that it is probable that
taxable profits will be available against which deductible temporary differences can be utilised.

Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets
are recognised to the extent that it is probable that taxable profits will be available against which deductible
temporary differences can be utilised.

Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the
initial recognition (other than in a business combination) of other assets and liabilities in a transaction which
affects neither the tax profit nor the accounting profit. Deferred tax liabilities are recognised for taxable
temporary differences arising in investments in subsidiaries except where the Group is able to control the
reversal of the temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each financial period and reduced to
the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the
asset to be recovered. Deferred tax is calculated based on tax rates and tax laws that are expected to apply
in the period when the asset is realised or the liability is settled.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax
assets against current tax liabilities and when they relate to income taxes levied by the same taxation
authority. The Group intends to settle its current tax assets and current tax liabilities on a net basis.

2.15 Share-based payments

The Group applies IFRS 2 to share-based payments. The Group operates a share-based payment
compensation plan, under which the entity grants key employees the option to purchase shares in the
Company at a specified price maintained for a certain duration.

The Group operates an equity-settled, share-based compensation plan, under which the entity receives
services from employees as consideration for equity instruments (options) of the Group. The fair value of the
employee services received in exchange for the grant of the options is recognised as an expense. The total
amount to be expensed is determined by reference to the fair value of the options granted:

•

including any market performance conditions (e.g. an entity’s share price);

excluding the impact of any service and non-market performance vesting conditions (e.g. profitability,
sales growth targets and remaining an employee of the entity over a specified time period), and

including the impact of any non-vesting conditions (e.g. the requirement for employees to save).

Non-market performance and service conditions are included in assumptions about the number of options
that are expected to vest. The total expense is recognised over the vesting period, which is the period over
which all of the specified vesting conditions are to be satisfied.

At the end of each financial period, the Group revises its estimates of the number of options that are expected
to vest based on the non-market vesting conditions. It recognises the impact of the revision to original
estimates, if any, in the Consolidated Statement of Comprehensive Income, with a corresponding adjustment
to equity.

When the options are exercised, and the Group issues new shares to meet that obligation, the proceeds
received net of any directly attributable transaction costs are credited to share capital (nominal value) and
share premium.

102

Good Energy Annual Report 2023
Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.16 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary
shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.17 Pensions

The Group operates a defined contribution pension scheme. Under this scheme the Group pays contributions
to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis.
The Group has no further payment obligations once the contributions have been paid. The contributions are
recognised as an employee benefit expense when they are due. The pension charge for the year represents
the amounts payable by the Group in respect of the year.

2.18 Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision maker. The chief operating decision maker has been identified as the Board of
Directors. The Board of Directors review the Group’s internal reporting in order to assess performance
and allocate resources.

2.19 Finance income and finance costs

Finance income is received in respect of cash deposits and is recognised in the Statement of Comprehensive
Income using the effective interest method. Finance costs comprise interest on external debt, finance lease
interest costs and the amortisation of loan issue costs. Finance costs are charged to the Statement of
Comprehensive Income over the term of the debt using the effective interest method. Issue costs are initially
recognised as a reduction in the proceeds of the associated capital instrument.

2.20 Dividend distribution

Dividend distribution to the Parent Company’s shareholders is recognised as a liability in the Group’s financial
statements in the period in which the dividends are approved by the Parent Company’s shareholders.

2.21 Changes in accounting policies and disclosures

New and amended standards and interpretations

The following new and amended standards and interpretations that are effective from 1 January 2023
have been applied with no impact on the financial statements. The Group has not early adopted any other
standard, interpretation or amendment that has been issued but is not yet effective. Standards issued but not
yet effective are not exptected to have a material impact on the financial statements.

Standards applicable for the first time in 2023:

•

IFRS 17 Insurance Contracts (issued May 2017) and Amendments to IFRS 17 Insurance Contracts (Issued
June 2020)

• Amendments to IFRS 17 Insurance Contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative

Information (Issued December 2021)

• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making

Materiality Judgements: Disclosure of Accounting Policies (Issued February 2021)

• Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of

Accounting Estimates (Issued February 2021)

• Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single

Transaction (Issued May 2021)

• Amendments to IAS 12 Income Taxes: International Tax Reform - Pillar Two Model Rules (Issued May 2023)

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103

Financial statements

Notes to the Financial Statements

3. Financial and Capital Risk Management

3.1 Financial risk factors

The Group’s activities expose it to a variety of financial risks: liquidity risk, market risk (including currency risk,
cash flow and fair value interest rate risk, and commodity price risk) and credit risk. The Group’s overall risk
management programme focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the Group’s financial performance.

3.1.1 Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet cash flow commitments
associated with financial instruments. The Group has cash resources available to it and prepares - in the
operating entities of the Group - forecasts for the forthcoming year. In the Directors' opinion, these forecasts
indicate that the Group will have sufficient resources to fund the continuation of trade.

The Group monitors cash flow forecasts on a 'rolling forecast' basis to ensure it has sufficient cash to meet
operational needs while maintaining enough headroom on its undrawn committed borrowing facilities at all
times so as not to breach borrowing limits or covenants.

A maturity analysis of financial instruments based on contractual undiscounted cash flows is provided below:

Consolidated
31 December 2023

Less than
1 year

Between
1 and 2 years

Between
2 and 5 years

Over 5 years

£000’s

Bank loan

Corporate bond

Lease liabilities

Trade and other payables

Total

220

389

63,702

64,322

5,063

1,055

6,134

Consolidated
31 December 2022

Less than
1 year

Between
1 and 2 years

Between
2 and 5 years

Over 5 years

Corporate bond

Lease liabilities

£000’s

284

Trade and other payables

72,119

£000’s

5,272

Total

72,413

5,278

£000’s

104

Good Energy Annual Report 2023Notes to the Financial Statements

3. Financial and Capital Risk Management (continued)

3.1 Financial risk factors (continued)

3.1.1 Liquidity risk (continued)

Parent
31 December 2023

Less than
1 year

Between
1 and 2 years

Between
2 and 5 years

Over 5 years

Corporate bond

Trade and other payables

Total

£000’s

220

1,331

1,551

£000’s

5,063

£000’s

Parent
31 December 2022

Less than
1 year

Between
1 and 2 years

Between
2 and 5 years

Over 5 years

Corporate bond

Trade and other payables

Total

£000’s

397

407

£000’s

5,272

£000’s

IFRS 16 requires that the maturity analysis of lease liabilities are disclosed separately from the maturity
analyses of other financial liabilities.

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105

Financial statements

Notes to the Financial Statements

3. Financial and Capital Risk Management (continued)

3.1 Financial risk factors (continued)

3.1.2 Market Risk

3.1.2a Cash flow and fair value interest rate risk

The financial risk is the risk to the Group’s earnings that arises from fluctuations in interest rates and the
degree of volatility of these rates. For short-term bank overdraft facilities, the Group does not use derivative
instruments to reduce its exposure to interest rate fluctuations as the policy of the Group is not to rely on short-
term borrowing facilities for any significant duration. The Directors use interest rate swaps if they consider their
exposure to interest rate risk to be material. For long term borrowings, the Group may use interest rate swaps
to fix the interest rate payable on these material balances in order to mitigate the risk of any fluctuations in
interest rates. There were no such swaps at the year end and the interest rate risk at 31 December 2023 is
considered to be nil. None of the group’s cash balances or restricted deposit accounts are exposed to interest
rate risk. The interest rate on the bond is 4.75% and the only other exposure to this risk is on a small amount of
interest income which is considered immaterial to warrant the preparation of a sensitivity analysis.

3.1.2b Commodity price risk

The Group’s operations result in exposure to fluctuations in energy prices. Management monitors energy prices
and analyses supply and demand volumes to manage exposure to these risks. The Group typically buys power
forwards in order to mitigate some of the risk of commodity price fluctuations.

If the wholesale market moves significantly upwards or downwards, the price risk to the Group will depend
upon a number of factors including the excess or deficiency of power being supplied by renewable power
purchase contracts in place at the time. The Group may be required to pass on the price risk to customers.
Retail prices can be amended with 30 days’ advance notification to customers. The Group closely
monitors movements in the wholesale market and assesses trends, so it is ready to take necessary action
when required.

Vertical integration of the Group during 2022 and 2023 helped further mitigate exposure to changes in power
prices. Fluctuations in commodity prices flow directly into the price cap set by Ofgem, therefore commodity
risk will be offset by revenue fluctuations as the price cap adjusts for commodity cost movements. A sensitivity
analysis on commodity price risk is therefore not considered necessary.

3.1.3 Credit risk

The Group’s exposure to credit risk arises from its receivables from customers. At 31 December 2023 and
31 December 2022, the Group’s trade and other receivables were classed as due within one year, details
of which are included in note 19. The Group’s policy is to undertake credit checks where appropriate on
new customers and to provide for expected credit losses (ECLs) based on estimated irrecoverable amounts
determined by reference to specific circumstances and past debt collection experience. Credit risk is also in
part mitigated by the policy to offer direct debit as a preferred method of payment for customers. At the end
of the reporting period the Directors have provided for specific expected credit losses and believe that there is
no further credit risk.

The Group’s management would consider a default to occur should a customer debt remain unpaid after 12
months. This is appropriate due to the seasonal nature of the business and the use of direct debit as a common
method of payment. Write offs are performed on an individual customer basis upon cessation of trade in the
case of business customers, or if extensive debt collection efforts are unsuccessful.

Credit risk also arises from cash and cash equivalents, and deposits with banks and financial institutions.
The Directors monitor the credit quality of the institutions used when considering which banks and financial
institutions funds should be placed with.

The ECL model has been calculated in line with requirements under IFRS 9. The Group’s trade receivables
have no significant financing component, so the Group has used the simplified method for providing for these
under IFRS 9. Therefore, the impairment loss is measured at lifetime ECL. Trade debtors have been segmented
into categories of customer type and debt age, meaning the debt is split into categories with similar expected
credit losses.

106

Good Energy Annual Report 2023Notes to the Financial Statements

3. Financial and Capital Risk Management (continued)

3.1.3 Credit risk (continued)

An impairment analysis is performed at each reporting date using a provision matrix to measure the expected
credit losses. The calculation reflects the probability-weighted outcome, the time value of money, and
reasonable and supportable information that is available at the reporting date about past events, current
conditions and forecasts of future economic conditions.

Intercompany balances owed to Good Energy Group PLC are reviewed regularly to monitor credit risk for the
Parent Company.

3.2 Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns to shareholders, and to maintain an optimal capital structure.

The Group monitors capital on the basis of the gearing ratio calculated as net debt divided by total capital.
Net debt is calculated as total borrowings (including 'current and non-current borrowings' as shown in the
Consolidated Statement of Financial Position) less cash and cash equivalents. Total capital is calculated as
'equity' as shown in the Consolidated Statement of Financial Position, plus net debt. The capital structure of
the Group is as follows:

Total borrowings

Less: cash in restricted deposit accounts (current)

Less: cash and cash equivalents

Net debt

Total equity

Total capital

Gearing ratio

Note

2023

£000’s

6,218

2022

£000’s

5,221

(5,912)

(8,462)

(41,346)

(24,487)

(41,040)

(27,728)

42,005

965

38,987

11,259

(4257%)

(246.3%)

The Group's borrowings are subject to maintaining covenants as defined by the debt funders. Throughout the
year ended 31 December 2023 the Group complied with all external borrowing covenants and management
monitors the continued compliance with these covenants on a quarterly basis.

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107

Financial statements

Notes to the Financial Statements

4. Critical Accounting Judgements and Estimates

In the process of applying the Group’s accounting policies, management has to make judgements and
estimates that have a significant effect on the amounts recognised in the financial statements. These
judgements and estimates are evaluated continually and are based on historical experience and other factors,
including expectations of future events.

Given the nature of the estimates and judgements made, it is not appropriate to provide sensitivity analyses,
unless explicitly stated otherwise. Actual results may differ from the initial judgement or estimate, and any
subsequent changes are accounted for at a time when updated information becomes available.

The most critical of these accounting judgements and estimates are detailed below.

4.1 Judgements

4.1.1 Judgements over revenue from contracts with customers

The Group applied the following judgements that affect the determination of the amount and timing of
revenue from contracts with customers:

(a) Identifying performance obligations in contracts

Good Energy’s revenues from contracts with customers include unit charges and standing charges for the
supply of electricity and gas and FiT administration fees. Most of these performance obligations are easily
identifiable and are separable.

For FiT administration revenue from customers who are new to the FiT scheme, Good Energy is required
to both register and administer that customer for a year, and there is a higher administration payment
from Ofgem as a result. Registering a customer to the FiT scheme and administering their account are not
separable performance obligations, as there is no fee for registering and not administering the customer.

(b) Principal versus agent considerations

Contracts are entered into with customers to supply electricity and gas, which is a service delivered over time
(as the customer consumes the electricity or gas), in which the Group is the principal.

FiT administration contracts are entered into with the customer, to supply administration services on behalf of
Ofgem. The Group acts as an agent for Ofgem, not a principal, because the Group is not entitled to revenue
from the customers’ FiT sites, only the administration fee.

Payment normally takes place after performance by the Group; NHH customers with 15-day payment terms
and HH customers with 30-day payment terms. Some customers pay by monthly direct debit and the Group
aims to recover billed amounts every 3 months. Contract assets and liabilities are based on timing of meter
reads and changes in volumes due to factors such as weather therefore it is not possible to quantify year on
year movements. Due to the nature of the business and the amount of customer accounts, it is not possible to
quantify individual factors causing movements on contract assets and contract liability balances between the
periods.

108

Good Energy Annual Report 2023Notes to the Financial Statements

4. Critical Accounting Judgements and Estimates (continued)

4.2 Estimates

Critical estimates:

4.2.1 Estimates over revenue from contracts with customers

Revenue calculated from energy sales includes an industry estimate of the quantity in units of electricity or
gas supplied to the Group's customers during the 12 months preceding the end of the reporting period. It also
includes an estimate in the form of the average sales price per unit, and standing charge.

1% of the total revenue figure is estimated, with a fixed transaction price and estimated unit consumption.

The estimate is made using historical consumption patterns, industry estimated consumption rates, seasonality
data available, and takes into consideration industry reconciliation processes, upon which the Group takes a
prudent position until final reconciliation data is available from the industry 14 months after the supply date.

The Group identified the amount of accrued income subject to estimation uncertainty is approximately £1.6m
out of a total carrying amount of £23m held on the balance sheet at the year end included within note 19. It is
reasonably possible, on the basis of existing knowledge, that outcomes within the next financial year that are
different from the assumptions used could require a material adjustment to the carrying amount of the asset.

4.2.2 Provision for expected credit losses of trade and intercompany receivables, and contract assets

The Group uses a provision matrix to calculate expected credit losses (ECLs) for trade receivables. The
provision rates are based on days past due for groupings of various customer segments that have similar loss
patterns (e.g. by customer type).

The provision matrix is initially based on the Group’s historic observed default rates, calibrated to adjust the
historic credit loss experience with forward-looking information. For instance, if forecast economic conditions
are expected to deteriorate over the next year which can lead to an increased number of defaults, the
historical default rates are adjusted. At every reporting date, the historical observed default rates are updated
and changes in the forward-looking estimates are analysed.

The group has considered external benchmarks for future macro-economic indicators and concluded that
the inclusion of a domestic macroeconomic overlay was not appropriate in the ECL calculation as at 31
December 2023 due to falling wholesale prices and the resulting decrease in Ofgem’s energy price cap.
In addition, wider macroeconomic pressures such as inflation are likely to continue to fall during 2024. A
commercial overlay was included in the ECL calculation in the current year reflecting a significant increase in
UK small and medium-sized enterprises (SMEs) entering into voluntary liquidation during 2023.

It is reasonably possible, on the basis of existing knowledge, that outcomes within the next financial year that
are different from the assumptions used could require a material adjustment to the carrying amount of the
asset.

The assessments undertaken in recognising provisions have been made in accordance with IFRS 9. A provision
for impairment of trade receivables is established based on an expected credit loss model. Information about
the ECLs on the Group’s trade receivables is disclosed in note 19.

The Parent Company also holds material receivable balances with its subsidiaries, for which the expected
credit loss model is also used in establishing a provision for impairment, in accordance with IFRS 9. Information
about the Parent Company loans to Group undertakings can be found per note 16.

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109

Financial statements

Notes to the Financial Statements

4. Critical Accounting Judgements and Estimates (continued)

4.2 Estimates (continued)

4.2.3 Impairment of indefinite life assets

The carrying values of indefinite life assets included in intangible assets as disclosed in Note 15 are: goodwill of
£4,633,000 (2022: £2,866,000). Within the total goodwill value of £4,633,000, £1,061,000 is allocated to Good
Energy Limited, £1,805,000 is allocated to Good Energy Works Limited and £1,767,000 is allocated to Wessex
ECOEnergy Limited, and a power supply license of £180,000 (2022: £180,000) is allocated to Good Energy
Limited. Cash generating units (CGUs) are allocated at legal entity level.

In arriving at the conclusion that these assets have an indefinite life, management have observed that
the power supply license is awarded until any breach of conditions stipulated by Ofgem. The treatment of
goodwill is aligned with relevant accounting standards. An impairment review is undertaken annually or more
frequently.

The result of this review was that no impairment is required in respect of the carrying values of the indefinite
life assets.

Indefinite life assets are held within a CGU of £1,061k within Good Energy Limited. An impairment review has
been carried out.

The key assumptions for value in use excluding goodwill in Good Energy Limited are as follows:

• Growth rate beyond five-year plan: 1.0%

•

Pre-tax discount rate: 4.75%

The projected cash flows have been adjusted to allow for normalised business (i.e. no new business activity
costs or revenue are included), and are considered a prudent case. It was concluded that the future cash
flows do exceed the value of indefinite life assets, and therefore no impairment is required.

Sensitivity analysis has been conducted on the cost of capital for Good Energy Limited and the Directors noted
that an increase of the pre-tax discount rate to 100% would leave significant headroom before impairment
is required. Also the terminal growth rate could decrease to -5% with headroom remaining. Directors believe
there to be significant headroom and therefore no impairment is required.

Indefinite life assets are also held within a CGU of £1,805k for goodwill in relation to the subsidiary Good
Energy Works Limited.

The key assumptions used in the impairment review are as follows:

• Growth rate beyond five-year plan: 1.0%

•

Pre-tax discount rate: 8%

Sensitivity analysis has been conducted on the cost of capital for Good Energy Works Limited and the
Directors noted that an increase of the post-tax discount rate to 45% would leave significant headroom
before impairment is required. Also the terminal growth rate could decrease to -5% with headroom remaining.
Directors believe there to be significant headroom and therefore no impairment is required.

The final indefinite life asset is held within a CGU of £1,767k for goodwill in relation to Wessex
ECOEnergy Limited, a subsidiary acquired during the year. An external purchase price allocation
valuation exercise was obtained to support the fair values of separately identifiable intangible assets
arising on acquisition included within note 15. The impairment exercise carried out supports the carrying
value of goodwill recognised in respect of Wessex ECOEnergy and the directors are comfortable that no
impairment is required.

4.2.4 Investment in associate

During the prior year, the group recognised an investment in associate in respect of Zapmap, measured
under the equity method. An independent external valuation was carried out to determine a fair value for the
purposes of calculating the initial value of the investment in the associate.

110

Good Energy Annual Report 2023Notes to the Financial Statements

4. Critical Accounting Judgements and Estimates (continued)

4.2 Estimates (continued)

4.2.4 Investment in associate (continued)

On 8th August 2022, the group holding in Zapmap was restructured. Zapmap undertook a Series A funding
round in which the Group participated. Following a competitive process, the Series A funding round was
successfully completed with the Group and Fleetcor UK Acquisition Limited (“Fleetcor”) investing in the round.
Following the transaction, Good Energy has a significant minority 49.9% shareholding and Fleetcor have a
shareholding of 19.9%. Fleetcor purchased its 19.9% stake for an investment of £5.3m.

The valuation of the revised holding in Zapmap has been conducted using the Merton model valuing the
company’s holding at £13.2m as at 31 December 2022. The valuation of Zapmap can be considered
subjective due to various factors. Firstly, the fact that Zapmap’s shares are unlisted; secondly, the mix of
Ordinary and Preference share holdings; thirdly, the volatility assumption made within the valuation modelling;
and finally, the application of value to a significant minority shareholding. The valuation was based on current
prices in an active market for similar companies within the industry and is therefore categorised as Level 2 in
the fair value hierarchy.

In the current year, a further independent external valuation exercise was undertaken under the Merton
model to support the carrying value of Good Energy’s investment in Zapmap at 31 December 2023 included
within note 17. The external advisors took into account the performance of the business during the year and
assumptions related to December 2023 to reach a minimum enterprise value for Zapmap. Management
consider the valuation approach taken and the assumptions used reasonable and are comfortable that no
impairment is required.

Other estimates:

4.2.5 Power purchase costs

Power purchase costs can typically take 14 months from the date of supply to be finalised due to the
processes that the energy market has to complete in order to finalise generation and consumption data for
any one particular month. Therefore, there is an element of power purchase costs that needs to be estimated
based on a combination of in-house and industry data that is available at any particular point in time. Industry
information from the Data Transfer Network catalogue is used in the estimation process. Specifically, D36 data
flows are used to determine unbilled volume from industry data. Internal contract prices are then applied to
the industry data to arrive at an estimate for power purchase costs. The estimation uncertainty relates to a
carrying amount of £6.0m held on the balance sheet at the year end included within note 25.

Sensitivity anlaysis is not considered appropriate for power purchase costs. If power is not received via
renewable generators, it is purchased through trades. Therefore, there is a natural control in place to mitigate
unexpected shocks.

4.2.6 Inventories

The Group carries Renewable Obligation Certificates (ROCs) as inventory in its Consolidated Statement of
Financial Position. These are valued at the lower of cost or estimated realisable value. Gains or losses made on
ROCs which are subsequently sold are only recognised in the Statement of Comprehensive Income when they
crystallise.

The final out-turn value of a ROC is published by Ofgem in October following the compliance year (April to
March) which may require a final adjustment to gains or losses on the sale or purchase of ROCs previously
recognised in the Consolidated Statement of Comprehensive Income. The estimation uncertainty relates to a
carrying amount of £10.9m held on the balance sheet at year end included within note 18.

Sensitivity analysis is not conducted for ROCs due to the low level of risk involved. If no certificates are
received, no payment is made. A change in the final out-turn value of a ROC is not expected to have
a material impact on the financial statements. Volumes are monitored closely during the year for any
movements that could materially impact the Renewable Obligation provision.

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111

Financial statements

Notes to the Financial Statements

5. Segmental Analysis

The chief operating decision-maker has been identified as the Board of Directors (the ‘Board’). The Board
reviews the Group’s internal reporting in order to assess performance and allocate resources. Management
has determined the operating segments based on these reports. The Board considers the business from
a business class perspective, with each of the main trading subsidiaries accounting for each of the
business classes.

The main segments are:-

•

Electricity Supply

FiT Administration

• Gas Supply

•

Energy as a service (including Good Energy Works, Wessex ECOEnergy and Zapmap)

Holding companies, being the activity of Good Energy Group PLC.

No operating segments have been aggregated to form the above reportable operating segments.

The Board assesses the performance of the operating segments based primarily on summary financial
information, extracts of which are reproduced below. An analysis of profit and loss, assets and liabilities and
additions to non-current asset, by class of business, with a reconciliation of segmental analysis to reported
results follows.

Transfer prices in the prior year between operating segments are in a manner similar to transactions
with third parties.

112

Good Energy Annual Report 2023Notes to the Financial Statements

5. Segmental Analysis (continued)

Year ended 31
December 2023

Electricity
Supply

FIT Admin-
istration

Gas
Supply

Total supply
companies

Energy as a
Service

Holding
companies/
consolidation
adjustments

Total

£000’s

Revenue

Revenue from
contracts with
customers

204,815

5,464

41,402

251,681

3,043

(21)

254,703

Total revenue

204,815

5,464

41,402

251,681

3,043

(21)

254,703

Expenditure

Cost of sales

(163,234)

(640)

(43,754)

(207,628)

(2,851)

(210,458)

Gross profit/(loss)

41,581

4,824

(2,352)

44,053

192

Administrative
expenses

Net other
operating income

Depreciation &
amortisation

Operating profit/
(loss)

Net finance
income/(costs)

Share of loss of
associate

Profit/(loss)
before tax

Segments assets & liabilities

Segment assets

Segment liabilities

Net assets/
(liabilities)

Additions to non-
current assets

All turnover arose within the United Kingdom.

(33,049)

(3,424)

(671)

(37)

10,374

(3,186)

(54)

44,245

(36,520)

171

(762)

7,134

754

(16)

(162)

576

(2,027)

11,128

(5,229)

(216)

5,683

38,822

1,516

71,587

111,925

(7,779)

(4,985)

(57,156)

(69,920)

31,043

(3,469)

14,431

42,005

1,281

328

2,656

4,265

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113

Financial statements

Notes to the Financial Statements

5. Segmental Analysis (continued)

Year ended 31
December 2022

Electricity
Supply

FIT
Admin-
istration

Gas
Supply

Total supply
companies

Energy as a
Service

Holding
companies/
consolidation
adjustments

Total

£000’s

Revenue

Revenue from
contracts with
customers

205,942

5,588

36,500

248,030

Total revenue

205,942

5,588

36,500

248,030

652

Expenditure

Cost of sales

(190,391)

(688)

(27,516)

(218,595)

(196)

Gross profit

15,551

4,900

8,984

29,435

456

248,682

(218,768)

29,914

(20,685)

(2,041)

(3,577)

(26,303)

(156)

170

(1,806)

6,788

(1,415)

(3,502)

1,871

(96)

(3)

381

282

7,767

(712)

7,767

(712)

6,692

5,637

(3,121)

9,208

68,248

48,038

116,342

(60,156)

(279)

(16,921)

(77,356)

8,092

(223)

31,117

38,986

133

Administrative
expenses

Net other
operating (costs)/
income

Depreciation &
amortisation

Operating profit/
(loss)

Net finance
(costs)/income

Gain arising on
loss of control of
subsidiary

Share of loss of
associate

Profit/(loss)
before tax

Segments assets & liabilities

Segment assets

Segment liabilities

Net assets/
(liabilities)

Additions to non-
current assets

All turnover arose within the United Kingdom.

114

Good Energy Annual Report 2023

Notes to the Financial Statements

6. Operating Profit and Administrative Expenses

The operating profit is stated after charging:

Depreciation of property, plant and equipment

Depreciation of right of use assets

Amortisation of intangible assets

Auditors’ remuneration

Audit of parent and consolidated financial statements

Audit of subsidiaries

Subtotal (audit)

The administrative expenses comprise the following:

Note

2023

£000’s

2022

£000’s

123

493

192

138

103

241

526

653

113

112

225

Staff and associated costs

19,197

14,565

Office costs

Marketing costs

Professional fees and bank charges

Expected credit loss provision

Depreciation and amortisation

Impairment loss

Loss on disposal of non-current assets

3,766

1,198

8,326

3,444

809

286

3,900

461

3,747

3,636

1,277

298

Total

37,282

28,109

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115

Financial statements

Notes to the Financial Statements

7. Staff Costs

Staff costs, including Directors’ remuneration, were as follows:

Wages and salaries

Social security costs

Share based payments

Other pension costs

Total staff costs

Total expensed staff costs

2023

£000’s

15,971

1,630

341

727

18,669

2022

£000’s

11,436

1,290

198

619

13,543

Details of share based payments can be found in note 28.

No staff members were employed by the parent company during the year. The average monthly number of
employees, including the Directors, during the year was as follows:

Operations

Business services

Total management and administration

2023

Number

144

218

362

2022

Number

113

179

292

116

Good Energy Annual Report 2023

Notes to the Financial Statements

8. Directors' and Key Management Remuneration

Directors’ and Key Management emoluments

Short term employee benefits

Post employment benefits

Share based payments

Total

2023

£000’s

1,228

341

1,633

2022

£000’s

1,049

190

1,324

Key management are considered to be the directors of Good Energy Group PLC and the Executive team. The
emoluments relating to these teams are incuded in the table above.

During the year retirement benefits were accruing to 3 Directors of the Group (2022: 3) in respect of money
purchase pension schemes.

In respect of the highest paid Director, the Group paid remuneration of £463,391 (2022: £320,384), including
contributions to money purchase pension schemes of £28,158 (2022: £26,000).

Individual remuneration for the Directors is set by the Remuneration Committee of the Board which consists
entirely of Non-Executive Directors. Appropriate keyman insurance policies are in place.

Details of the Directors’ remuneration as requried by AIM rule 19 are given in the table in the Directors’
remuneration report on page 61 and are included in this note by cross reference.

9. Finance Income

Bank and other interest receivable

Preference share dividends

Discount on purchase of preference shares

Total finance income

2023

£000’s

434

463

897

2022

£000’s

187

429

633

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117

Financial statements

Notes to the Financial Statements

10. Finance Costs

On corporate bond

Other interest payable

Interest on lease liabilities

Total finance costs

11. Taxation

Analysis of tax charge for the year

Current tax

Adjustments in respect of prior years

Total current tax (see below)

Deferred tax

Origination and reversal of temporary differences

Adjustments in respect of prior years

Total deferred tax (see note 22)

Tax on profit on ordinary activities

2023

£000’s

220

321

2023

£000’s

2,382

377

2,759

(7)

2,807

2022

£000’s

237

351

2022

£000’s

(516)

(117)

1,270

1,153

637

Adjustments in respect of prior year deferred tax amounts are from differences in profit before tax and
qualifying fixed assets arising on finalisation of tax computations.

Income tax expense reported in the statement of
profit and loss - continuing operations

Total tax charge for the year

2023

£000’s

2,807

2022

£000’s

637

118

Good Energy Annual Report 2023

Notes to the Financial Statements

11. Taxation (continued)

Factors affecting the tax charge for the year

The tax assessed for the year is higher (2022: lower) than the standard rate of corporation tax in the UK of
23.5% (2022: 19%). The differences are explained as follows:

Accounting profit before tax from continuing
operations

Profit before tax from discontinued operations

Accounting profit before income tax

Profit before tax multiplied by the standard rate of
corporation tax in the UK of 23.5% (2022: 19%)

Tax effects of:

Expenses not deductible for tax purposes

Non-taxable income

Effects of changes in tax rate

Share-based payment adjustment

Prior year adjustments

Non taxable item on consolidation

Deferred tax on losses not recognised

Total tax charge for the year

Corporation tax payable

2023

£000’s

5,683

1,336

539

389

490

(4)

2,807

2022

£000’s

9,208

9,272

1,762

208

(1,557)

(28)

754

(570)

637

Parent Company

Consolidated

2023

2022

2023

2022

£000’s

UK corporation tax on profits for the year

2,228

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119

Financial statements

Notes to the Financial Statements

12. Earnings per Share

Basic

Basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the
weighted average number of ordinary shares during the year. At the year end, there were no shares held by
Clarke Willmott Trust Corporation Limited (2022: 79,924) in trust for the Good Energy Group Employee Benefit
Trust. The Employee Benefit Trust was wound up during 2023.

Profit attributable to owners of the Company
(£000’s)

Basic weighted average number of ordinary shares
(000’s)

Basic earnings per share

Continuing operations

Profit attributable to owners of the Company
(£000’s)

Basic weighted average number of ordinary shares
(000’s)

Basic earnings per share

Discontinued operations

Profit attributable to owners of the Company
(£000’s)

Basic weighted average number of ordinary shares
(000’s)

Basic earnings per share

Consolidated

2023

2,876

16,793

17.1p

2023

2,876

16,793

17.1p

2023

2022

9,227

16,575

55.7p

2022

8,571

16,575

51.7p

2022

16,575

0.4p

120

Good Energy Annual Report 2023
Notes to the Financial Statements

12. Earnings per Share (continued)

Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares to
assume conversion of all potentially dilutive ordinary shares. Potentially dilutive ordinary shares arise from
awards made under the Group’s share-based incentive plans.

Where the vesting of these awards is contingent on satisfying a service or performance condition, the
number of potentially dilutive ordinary shares is calculated based on the status of the condition at the
end of the period.

Potentially dilutive ordinary shares are dilutive only when the average market price of the Company’s ordinary
shares during the period exceeds their exercise price (options) or issue price (other awards). The greater any
such excess, the greater the dilutive effect.

The average market price of the Company’s ordinary shares during the year was 209p (2022: 242p).

Profit attributable to owners of the
Company (£000’s)

Weighted average number of diluted ordinary
shares (000’s)

Diluted earnings per share

Consolidated

2023

2,876

16,963

17.0p

2022

9,227

16,585

55.6p

The dilutive effect of share-based incentives was 169,580 shares (2022: 10,497 shares). The dilutive effect of
share-based incentives for continuing operations was 169,580 shares (2022: 10,497 shares).

Continuing operations

Consolidated

Profit attributable to owners of the Company
(£000’s)

Weighted average number of diluted ordinary
shares (000’s)

Diluted earnings per share

Discontinued operations

Profit attributable to owners of the Company
(£000’s)

Weighted average number of diluted ordinary
shares (000’s)

Diluted earnings per share

2023

2,876

16,963

17.0p

2023

Consolidated

2022

8,571

16,585

51.7p

2022

16,585

0.4p

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Financial statements

Notes to the Financial Statements

13. Property, Plant and Equipment

Consolidated
Year ended 31 December 2023

Leasehold
improvements

Furniture,
fittings & equipment

Total

£000’s

Cost or valuation

At 1 January 2023

Additions

On acquisition of subsidiary

Disposals

At 31 December 2023

Accumulated depreciation

At 1 January 2023

Charge for the year

Eliminated on disposal

At 31 December 2023

Net book value

At 1 January 2023

At 31 December 2023

447

(415)

(32)

(447)

1,184

168

(18)

1,367

(1,099)

(91)

(1,187)

180

1,631

168

(18)

1,814

(1,514)

(123)

(1,634)

117

180

122

Good Energy Annual Report 2023
Notes to the Financial Statements

13. Property, Plant and Equipment (continued)

Consolidated
Year ended 31 December 2022

Leasehold
improvements

Furniture,
fittings &
equipment

Total

£000’s

Cost or valuation

At 1 January 2022

Additions

Addition on acquistion of subsidary

Elimination on disposal of subsidary

At 31 December 2022

Accumulated depreciation

At 1 January 2022

Charge for the year

Depreciation on acquistion of subsidary

At 31 December 2022

Net book value

At 1 January 2022

At 31 December 2022

447

(359)

(56)

(415)

1,192

(39)

1,184

1,639

(39)

1,631

(1,071)

(1,430)

(42)

(98)

(1,099)

(1,514)

121

209

117

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Financial statements

Notes to the Financial Statements

14. Right of Use Assets and Leases

Office buildings typically have lease terms of between 4 to 6 years. The Group’s obligations under its office
lease are secured by the lessor’s title to the leased assets.

The Group also has certain leases of printers, laptops, and coffee and water machines, with low value
underlying assets. The group has applied the recogntion exemption in respect of these leases.

The office lease generally imposes a restriction from subleasing the underlying assets to another party,
therefore the right-of-use assets can only be used by the Group.

The lease payments within the Group’s lease agreements (with the exception of leases of low value underlying
assets) are linked to annual charges in the Retail Price Index.

The Group classifies its right-of-use assets in a manner consistent with that of its property plant and
equipment. The carrying values of the right-of-use assets, together with the depreciation charge split by class
of underlying asset, are shown below:

Consolidated
Year ended 31 December 2023

Cost

At 1 January 2023

Additions

Additions on acquisition of subsidiary

At 31 December 2023

Accumulated depreciation

At 1 January 2023

Charge for the year

At 31 December 2023

Net book value

At 1 January 2023

At 31 December 2023

Land, land
easements and
buildings

Motor vehicles

Total

£000’s

2,187

1,203

3,390

(1,863)

(447)

(2,310)

324

1,080

138

193

(46)

147

2,187

1,258

138

3,583

(1,863)

(493)

(2,356)

324

1,227

124

Good Energy Annual Report 2023
Notes to the Financial Statements

14. Right of Use Assets and Leases (continued)

Consolidated
Year ended 31
December 2022

Cost

At 1 January 2022

At 31 December 2022

Accumulated depreciation

At 1 January 2022

Charge for the year

At 31 December 2022

Net book value

At 1 January 2022

At 31 December 2022

Land, land easements
and buildings

£000’s

2,187

(1,337)

(526)

(1,863)

850

324

Total

£000’s

2,187

(1,337)

(526)

(1,863)

850

324

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Financial statements

Notes to the Financial Statements

14. Right of Use Assets and Leases (continued)

Set out below are the carrying amouns of lease liabilities (inlcuded within borrowings) and the movements
during the period:

At 1 January

Additions

Additions from acquisition of subsidiary

Accretion of interest

Payments

At 31 December

Current (see note 23)

Non-current (see note 23)

Total

2023

£000’s

290

1,258

267

(646)

1,252

306

946

1,252

The maturity analysis of lease liabilities is disclosed in note 23.

The following are the amounts recognised in the Statement of Comprehensive income:

Depreciation of right-of-use assets (included within cost-of-sales
and administration expenses)

Interest expense on lease liabilities

Expense relating to leases of low-value assets (included within
administration expenses)

Total amount recognised in the Statement of Comprehensive Income

2023

£000’s

493

194

770

During the year, the Group had the following:

- Total cash outflows for leases of £840,000 (2022: £787,000)

- No transactions giving rise to gains or losses arising from sale and leaseback transactions

- No amounts relating to short-term leases.

2022

£000’s

872

(626)

290

284

290

2022

£000’s

526

161

731

126

Good Energy Annual Report 2023
Notes to the Financial Statements

14. Right of Use Assets and Leases (continued)

The Group also has lease contracts concerning office buildings which include extension and termination options.
Management do not expect to exercise any options to extend the lease term and do not expect to exercise any
options to terminate the lease.

At the Statement of Financial Position date, the Group had no lease commitments in respect of leases committed
to but not yet commenced. The Group has not entered into any lease agreements in respect of the construction
of a new premises.

15. Intangible Assets

Consolidated
Year ended 31
December 2023

Power
supply
licence

Software
licences

Website
development
costs

Goodwill

Brand,
customer
relationships
& order
backlog
acquired*

Assets under
the course of
development

Total

£000’s

Cost

At 1 January 2023

180

7,098

213

2,866

286

10,643

Acquired in a business
combination

Additions

1,767

889

At 31 December 2023

180

7,107

216

4,633

Accumulated
amortisation and
impairment losses

At 1 January 2023

Charge for
the year

Impairment

At 31 December 2023

Net book value

At 1 January 2023

At 31 December 2023

(6,971)

(169)

(114)

(24)

(7,085)

(193)

180

127

2,866

4,633

2,656

286

13,311

(7,140)

(192)

(286)

(7,618)

286

3,503

5,694

889

(54)

835

*The brand, customer relationshis & order backlog were recognised on acquisition of Wessex ECOEnergy
Limited. An external valuation was obtained during the year resulting in the recognition of £0.9m of intangible
assets, of which £0.8m relates to the Wessex brand name and £0.1m relates to Wessex customer relationships
and order backlog acquired by the Group on completion of the transaction.

127

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Notes to the Financial Statements

15. Intangible Assets (continued)

Consolidated
Year ended 31 December
2022

Power
supply
licence

Software
licences

Website
development
costs

Goodwill

Assets under
the course of
development

Total

£000’s

Cost

At 1 January 2022

180

7,500

219

1,984

Additions

Acquired in buisness
combination

Disposal of subsidary

Impairment

(402)

At 31 December 2022

180

7,098

(6)

213

Accumulated
amortisation

At 1 January 2022

Charge for the year

Disposals

At 31 December 2022

Net book value

At 1 January 2022

At 31 December 2022

(6,576)

(148)

(629)

(24)

234

(6,971)

(169)

1,805

(923)

2,866

733

124

(273)

(298)

286

10,616

124

1,805

(1,604)

(298)

10,643

(6,724)

(653)

237

(7,140)

180

924

127

1,984

2,866

733

286

3,892

3,503

Assets under the course of development in the current and prior year relate to costs initially capitalised in respect
of a project that is no longer going ahead. The associated impairment losses are included within administrative
expenses in the Consolidated Statement of Comprehensive Income, and in the electricity supply category
within the segmental analysis in note 5.

128

Good Energy Annual Report 2023
Notes to the Financial Statements

15. Intangible Assets (continued)

The carrying values of indefinite life assets included in intangible assets are: goodwill of £4,633,000 (2022:
£2,866,000). Within the total goodwill value of £4,633,000, £1,061,000 is allocated to Good Energy Limited,
£1,805,000 is allocated to Good Energy Works Limited and £1,767,000 is allocated to Wessex ECOEnergy
Limited, and a power supply license of £180,000 (2022: £180,000) is allocated to Good Energy Limited. Cash
generating units (CGUs) are allocated at legal entity level.

In arriving at the conclusion that these assets have an indefinite life, management have observed that the
power supply licence is awarded until any breach of conditions stipulated by Ofgem. The treatment of
goodwill is aligned with relevant accounting standards. An impairment review is undertaken annually or more
frequently.

The result of this review was that no impairment is required in respect of the carrying values of indefinite list
assets.

Indefinite life assets are held within a cash generating unit of £1,061,000 within Good Energy Limited. An
impairment review has been carried out.

The key assumptions for value in use excluding goodwill in Good Energy Limited are as follows:

- Growth rate beyond five-year plan: 1.0%

- Pre-tax discount rate: 4.75%

The projected cash flows have been adjusted to allow for normalised business (i.e. no new business activity
costs or revenues are included), and are considered a prudent case. It was concluded that the future cash
flows do exceed the value of indefinite life assets, and therefore no impairment is required.

Sensitivity analysis has been conducted on the cost of capital for Good Energy Limited and the Directors noted
that an increase of the pre-tax discount rate to 100% would leave significant headroom before impairment
is required. Also, the terminal growth rate could decrease to -5% with headroom remaining. Directors believe
there to be significant headroom and therefore no impairment is required.

Indefinite life assets are also held within a CGU of £1,805k for goodwill in relation to the subsidiary Good
Energy Works Limited.

The key assumptions used in the impairment review are as follows:

- Growth rate beyond five-year plan: 1.0%

- Pre-tax discount rate: 8%

Sensitivity analysis has been conducted on the cost of capital for Good Energy Works Limited and the
Directors noted that an increase of the post-tax discount rate to 45% would leave significant headroom
before impairment is required. Also, the terminal growth rate could decrease to -5% with headroom
remaining. Directors believe there to be significant headroom and therefore no impairment is required.

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Financial statements

Notes to the Financial Statements

16. Investments and Subsidiaries

Parent Company
Year ended 31 December 2023

Shares in Group
undertakings

Loans to Group
undertakings

Cost and net book value

At 1 January 2023

Acquisition of subsidiary

At 31 December 2023

£000’s

10,260

2,554

12,814

Parent Company
Year ended 31 December 2022

Shares in Group
undertakings

Loans to Group
undertakings

Cost and net book value

At 1 January 2022

Acquisition of subsidiary

Loss of control of subsidiary and
subsequent investment in associate

£000’s

3,275

1,813

5,172

1,250

(1,250)

Total

£000’s

10,260

2,554

12,814

Total

£000’s

4,525

1,813

3,922

At 31 December 2022

10,260

Loans to Group undertakings were repayable by 31 December 2035. Interest rates charged on these loans
range from 0.00% to 8.85%. Repayments include dividends not settled in cash.

130

Good Energy Annual Report 2023

Notes to the Financial Statements

16. Investments and Subsidiaries (continued)

The Group had the following subsidiaries at 31 December 2023 (all of which have the same registered address
as Good Energy Group PLC unless otherwise noted, which can be found within the Directors and Corporate
Resources section on the final page of this report):

Name

Country of
incorporation and
place of business

Proportion of ordinary
shares directly held by
Parent Company

Good Energy Limited

Good Energy Gas Limited

Good Energy
Generation Limited

Good Energy Services
Limited

Good Energy
Works Limited*

Wessex ECOEnergy Limited*

Good Energy Cedar
Windfarm Limited*

Good Energy Tidal Limited

100%

85%

100%

Nature of business

Supply of renewably
sourced electricity and
FIT administration

Supply of gas

An investor in potential
new generation sites

Holding company

Heat pump installation

Solar panel installation

Dormant

*Entities indirectly owned by Good Energy Group PLC

The subsidiaries above have all been included in the consolidated financial statements.

Impairment

The Group performed an impairment test in December 2023. The Group considers the relationship between its
market capitalisation and its book value, as well as forward looking estimates of cash flows, when reviewing for
indicators of impairment. As at 31 December 2023, the market capitalisation of the Group was higher than the
book value of its equity. Management concluded from these reviews that no indicators of impairment existed.

The recoverable amounts of investments in subsidiaries have been determined based on an assessment of
forward looking estimates of cash flows and a probability of default. The projected cash flows have been
adjusted to allow for normalised business (i.e. no new business activity costs or revenue are included), and are
considering a prudent case. The pre-tax discount rate applied to cash flow projections is 4.75%, and cash flows
beyond the five-year period are extrapolated using a 1.0% growth rate. It was concluded that the future cash
flows do exceed the value of investments in subsidiaries, and therefore no impairment is required.

Key assumptions used in impairment calculations and sensitivity to changes in assumptions. The calculation of
value in use is most sensitive to the following assumptions:

- Discount rate

- Growth rates used to extrapolate cash flows beyond the forecast period

Discount rate – the discount rate represents the current market assessment of the risks specific to the Group,
taking into consideration the time value of money. The discount rate is derived from the Group’s weighted
average cost of capital (WACC). The WACC takes into account both debt and equity. A discount rate of 100%
would still leave significant headroom, and would not trigger an indication of impairment.

Growth rate estimates – rates are based on management’s prudent estimates of expected growth.
A decrease in the growth rate estimate to -5% would still leave significant headroom, and would not
trigger an indication of impairment.

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Financial statements

Notes to the Financial Statements

17. Investments in Associates

Interests in associates are accounted for using the equity method of accounting. Information relating to
associates that are material to the consolidated entity are set out below:

Principal place of business/Country
of incorporation

Ownership Interest

Name

Zapmap Limited

United Kingdom

2023

49.9%

2022

49.9%

The primary business of Zapmap Limited is the provision of website, app and services in the electric
vehicle sector.

Summarised financial information:

Current assets

Non-current assets

Total assets

Current liabilities

Non-current liabilities

Total liabilities

Net liabilities

2023

£000’s

1,895

2,132

4,027

(975)

(11,765)

(12,740)

(8,713)

2022

£000’s

6,644

946

7,590

(935)

(10,739)

(11,674)

(4,084)

There are no significant restrictions other than those set out in the Companies Act that prevent Zapmap
Limited from distributing a dividend.

Summarised statement of profit or loss and other comprehensive income:

Revenue

Expenses

Loss before income tax

Loss after income tax

2023

£000’s

1,718

(6,247)

(4,529)

2022

£000’s

503

(1,930)

(1,427)

132

Good Energy Annual Report 2023

Notes to the Financial Statements

17. Investments in associates (continued)

Reconciliation of the entity’s carrying amount:

Opening carrying amount

Fair value of initial investment

Share of loss after income tax

Closing carrying amount

2023

£000’s

12,578

(2,027)

10,551

2022

£000’s

13,290

(712)

12,578

In the prior year, a £7.8m revaluation gain was recognised upon loss of control of Zapmap as a subsidiary
following a Series A funding round in August 2022. Good Energy participated in the funding round and
invested an additional £3.5m into Zapmap.

18. Inventories

Renewable Obligation Certificates

Emission Certificates

Consumables

Total

Parent Company

Consolidated

2023

2022

£000’s

2023

£000’s

10,861

144

2022

£000’s

8,767

425

11,026

9,212

As at 31 December 2023 there were Renewable Obligation Certificates (ROCs) of £7,162,980 (2022:
£5,997,459) included in the above amount that were unissued for generation that had already taken place and
therefore these ROCs were not available for sale before the end of the financial year. The cost of inventories
recognised as an expense, including any impairment value, and included in ‘cost of sales’ amounted to £12.7m
(2022: £16.1m).

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Financial statements

Notes to the Financial Statements

19. Trade and Other Receivables

Gross trade receivables and unbilled receivables

Provision for impairment/non-payment of trade
receivables

Net trade receivables and unbilled receivables

Prepayments and other debtors

Other taxation

Amounts due from group companies

Total

Parent Company

Consolidated

2023

2022

2023

2022

£000’s

743

5,679

6,423

5,224

49,211

69,007

(18,872)

(15,428)

30,339

53,579

3,611

1,908

1,330

2,588

5,224

35,858

57,497

Where a customer account is in credit this is included in contract liabilities (see note 25 Trade and Other
Payables).

The Group has identified that the amount of accrued income subject to estimation uncertainty is
approximately £1.6m.

The Group has a provision in place to set aside an allowance to cover potential impairment and non-
payment of trade receivables. An expected credit loss provision has been calculated on trade receivables in
accordance with IFRS 9 Financial Instruments. Some trade receivables are with customers who do not have
externally available credit ratings.

The movements on the provision for impairment and non-payment of trade receivables is shown below:

Movement on the provision for impairment and
non-payment of trade receivables

Balance at 1 January

Increase in allowance for impairment/non-payment

Balance at 31 December

2023

£000’s

15,428

3,444

18,872

2022

£000’s

11,792

3,636

15,428

134

Good Energy Annual Report 2023

Notes to the Financial Statements

19. Trade and Other Receivables (continued)

Trade receivables
31 December 2023

Expected credit
loss rate

Estimated total gross
carrying amount at default

Expected credit
loss rate

Trade receivables
31 December 2022

Expected credit
loss rate

Estimated total gross
carrying amount at default

Expected credit
loss rate

Current

<30 days

Days past due

30-60
days

61-90
days

>91 days

Total

£000's

7.9%

13.9%

28.6%

43.6%

92.1%

22,153

4,302

1,963

960

16,869

46,247

1,759

597

562

419

15,538

18,872

Current

<30 days

Days past due

30-60
days

61-90
days

>91 days

Total

£000's

6.4%

15.0%

27.1%

39.1%

87.9%

41,471

3,041

1,805

1,492

12,780

60,589

2,662

456

490

584

11,236

15,428

All trade receivables are designated as financial assets measured at amortised cost.

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Financial statements

Notes to the Financial Statements

20. Cash and Cash Equivalents

Cash at bank and in hand

Short-term bank deposits

Security deposits

Total

Parent Company

Consolidated

2023

2022

2023

2022

£000’s

1,373

4,021

25,319

24,063

16,000

424

1,373

4,021

41,346

24,487

No amounts were included within cash at bank and in hand (2022: £592,893 for both the Parent Company
and the Group) in respect of monies held by the Good Energy Employee Benefit Trust. The Employee Benefit
Trust was wound up during 2023.

Included within the cash and cash equivalents balance at 31 December 2023 are £13.9m of customer credit
balances (2022: £4.9m).

The credit quality of cash and cash equivalents can be assessed by reference to external credit ratings as
follows:

AA-

A+

A-

Total

Parent Company

Consolidated

2023

2022

2023

2022

£000’s

593

221

593

1,280

3,334

40,656

23,403

375

397

1,373

4,021

41,346

24,487

Cash and cash equivalents are all financial assets designated as financial assets at amortised cost.

136

Good Energy Annual Report 2023

Notes to the Financial Statements

21. Share Capital and Share Premium

Parent Company & Consolidated

Number of
Authorised
shares

Number of
shares issued
and fully paid

Share
Capital

£000’s

At 1 January 2022

20,000,000

16,783,914

840

Proceeds from shares issued

Scrip dividends issued

28,626

47,559

At 31 December 2022

20,000,000

16,860,099

Scrip dividends issued

34,031

At 31 December 2023

20,000,000

16,894,130

844

845

Share
Premium
Account

£000’s

12,790

125

Total

£000’s

13,630

128

12,915

13,759

12,975

13,820

The ordinary shares are the only class of shares in the Company. Holders of ordinary shares are entitled to vote
at general meetings of the Company and receive dividends as declared. The Articles of Association of the
Company do not contain any restrictions on the transfer of shares or on voting rights.

In 2023, the Company issued 34,031 (2022: 47,559) ordinary shares of 5p each in settlement of scrip dividends
for a total exercise consideration of £61,286.

The Group’s Employee Benefit Trust was closed during the year. As a result, at the year end, Clarke Willmott
Trust Corporation Limited held no ordinary shares (2022: 79,924) of the Company for the present and future
beneficiaries of the Good Energy Group Employee Share Option Scheme.

The Board recommend a final dividend for 2023 of 2.25p (2022: 2.00p) per ordinary share, taking the full year
dividend to 3.25p (2022: 2.75p).

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Financial statements

Notes to the Financial Statements

22. Deferred Taxation

The provision for deferred taxation is made up as follows:

Consolidated

At 1 January

Charged to the Consolidated Statement
of Comprehensive Income

Deferred tax impact of amortisation movement on
intangible assets acquired

Elimination on disposal

Acquisition of subsidiary

Charged to equity

At 31 December

Deferred tax assets

On short term timing differences

Losses

Share based payments

On accelerated capital allowances

Total

Deferred tax liabilities

Arising on recognition of intangible assets acquired

Total

2023

£000’s

(162)

209

(239)

(131)

2023

£000’s

270

340

2023

£000’s

(209)

2022

£000’s

4,583

1,153

(5,898)

(162)

2022

£000’s

162

2022

£000’s

138

Good Energy Annual Report 2023Notes to the Financial Statements

22. Deferred Taxation (continued)

Accelerated
capital
allowances

Revaluation
of
Generation
sites

Acquisition
of subsidiary
fair values

Short-term
timing
differences

Losses

Share
based
payment

Total

£000’s

Deferred tax
assets/(liabilities)

At 1 January 2022

(2,780)

(4,110)

(35)

130

2,212

2,822

(1,788)

(76)

(2,146)

Credited/
(charged) to the
income statement

Disposal

At 31 December
2022

(Charged)/
credited to the
statement of
comprehensive
income

Acquisition of
subsidiary

Charged to equity

At 31 December
2023

(26)

5,898

(4,583)

(1,153)

5,898

162

(38)

(28)

(61)

(209)

239

(209)

270

131

Deferred tax on losses incurred pre 1 April 2017 has only been recognised to the extent that the relevant
companies which incurred the losses have sufficient deferred tax liabilities available for offset. Should deferred
tax be recognised on all such losses, the deferred tax asset and profit after tax would increase by £731,574
relating to losses of £2,926,295.

139

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Notes to the Financial Statements

23. Borrowings and Other Financial Liabilities

Current:

Bank loans

Corporate bond

Lease liabilities

Total

Non current:

Bank loans

Corporate bond

Lease liabilities

Total

Parent Company

Consolidated

2023

2022

2023

2022

£000’s

215

306

531

284

294

Parent Company

Consolidated

2023

2022

2023

2022

£000’s

4,726

4,922

4,726

4,921

946

4,726

4,922

5,687

4,927

The current portion of the bond repayment represents the interest accrued and the amount of principal
repayments requested prior to the year end. The latest redemption request deadline was in December 2023,
for repayment of the remaining bond in June 2024.

The bank loan is in relation to a Government-backed Bounce Back loan held by Wessex ECOEnergy Limited.

140

Good Energy Annual Report 2023Notes to the Financial Statements

23. Borrowings and Other Financial Liabilities (continued)

Parent Company

31 December 2023

Due less than 1 year

Due between 1 and 5 years

Total

Parent Company

31 December 2022

Due less than 1 year

Due between 1 and 5 years

Total

The maturity profile of the bond is included in note 3.1.1.

Bond

£000’s

215

4,726

4,941

Bond

£000’s

4,922

4,932

Total

£000’s

215

4,726

4,941

Total

£000’s

4,922

4,932

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Financial statements

Notes to the Financial Statements

23. Borrowings and Other Financial Liabilities (continued)

Consolidated

Bank loans

Bond

Lease
liabilities

Total

£000’s

31 December 2023

Due less than 1 year

Due between 1 and 5 years

Total

Consolidated

31 December 2022

Due less than 1 year

Due between 1 and 5 years

Total

531

5,687

6,218

215

4,726

4,941

Bond

Lease
liabilities

306

946

1,252

Total

£000’s

4,921

4,931

284

290

294

4,927

5,221

The fair values of borrowings have been calculated taking into account the interest rate risk inherent in the
bond. The fair value estimates and carrying values of borrowings (excluding issue costs) in place at 31
December 2023 are:

2023

Fair
value

2023

Carrying
value

2022

Fair
value

2022

Carrying
value

£000’s

Corporate bond

4,833

4,449

4,820

4,486

Borrowings are designated as other financial liabilities held at amortised cost. The carrying amount is a
reasonable approximation of fair value for all remaining financial assets and liabilities held by the Group.

The corporate bond is categorised as Level 1 in the fair value hierarchy as this is based on quoted prices in an
active market.

142

Good Energy Annual Report 2023Notes to the Financial Statements

24. Changes in Liabilities Arising from Financing Activities

1 January
2023

Cash flows

Interest

New
Leases

New Loans

31
December
2023

£000's

£000’s

£000's

Current
interest-bearing
loans and
borrowings
(excluding
items listed
below)

Non-current
interest-bearing
loans and
borrowings
(excluding
items listed
below)

Current lease
obligations

Non-current
lease obligations

Total liabilities
from financing
activities

134

4,921

(180)

284

(745)

684

841

225

4,741

306

946

5,221

(692)

134

1,525

6,218

The Group classifies interest paid as cash flows from operating activities.

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Financial statements

Notes to the Financial Statements

25. Trade and Other Payables

Parent Company

Consolidated

2023

£000's

706

603

1,331

2022

£000's

405

2023

£000's

2,090

41,497

498

2,228

17,389

63,702

2022

£000's

11,465

50,868

377

9,425

72,135

Trade payables

Accruals

Social security and other taxes

Corporation Tax

Amounts due to group companies

Contract liabilities

Total

Trade payables, accruals and other payables are designated as other financial liabilities held at amortised
cost. The accruals include liabilities such as the ROC accruals for the current compliance period, unbilled
transmission network charges and the Group’s FIT pot contribution.

All of the contract liabilities in 2022 as shown above were recognised as revenue in 2023.

26. Dividends Paid

Amounts recognised as distributions to shareholders in the year (based on the number of shares in issue
at the record date) are as follows:

Consolidated

Final dividend for prior year of 2p per share
(2022: 1.8p)

Interim dividend for current year of 1p per share
(2022: 0.75p)

Total

2023

£000’s

336

169

505

2022

£000’s

187

238

425

A final dividend of 2.25p per share was proposed on 19 March 2024, subject to shareholder approval at the
Company’s AGM.

Of the total dividend distributed for the year, £60,286 (2022: £127,274) was paid in the form of scrip dividends
with a balance of £444,913 (2022: £297,458) settled in cash.

144

Good Energy Annual Report 2023
Notes to the Financial Statements

27. Cash Generated from Operations

Reconciliation of net income to net cash provided by operating activities:

Parent Company

Consolidated

2023

2022

2023

2022

£000’s

(Loss)/profit before tax from continuing operations

263

(3,524)

5,683

9,208

Profit/(loss) before tax from discontinuing
operations

(Loss)/profit before income tax

263

(3,524)

5,683

9,272

Adjustments for:

Depreciation of PPE and ROU assets

Amortisation & impairment of intangibles

Transfers from/(to) restricted deposit accounts

Gain arising on loss of control of subsidiary

Gain/(loss) on sale of assets held for sale

Share based payments

Gain on closure of Employee Benefit Trust

Loss on asset disposals

Share of loss of associate

341

(43)

Dividend income from subsidiaries

(2,000)

198

616

478

624

951

2,550

(1,515)

341

(43)

2,027

(7,767)

(64)

198

712

Other finance income - net

(422)

(381)

(576)

(281)

Changes in working capital
(excluding the effects of acquisition and
exchange differences on consolidation)

Inventories

Trade and other receivables

Trade and other payables

2,467

(111)

(1,882)

(1,509)

(4,551)

22,347

(21,253)

(568)

(10,923)

25,812

Cash inflow/(outflow) from operations

495

(8,776)

20,634

5,180

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Financial statements

Notes to the Financial Statements

28. Share-Based Payments

In order to retain the services of key employees and to incentivise their performance, the Parent Company
operates the Good Energy Employee Share Option Scheme under which certain employees of the Group
are granted options to acquire Ordinary 5p shares at future dates. During the year costs of £341,000 (2022:
£197,963) in respect of these options have been recognised in the Consolidated Statement of Comprehensive
Income. As at 31 December 2023,the following options had been issued:

Number of options

Weighted average
exercise price

Total exercise
consideration

2023

2022

2023

2022

2023

2022

(Number)

(£)

£000’s

Outstanding at beginning
of year

878,307

708,528

2.23

Granted

Exercised

840,288

435,701

(60,000)

(199,582)

Cancelled/surrendered

(72,478)

(66,340)

1.49

1.25

2.37

Outstanding at the end
of year

1,586,117

878,307

1.87

1.82

2.27

1.03

1.78

2.23

1,956

1,291

1,252

(75)

(172)

989

(206)

(118)

2,961

1,956

Of the options outstanding, no shares (2022: 79,924) have already been issued and held by Clarke Willmott
Trust Corporation Limited as the Trustee of the Good Energy Group Employee Benefit Trust. Dividends were
waived on these shares in the prior year. The Employee Benefit Trust was wound up during 2023.

The fairvalue of the share options granted during the year were measured using the black scholes model with
the following inputs:

- Weighted average fair value at the measurement date: £2.09

- Exercise price: £1.49

- Expected life of share options: 3 years

- Annual risk-free interest rate: 5.348%

- Expected volatity: 61.99%

The expected life of the share options is based on historical data and current expectations and is not
necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that
the historical volatility over a period similar to the life of the options is indicative of future trends, which may not
necessarily be the actual outcome.

146

Good Energy Annual Report 2023
Notes to the Financial Statements

28. Share-Based Payments (continued)

Grant-vest

Expiry year

Exercise price in £ per
share options

Share options (thousands)

2013-2016

2015-2018

2021-2022

2021-2024

2022-2025

2023-2026

2023

2028

2023

2025

2026

2027

1.25

2.25

1.78

2.51

2.27

1.49

2023

2022

226

395

840

1,586

258

436

879

There were 840,288 share options granted in the current year. The right to exercise share options expires in
line with contractual agreements between the group and the holder made at the grant date, or varied by
agreement with both the Group and the holder.

See Note 8 for the total expense recognised in the Income Statement for share options granted to Directors
and employees.

29. Business Combinations

On 22 June 2023 the Group acquired 100% of the voting equity instruments of Wessex ECOEnergy Limited,
a company whose principal activity is the provision of solar panel installations. The acquisition will enable the
Group to build on its strategy to accelerate its capability in decentralised energy services.

Recognised amount of identifiable assets and liabilities acquired:

Property, plant and equipment

Intangible assets

Inventories

Receivables

Cash

Payables

Borrowings

Deferred tax liability

Total Identifiable net assets

Goodwill

Consideration

Book Value

Fair Value

£000s

171

362

246

350

(297)

(711)

119

171

889

362

246

350

(297)

(711)

(223)

787

1,767

2,554

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Financial statements

Notes to the Financial Statements

29. Business Combinations (continued)

The fair value of trade receivables at the acquisition date is £103,911. The gross contractual amount for
trade receivables due is £103,911. All amounts are expected to be collected.

Fair value of consideration paid:

Cash

Total consideration

Goodwill

£000s

2,554

1,767

The main factor leading to the recognition of goodwill is the presence of certain intangible assets,
such as the assembled workforce of the acquired entity, which do not qualify for separate recognition.
The goodwill recognised will not be deductible for tax purposes. Acquisition costs of £634,000 arose
as a result of the transaction. These have been recognised as part of administrative expenses in the
statement of comprehensive income. No issue costs have been recognised in respect of the transaction.

The results of Wessex EcoEnergy Limited since its acquisition are as follows:

Turnover

Loss

2,073,572

38,106

Since the acquisition date, Wessex ECOEnergy Limited has contributed £2,073,572 to Group revenues and a
loss of £38,106 to the group’s results. If the acquisition had occurred on 1 January 2023 Good Energy Group’s
revenue would have been £256,432,000 and Group profit for the year would have been £2,676,000.

Post year end, on 12 February 2024, the Group acquired 100% of the issued share capital of JPS Group, a
specialist solar and storage installation and distribution business. The acquisition strengthens Good Energy’s
service offering and accelerates the Company’s energy services growth strategy in targeting higher margin,
growth markets with lower working capital requirements.

The acquisition took place on a debt-free cash-free basis for an initial consideration of £7m with further
deferred consideration of up to £6.75m, payable in cash over a two-year period, subject to certain
performance conditions. The initial consideration was satisfied by a cash payment on completion and through
the allotment of 1,322,000 new ordinary shares of 5p each in the Company. A proportion of the consideration
shares have been placed on behalf of JPS Group’s selling shareholders via a vendor placing of 842,000
consideration shares at a price of 250p per placing share, raising proceeds of approximately £2.1m for the
vendors.

Due to the short period of time between acquisition and reporting, the accounting for the acquisition
of JPS Group has only been provisionally determined at the date the financial statements for the year
ended 31 December 2023 are authorised for issue. In accordance with the requirements of IFRS 3 Business
Combinations, the Group will finalise the acquisition balance sheet within 12 months of the acquisition date.

JPS Group made no contribution to Group revenues or profits in 2023. It is impractical to disclose Group
revenues and profits if the acquisition had occurred on 1 January 2023 due to differing financial year ends and
limited access to finalised accounting information at the date of signing the financial statements.

148

Good Energy Annual Report 2023Notes to the Financial Statements

30. Pensions

The Group operates a defined contribution pension scheme. The assets of the scheme are held separately
from those of the Group in an independently administered fund. The pension cost represents contributions
payable by the Group to the fund and amounted to £706,000 (2021: £596,000).

Total contributions of £126,000 (2022: £182,000) were payable to the fund at the end of the financial year and
are included in other payables.

The Group has no further pension liability either realised or contingent and in line with the Group’s
environmental position all employer contributions are invested within a suitable fund.

31. Related Party Transactions

During the year the Group recognised £463k (2022: £187k) in respect of preference dividends due from
irredeemable preference shares held in Zapmap Limited. The amount was unpaid at the year end and is
included within trade and other receivables.

32. Subsequent Events

A final dividend of 2.25p per share (2022: 2.0p) was proposed on 19 March 2024, subject to shareholder
approval at the Group’s AGM.

On 12 February 2024, Good Energy Group PLC acquired the entire issued share capital of JPS
Renewable Energy Ltd, a specialist solar and storage installation and distribution business, and its wholly
owned subsidiary, Trust Solar Wholesale Ltd, a standalone distribution and procurement business, for an
initial consideration of £7m.

The initial consideration was satisfied by a cash payment on completion and through the allotment of
1,322,000 new ordinary shares in Good Energy Group PLC. A proportion of the consideration shares
have been placed on behalf of JPS Group’s selling shareholders via a vendor placing of 842,000
consideration shares at a price of 250 pence per placing share raising proceeds of approximately £2.1m
for the vendors.

33. Subsidiary Undertakings Exempt from Audit

Good Energy Group PLC has provided the necessary parental guarantees under Section 479A of the
Companies Act 2006, to enable the following companies exemption from audit:

Directly held subsidiaries:

Good Energy Tidal Limited

Good Energy Services Limited

Indirectly held subsidiaries:

Good Energy Cedar Windfarm Limited

Good Energy Works Limited

Wessex ECOEnergy Limited

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149

Financial statements

Directors and Corporate Resources

Directors

William Whitehorn (Non-Executive
Chairman)
Nigel Pocklington (Chief Executive)
Rupert Sanderson (Chief Financial Officer)
Francoise Woodward (Chief Operating
Officer)
Timothy Jones (Non-Executive Director)
Emma Tinker (Non-Executive Director)
Nemone Wynn-Evans (Non-Executive
Director)

Company Secretary

Computershare Company Secretarial
Services Limited
Bridgewater Road, Bristol, BS13 8AE

Company Number

04000623

Principal Place of Business and Registered
Office

Financial Advisors
Investec Bank plc
30 Gresham Street
London
EC2V 7QP

Bankers

Lloyds Bank
PO Box 112, Canons House,
Canons Way
Bristol
BS99 7LB

The Co-operative Bank PLC
PO Box 101, 1 Balloon Street
Manchester
M60 4EP

Legal Advisors

Norton Rose LLP
3 More London, Riverside
London
SE1 2AQ

Monkton Park Offices
Monkton Park
Chippenham
Wiltshire
SN15 1GH

Independent Auditors

Mazars LLP
90 Victoria St
Bristol, BS1 6DP

Registrars

Computershare Investor Services PLC
The Pavilions, Bridgwater Road
Bristol
BS99 6ZY

150

Good Energy Annual Report 2023

Acronyms and definitions

API: Application Programme Interface solution.

Board: The Board of the Company.

Company: Good Energy Group PLC.

CPO: Charge point operators build EV charging sites and manage charging network infrastructure.

Default/deemed tariffs: Good Energy’s default and deemed tariffs are supply tariffs which are subject to
the energy price cap. A customer automatically switches to the default tariff if they are on a fixed tariff
which comes to an end and they take no other action (such as switching to our SVT or another fixed tariff).
Customers on deemed tariffs are other instances where there has not been an active choice to switch, such
as where a customer has moved into a property supplied by Good Energy.

DEFRA: The Government Department for Environmental, Food and Rural Affairs department that develops and
implements policy on the environment, food and rural issues. They are responsible for supporting the growth of
a sustainable green economy.

EV: Electric vehicle.

Export payments: The precursor to smart export payments. Under the FIT scheme, generators are usually paid
a ‘deemed’ export of 50%, based on the assumption that they export 50% of what they generate to the grid.
Smart export tariffs pay them for the actual amount of export.

FIT: Feed in Tariff – government scheme live from 2010-2019 that pays small renewable generators.

GHG Protocol, ISO 14064-3: Is an international standard for quantifying and reporting GHG emissions.

Good Energy, Group, We and Our: The Company and the Good Energy group of companies.

ISO 14001: Is an internationally agreed standard that sets out the requirements for an environmental
management system. It helps organisations improve their environmental performance through more efficient
use of resources and reduction of waste.

LCP Delta: Provide data-driven research and consultancy to companies navigating the energy transition.

MCS: Microgeneration Certification Scheme, an independent scheme that defines, improves and certifies
quality standards for low-carbon and renewable energy technologies and installers.

POI: Point of interest data provides real-time intelligence and insights to Zapmap’s EV mapping app.

PPA: Power purchase agreements in which Good Energy contracts with renewable generators to
buy electricity.

RECC: The Renewable Energy Consumer Code sets high consumer protection standards for businesses selling
renewable energy generation systems for domestic properties.

SME: Small and medium sized enterprises.

SVT: Standard variable tariff.

TCFD: Taskforce for Climate-related Financial Disclosures, with recommendations structured around four
pillars: Governance, Strategy, Risk Management, and Metrics and Targets.

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151

Financial statements

Annual Report & Accounts 2023

Good Energy Group PLC
Monkton Park Offices
Monkton Park
Chippenham
SN15 1GH

goodenergy.co.uk/investors