Fulcrum shares fall as business hit by UK energy market turbulence

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Shares in Fulcrum Utility Services Ltd dropped on Friday after it indicated it was loss-making in the second half of its financial year.

Shares in the energy and utility services provider were down 19% at 7.36 pence in London on Friday morning. Over the past 12 months, the stock has dropped 79%.

Fulcrum expects to report adjusted revenue for the year ended March 31 of £57.4 million, representing year-on-year growth of 22%.

However, it expects earnings before interest, tax, depreciation and amortisation of £500,000. This indicates it made a loss of £500,000 in the second half, after posting interim Ebitda of £1.0 million.

Since the Sheffield-headquartered company's fundraise in December, it noted that the UK energy market has remained volatile.

The company said that this has hit its smart meter exchange and management contract with energy supplier E. As a result of the insolvency of several of Fulcrum's other energy supplier customers and one of its labour-only subcontractors, it said it was unable to service the contract in a way that maintained its profitability and, as such, Fulcrum mutually agreed with E to terminate the contract.

Amid a turbulent backdrop for the UK energy sector, Fulcrum expects the value of its order book to fall by 14% to £48 million at the end of March from £56.1 million a year ago. At the end of September 2021, its order book stood at £80.9 million.

Looking forward, the company remains mindful of the ongoing volatility of the UK energy market, but it said that its priority is to ‘refocus the group's operations’.

Interim Chief Executive Antony Collins said: ‘The new executive team is actively reviewing the group's activities to ensure optimal performance and to identify opportunities to improve profitability and to deliver long term, sustainable growth for the benefit of all shareholders.’

The company added that the current energy market ‘instability’ also throws up acquisition opportunities.

‘As such, the board continues to identify and review asset acquisition opportunities and is at varying stages of discussion and due diligence with several opportunities,’ it said.

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