Utilitywise plc (AIM:UTW), a leading independent utility cost management consultancy, has told DirectorsTalk about an important and immediate change to its existing payment terms with a second key energy supplier.
The supplier has agreed to amend its terms such that any future extension secured on a contract that has not expired receives the same payment terms as a new customer would, in this case either 75% or 80% (depending on contract type) of the expected revenue from the contract falling due on the extension signing and the remainder at maturity subject to the normal reconciliation process.
Discussions are ongoing with more of our key energy suppliers to amend payment terms to reflect the changing way that we are doing business.
Geoff Thompson, Chief Executive of Utilitywise, commented: “This is a further step forward in getting our commercial terms for both new contracts and contract extensions harmonized. A key focus for our business is improving cash conversion and hence this change of commercial terms is a very positive achievement.
We have more suppliers to target improved terms and will update the market as and when we are in a position to do so.”
The Chairman, Richard Feigen, will make the following statement at today’s AGM:
“We are pleased to announce that the Group has made a solid start to the year, with trading during the period in line with expectations. The pace of recruitment is picking up and we anticipate our position continuing to improve, as per previous market guidance, as the year progresses.
Customer numbers as at 30 November 2015 were 28,507 and our secured future pipeline was £27.7m at the same date.
We announced in October that we had reached an agreement with a key supplier that payment terms for an extension to an existing contract which has not expired would be the same as those for a new customer, with the majority of the revenue from such contract extensions falling due at the time the contract extension is signed. We are pleased to have reached a similar agreement with another of our key suppliers, also announced this morning and similar discussions are ongoing with other suppliers.
Additionally, we expect the recent oil price reduction to feed through to improved tariff opportunities for end consumers, providing further opportunities to serve our customers. We are also making good progress in developing further our multi-channel routes to market and will be in a position to provide further clarity on these in 2016. Overall, we continue to view the future with confidence.”
