The past two years’ turmoil in world power and gas supply could yet make it ‘the last energy crisis’, Octopus Energy founder Greg Jackson hopes.
Enduring losses and commercial pain could be a price worth paying, on the way to building what Jackson today calls “a cleaner, cheaper, more resilient energy system” .
The maverick behind his privately held seven year old energy supplier, now Britain’s third biggest, commanding with over 5 million accounts following absorption of 1.5 million from Hayden Wood’s under-hedged Bulb, made the remarks as he presented full year results to last April for his privately held firm.
Octopus’ £ 141 million operating loss came about as it decided to absorb £150 million of tariff rises and cost mitigation measures, protecting its customers from the first eye-watering increases on wholesale markets. Jackson said Octopus was the only big supplier to do so.
Revenues more than doubled, to £3.9 billion, up from £1.9 billion, boosted by assertive product innovations, but principally due to higher UK tariffs resulting from Vladimir Putin’s rape of Ukraine.
International expansion helped the sales boom. Octopus debuted in Poland, and bought into existing operations in Spain, France and Italy. It now serves 13 national markets.
“We could have made a profit, but now’s not the time”
Kraken, the group’s sophisticated trading & fulfilment platform, benefitted again from licencing deals at home & overseas. The division’s gross profit rose 10 per cent to £49 million, on sales of £115 million, up by nearly two-thirds.
The surge came as the group’s transactional ‘brain’ welcomed 7.4 million new non-Octopus customers over the year. During peak periods such as when admitting E-On customers, staff were migrating over 1 million every three weeks. By April 2022 Kraken was managing 16 million accounts.
Customer service accolades continued to roll in in the UK. For the fifth year in a row, Which named Octopus as its Recommended Provider.
Structural strengthening saw the £6 billion in assets of Octopus Energy Generation brought directly within the group and further growth at Octopus Electric Vehicles, with its direct leasing model.
Interest from inward investors saw $ 3 billion of new equity issued to Al Gore’s Generation Investment Management and a Canadian public sector pension fund. Established shareholders Tokyo Gas & Australian supplier Origin maintained support.
Among outbound investments made after the year’s books closed, Jackson first injected some of his own capital into Xlinks, the £13 billion Billericay-based venture with an ambition to import solar and wind electricity from Sahara to north Devon. Within months, his company had matched its boss’ stake.
Jackson famously started his company without a personnel or an IT department. He paid tribute this morning to his staff.
“The team at Octopus Energy Group has worked incredibly hard to support customers through the pandemic, and now the energy crisis. They have done so while maintaining first class customer service levels and relentlessly focusing on ways to build towards a cleaner, cheaper, more resilient system, making sure this is the last energy crisis”.
“It has never been more important to build a better, fairer energy system for all”, Jackson went on.
“We could have made a profit, but now’s not the time. Instead we chose to absorb £150m of escalating costs on behalf of customers through prices and support funds, debt-forgiveness and increased service.”