Utilitywise is in administration having failed to find a buyer or raised enough money to stay in business.
The company will immediately close its enterprise division, by far the largest part of its business, which acted as a third party intermediary (TPI) for the SME and micro business sectors.
Andrew Johnson and Chad Griffin of FTI Consulting are the administrators. Johnson said “a substantial number of redundancies” would follow at the company’s Newcastle HQ.
However, he said the company’s corporate division, recently rebranded to EIC, remains afloat.
The future of Utilitywise, led by former Sage boss Brendan Flattery, has been the subject of speculation since the company delayed annual results and eventually restated its income last year.
The firm had been overestimating how much energy clients were likely to use when signing off contracts, effectively leading it to both overpay commission and overstate revenue. It also had to repay millions in commissions to a supplier.
As a result, it posted an operating loss of £31.4m for the 2017 financial year and warned of challenges ahead.
Three months ago, likely with an eye on a sale or separating out business units, the firm rebranded its corporate division back to EIC. The move also raised eyebrows as Utilitywise acquired a company called Energy Information Centre, or EIC, in 2013 for £15.5m.
Two weeks ago the company admitted it was seeking buyers and needed £10m to stay afloat and renew a £25m credit facility which expires in April.
The administrators said no offers had been received for the enterprise division, nor the group as a whole, and that the directors had been unable to raise sufficient funding to cover “significant” trading losses.
In a statement released Wednesday evening (13/02/19), Johnson said:
“Given the absence of a potential purchaser for the Enterprise division and the continuing significant losses within that part of the business, we are unable to continue to trade, and will cease the operations of the Enterprise division immediately. This will unfortunately result in a substantial number of redundancies, primarily at UTW’s head office in Newcastle.
“We have received expressions of interest from a number of parties for UTW’s subsidiary companies Icon Communication Centres s.r.o and Energy Intelligence Centre Limited, which operate the Europe division and Corporate division respectively. These companies are not in an insolvency process and continue to operate on a “business as usual” basis, with the full support of the Group’s lender, whilst the sales process continues. We intend to conclude the sales processes in respect of these subsidiaries in the coming weeks.”
Further details here.
Related stories:
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Utilitywise share trading suspended
Utilitywise warns of ‘material impact’ of overstating client energy consumption
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Yü Group revisits accounts, posts loss
Utilitywise rebrands corporate division as EIC
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