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Octopus Energy Group has suffered a heavy annual loss after suffering losses of more than £100m due to lower energy demand due to warmer weather.
The company, which operates the UK’s largest gas and electricity supplier with 7.6 million customers, made a pre-tax loss of 260.1 million pounds in the year to April 30, compared with a profit of 77.6 million pounds the previous year.
The company said warmer weather reduced underlying revenue by around £103m as the UK experienced its hottest spring since 1885, with gas use falling 11% in March and 25% in April.
The group also said earnings were hit by a lack of energy crisis subsidies, regulators Natural gas power market Energy suppliers had previously been allowed to recover costs accumulated during the crisis, which is due to end in 2024.
The final one-time cost of its rescue acquisition further depressed bottom-line profits. light bulb When a supplier goes bankrupt in 2021.
But Octopus said it added a further 800,000 UK energy customers to switch, taking its total to U.K. By the end of April, the number of customers reached 7.6 million, while overseas customers almost doubled to 2.4 million.
Earlier this year, Octopus overtook British Gas to become the UK’s largest energy supplier, with a market share of 24%.
Figures showed the group’s revenue rose 10% to £13.7bn.
The results come after Octopus Energy announced a deal to sell a minority stake in its Kraken Technologies unit, a move that values the software business at $8.65bn (£6.4bn) and paves the way for a possible stock market flotation.
It sold about $1 billion (£740 million) of its stake in Kraken to a consortium of investors including global investment firm D1 Capital Partners, Fidelity International and a unit of the Ontario Teachers Pension Plan.
Cash from this investment round will be used to fund Octopus and Kraken, but it is understood that the majority of the proceeds will go to Octopus Energy.
Octopus said investors led by Octopus Capital, one of Octopus Energy’s largest investors, will also inject a further $320m (£237m) into Octopus to fund “innovation and growth”.
After the spin-off, Octopus will retain a 13.7% stake in Kraken.
Greg Jackson, founder of Octopus Energy Group, said: “With the growth and profits delivered by our UK energy retail business and Kraken, and the support of high-profile investors, we are able to continue to invest in innovation and scale in other markets, while maintaining a relentless focus on customer service and value.”
The group said it spent 57 million pounds to reduce standard energy tariffs for UK customers, adding that its balance sheet was “strong” with net assets of 1.5 billion pounds.
But Octopus confirmed earlier this year that it was one of three retail energy companies that had yet to meet regulator Ofgem’s financial resilience targets.
The company said it would continue to “work constructively” with Ofgem on a plan to meet capital adequacy rules, although it added that the requirements “set a level that has no precedent in any other deregulated market in which we operate”.
“The group is financially resilient, with the UK retail business exceeding the regulator’s minimum capital requirements and a pathway to achieve the targets has been agreed,” it said.
The group said the Kraken initiative and further cash infusions would nearly double its current net worth.
Octopus announced plans in September to spin off Kraken, an artificial intelligence (AI) platform used by global energy retailers to connect more than 70 million home and business energy accounts.
The spin-off will help accelerate Kraken’s global expansion, with reports suggesting the unit may be listed on the stock market, possibly in London Or New York, next September.
Mr Jackson said: “Kraken is unique in its technology, capabilities and scale.
“As an independent company with world-class backers and outstanding leadership, it will be free to grow even faster and will become a true British-founded success story.”
Kraken was originally built for use by Octopus, but has since acquired a host of other utility customers, including EDF, E.On Next, TalkTalk and National Grid US.