SPARK Energy, the Borders-based gas and electricity supplier, has seen a swing to a maiden profit on the back of increased sales and lower bad debts.
The company, which is being investigated by energy watchdog Ofgem over historic complaints, said a reduction in bad debts and growth in sales had contributed to the improvement from a £3.26 million loss to a £337,469 pre-tax profit in the year to June.
Turnover increased by 126 per cent to £40.7m from £18m.
The company has predicted sales will increase to £80m in the current year and £130m next year.
Although the £4.45m charge recorded for bad debts was higher than last year’s, given the growth in sales it represented a significant fall in percentage of turnover from 19 per cent to 11 per cent.
Spark, which was launched in 2008 and now employs around 200 people, is being investigated by Ofgem and the Information Commissioner’s Office in England over allegations it impersonated customers who had not paid their bills in order to offload them on to other energy suppliers.
The company has said it has ended the practice. It now focuses on the residential letting sector, working with 200 property managers.
In their report to the accounts the directors said the company was currently working with Ofgem to “confirm the status of its compliance with various licence obligations”.
Earlier this week the firm named Chris Gauld, 35, as its new chief executive. Gauld, who was Spark’s first sales director and has been managing director since 2009, takes over the role from Canadian-born entrepreneur and company founder PJ Darling.
Darling will remain a substantial shareholder and adviser to the company. Spark chairman Sir Timothy Noble said: “After setting up the company in 2007 and guiding it to its present position, PJ has decided he wishes to revert to the role of being an entrepreneur in a small business again.
Noble said he believed Spark to be “almost unique in Britain” having raised equity investment of more than £12m over the last five years to finance its progress and also survive financial storms.
In January, Spark Energy revealed that it had secured a landmark deal by entering into a wholesale trading agreement for the first time with leading wholesale energy trader, Morgan Stanley Commodities – resulting in all of its electricity and gas being supplied by Morgan Stanley at competitive prices, enabling the fast-growing energy company to access wholesale markets while continuing to provide its customers with some of the cheapest energy prices in the market.
Meanwhile, a panel of experts at a breakfast briefing organised by GVA James Barr in Scotland yesterday said greater clarity and leadership from the EU and UK government on future energy generation is essential if the commercial property sector is to attract the necessary investment to provide cheaper and more sustainable energy solutions.