Energy services firm Sureserve reports upbeat full-year results on back of contract wins

Energy service provider Sureserve has reported significant growth in annual revenues and profits as its gas business won a large number of major contracts.

The group’s turnover, which mainly works on social housing projects, was up 27 per cent to £275.1m for the year ended 30 September, while profit from continuing operations grew by £4m to £13.1m.

All three gas companies achieved double-digit sales growth, supported by contractual price increase mechanisms that helped offset some of the increased cost pressure during the year.

They also won a significant number of new contracts, the largest of which was an eight-year, £68 million deal with housing association L&Q to provide gas, repair and installation services.

Other contracts awarded included a £30 million five-year deal with property developer Longhurst Group and ten-year deals with Tower Hamlets and Southend-on-Sea councils.

While the value of all contracts won by Sureserve fell by more than 30 per cent on the previous year, the average length of each deal now lasts six years instead of five, and the order book increased by 18 per cent to £593.5 million .

The Kent-headquartered company’s energy efficiency and renewable energy divisions, including Everwarm and its joint venture Warmworks, have also secured numerous deals from public authorities.

As part of its strategy, Sureserve aims to increase its presence as a major supplier of heating maintenance to the UK social housing sector and double its turnover over the next four years, partly through the purchase of gas heating and green energy companies.

To that end, in December 2021 it bought renewable energy specialist CorEnergy for £7.6m, a takeover the company hailed as a ‘real success’ as the subsidiary outperformed management forecasts.

Peter Smith, CEO of the company, said: ‘Last year we stated our ambition to be the largest provider of energy services for social housing in the UK.

“We remain focused on pursuing a strategy of both organic growth and acquisitions to increase our presence in the gas heating and renewable energy sectors, and our acquisition of CorEnergy has proven to be a successful addition to our renewable energy expertise.

“In a fragmented market, our defined strategy supports our ambitions to be a leading provider of social housing energy services delivering projects that matter at the forefront of the UK energy transition.”

Formerly known as Lakehouse, the company will benefit in the coming years from the decarbonisation and efficiency improvements required for the UK’s notoriously drafty housing stock.

It said trading had been strong since early October and nearly 80 percent of expected revenues for this fiscal year were covered by the expanded order book.

“Against the backdrop of a global energy crisis and a global trajectory toward renewables, Sureserve’s strategy to balance both renewables and gas makes sense,” said Neil Shah, research director for the Edison Group.

Sureserve Group shares each closed 3.55 percent higher at 87.5 pence on Tuesday.