Ignite Energy Ltd - Limited company accounts 20.1

REGISTERED NUMBER: 07079518 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 December 2019

for

IGNITE ENERGY LTD

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Notes to the Financial Statements

12

DIRECTORS:

B J Higgins

D A Higgins

P A Connor

M Dickinson

E Higgins

REGISTERED OFFICE:

The Orangery

East Lockinge

Wantage

Oxfordshire

OX12 8QJ

REGISTERED NUMBER:

07079518 (England and Wales)

AUDITORS:

Camerons Accountancy Consultants Limited

Statutory Auditor

Chartered Accountants

9 Worton Park

Cassington

Witney

Oxfordshire

OX29 4SX

The Directors are pleased to present our strategic report for the financial year ended 31st December 2019.

REVIEW OF BUSINESS

2019 has been a successful year for the Company, with growth in Turnover (£15.94m vs £12.41m 2018) and Pre-tax profit

(£4.21m vs £3.08m in 2018). This continues a trend of profit growth over the last several years, driven by an increase in customer

numbers and continued conversion of new and existing customer leads in respect of energy efficiency projects.

The Company's business is carried out in two main areas:

Supply Services - more specifically Energy Procurement and Risk Management, Bill Validation and Finance Support and Energy

Data Management. Growth in this area of the business mostly comes from securing new customers, where work is mostly

undertaken on a fixed annual fee basis. Customers have doubled in number from 2018 to 2019. This growth has come from

referrals as well as successful participation in tender exercises. Notable customer wins include our largest customer by energy

volume and a large, fast growing chain of gyms.

Demand Services - more specifically Energy Efficiency Projects and Site Support. 2019 has seen large projects carried out for

newer customers following successful pilot projects. Notable inclusions are an out of town retailer, where a £3.5m revenue, 163 site

LED lighting and BMS rollout was delivered in 12 weeks.

Research and Development

We have also continued to develop and deliver new projects for existing customers, notably new refrigeration efficiency

technologies which we used to deliver projects for a number of existing customers.

Focus on our people

Staff numbers have grown in step with our revenue, from 46 at the start of the year to 63 at the end. Our retention rate has

remained excellent, with 2 leavers during the year.

We have continued to focus on staff welfare, investing in training and team development. We also achieved recognition as a Living

Wage Employer, underlining our longstanding commitment to ensuring all of our team earn a fair living.

The Company achieved recognition of our Quality Management System via ISO:9001 accreditation in 2019, which has assisted us

in further documenting and implementing good practice and management systems appropriate for a business of our size.

Corporate Activity

In 2019 the Company has accepted an investment from Inspired Energy Plc, the UK's largest provider of Energy Procurement

services to business. A significant part of the commercial logic of this transaction is to cross-sell Ignite's wider offering in Energy

Efficiency Projects into Inspired's significantly larger customer base. A copy of the press release associated with the transaction can

be found here:

https://inspiredplc.co.uk/acquisition-of-40-interest-in-ignite-energy-ltd-and-exclusive-call-option-to-acquire-the-balancing-60-in-t

he-company/

The Board has been enhanced by the appointment of Mark Dickinson and Paul Conner from Inspired Energy, adding their strategic

insight and experience to that of the existing Directors.

Future Prospects

The Company starts 2020 with excellent prospects. Several ongoing projects are recorded as Work In Progress at the end of 2019,

securing a profitable start to the 2020 financial year. The budget presented at our December board meeting forecast pre-tax profit

of £4.7m for 2020 based on a weighted sales forecast.

The Company continues to enjoy an excellent and growing reputation in the marketplace, and is actively participating in tender

exercises for several encouraging customers.

The Directors are pleased to present our strategic report for the financial year ended 31st December 2019.

PRINCIPAL RISKS AND UNCERTAINTIES

Since the end of financial year 2019, the Covid-19 virus pandemic has caused widespread disruption to economies around the

world. As well as being a hugely tragic event and personal disaster for many, it has had a significant impact on the operations of

the Company in the short term. With a number of our customers having closed sites, our projects work has been put on pause in

many cases. This has led to a reduction in workload and revenue in this area of the business. We have taken advantage of

government support in the form of the furlough scheme for a group of our workforce affected by this. We have taken all the

responsible steps in regard to planning, and even under our worst case planning scenario the company remains substantially

profitable and profit making for the year ahead.

We have continued to support our customers through this time to meet their operational challenges, such as minimising the energy

usage of closed sites and managing energy contracts in the face of rapidly changing usage projections. We believe we have

strengthened our customer relationships in this time, and our focus is on resuming project work and continuing our excellent track

record of growth once this external factor allows.

The Company is well positioned, but in common with many enterprises is at risk in relation to external economic factors beyond our

control. The majority of our business requires our customers - large corporate organisations, to have sufficient capital and

confidence to invest in reducing their operating costs. As a result, economic shocks that reduce either availability of capital or

confidence could reduce the appetite of our customers for these projects. Whilst mitigation options for these external factors are

limited, we believe we are resilient and well positioned, on the basis that:

- We do not have any debt or bank borrowings outside of normal day to day trade creditors.

- Our customers are diversified across different sectors of the economy.

Other risks include natural disaster or loss of work premises through a catastrophic event. We work to mitigate any risks associated

with these scenarios by having a documented and reviewed disaster recovery plan, and reviewing business risks regularly via our

ISO:9001 Risk Register, which is discussed at our regular review meetings.

ON BEHALF OF THE BOARD:

B J Higgins - Director

1 July 2020

The directors present their report with the financial statements of the company for the year ended 31 December 2019.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of utility management systems.

DIVIDENDS

An interim dividend of £5263.16 per share was paid on 2 August 2019. The directors recommend a final dividend of £1973.68 per share, making a total of £7236.84 per share for the year ended 31 December 2019.

The total distribution of dividends for the year ended 31 December 2019 will be £ 5,500,002 .

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2019 to the date of this report.

B J Higgins

D A Higgins

Other changes in directors holding office are as follows:

P A Connor - appointed 1 August 2019

M Dickinson - appointed 1 August 2019

E Higgins - appointed 1 August 2019

POLITICAL DONATIONS AND EXPENDITURE

No political donations were made during the year

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in

accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have

elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United

Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements

unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the

company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's

transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure

that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the

company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of

which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in

order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that

information.

AUDITORS

The auditors, Camerons Accountancy Consultants Limited, will be proposed for re-appointment at the forthcoming Annual General

Meeting.

ON BEHALF OF THE BOARD:

B J Higgins - Director

1 July 2020

Opinion

We have audited the financial statements of Ignite Energy Ltd (the 'company') for the year ended 31 December 2019 which

comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial

Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their

preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 'Reduced

Disclosure Framework' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2019 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our

responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements

section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our

audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical

responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and

the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in

our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider

whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or

otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we

are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the

other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other

information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have

not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our

opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the

preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the

directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether

due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going

concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the

directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance

is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a

material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in

the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial

statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's

website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act

2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to

state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or

assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report,

or for the opinions we have formed.

Adam Woolford (Senior Statutory Auditor)

for and on behalf of Camerons Accountancy Consultants Limited

Statutory Auditor

Chartered Accountants

9 Worton Park

Cassington

Witney

Oxfordshire

OX29 4SX

1 July 2020

TURNOVER

3

15,939,079

12,406,334

Cost of sales

7,857,899

5,939,742

GROSS PROFIT

8,081,180

6,466,592

Administrative expenses

3,866,427

3,377,320

OPERATING PROFIT

4,214,753

3,089,272

Interest receivable and similar income

4,236

193

4,218,989

3,089,465

Interest payable and similar expenses

5

8,067

8,067

PROFIT BEFORE TAXATION

6

4,210,922

3,081,398

Tax on profit

7

802,391

586,120

PROFIT FOR THE FINANCIAL YEAR

3,408,531

2,495,278

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

3,408,531

2,495,278

FIXED ASSETS

Tangible assets

9

147,678

161,837

CURRENT ASSETS

Stocks

10

595,040

801,070

Debtors

11

3,431,994

4,561,678

Cash at bank and in hand

2,950,005

1,127,078

6,977,039

6,489,826

CREDITORS

Amounts falling due within one year

12

5,109,248

2,429,923

NET CURRENT ASSETS

1,867,791

4,059,903

TOTAL ASSETS LESS CURRENT LIABILITIES

2,015,469

4,221,740

CREDITORS

Amounts falling due after more than one year

13

-

(113,253

)

PROVISIONS FOR LIABILITIES

16

(28,059

)

(29,606

)

NET ASSETS

1,987,410

4,078,881

CAPITAL AND RESERVES

Called up share capital

17

760

760

Retained earnings

18

1,986,650

4,078,121

SHAREHOLDERS' FUNDS

1,987,410

4,078,881

The financial statements were approved by the Board of Directors and authorised for issue on 1 July 2020 and were signed on its behalf by:

B J Higgins - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2018

760

2,582,843

2,583,603

Changes in equity

Dividends

-

(1,000,000

)

(1,000,000

)

Total comprehensive income

-

2,495,278

2,495,278

Balance at 31 December 2018

760

4,078,121

4,078,881

Changes in equity

Dividends

-

(5,500,002

)

(5,500,002

)

Total comprehensive income

-

3,408,531

3,408,531

Balance at 31 December 2019

760

1,986,650

1,987,410

1.	STATUTORY INFORMATION

Ignite Energy Ltd is a private company, limited by shares , registered in England and Wales. The company's registered

number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparation

These financial statements have been prepared in accordance with Financial Reporting Standard 101 "Reduced Disclosure Framework" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The COVID-19 pandemic poses a threat to the company, but the Directors believe that the company is well equipped to

manage its business risk and that the going concern basis is appropriate for the preparation of these financial statements.

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as

permitted by FRS 101 "Reduced Disclosure Framework":

•

the requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based Payment;

•

the requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64(o)(ii), B64(p), B64(q)(ii), B66 and B67 of IFRS 3 Business Combinations;

•

the requirements of paragraph 33(c) of IFRS 5 Non Current Assets Held for Sale and Discontinued Operations;

•

the requirements of IFRS 7 Financial Instruments: Disclosures;

•

the requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement;

•

the requirements of paragraph 52, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 Leases;

the requirements of paragraph 58 of IFRS 16;

•

the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers;

•

the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in respect of:

-

paragraph 79(a)(iv) of IAS 1;

-

paragraph 73(e) of IAS 16 Property, Plant and Equipment;

-

paragraph 118(e) of IAS 38 Intangible Assets;

-

paragraphs 76 and 79(d) of IAS 40 Investment Property; and

-

paragraph 50 of IAS 41 Agriculture;

•

the requirements of paragraphs 10(d), 10)(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D and 111 of IAS 1 Presentation of Financial Statements;

•

the requirements of paragraphs 134 to 136 of IAS 1 Presentation of Financial Statements;

•

the requirements of IAS 7 Statement of Cash Flows;

•

the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;

•

the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures;

•

the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group;

•

the requirements of paragraphs 134(d) to 134(f) and 135(c) to 135(e) of IAS 36 Impairments of Assets.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Fixtures and fittings

-

25% on cost

Motor vehicles

-

25% on reducing balance

Computer equipment

-

33% on cost

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving

items.

Taxation

Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules,

using tax rates enacted or substantially enacted by the balance sheet date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet

date.

Foreign currencies

Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction.

Exchange differences are taken into account in arriving at the operating result.

Employee benefit costs

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme

are charged to the income statement in the period to which they relate.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

Revenue from contracts with customers

Revenue from a contract to provide services is recognised by reference to the stage of completion of the contract. The

stage of completion of the contract is determined by reference to the stage of completion of the installation, determined as

the proportion of the total time expected to install that has elapsed at the balance sheet date.

Contract balances

2019

2018

£

£

Debtors included in "Trade and other debtors"

2,758,353

4,165,989

4.	EMPLOYEES AND DIRECTORS

2019

2018

£

£

Wages and salaries

2,346,870

2,064,214

Social security costs

252,352

216,835

Other pension costs

72,200

55,629

2,671,422

2,336,678

The average number of employees during the year was as follows:

2019

2018

54

46

2019

2018

£

£

Directors' remuneration

247,230

234,210

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

3

2

Information regarding the highest paid director is as follows:

2019

2018

£

£

Emoluments etc

116,227

121,090

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

2019

2018

£

£

Hire purchase

8,067

8,067

6.	PROFIT BEFORE TAXATION

The profit before taxation is stated after charging:

2019

2018

£

£

Cost of inventories recognised as expense

7,857,899

5,939,742

Depreciation - owned assets

54,921

87,701

Auditors' remuneration

12,000

9,500

Foreign exchange differences

25,607

4,604

7.

TAXATION

Analysis of tax expense

2019

2018

£

£

Current tax:

Tax

803,938

591,422

Deferred tax

(1,547

)

(5,302

)

Total tax expense in statement of comprehensive income

802,391

586,120

8.

DIVIDENDS

2019

2018

£

£

Ordinary shares of 1 each

Final

1,500,002

1,000,000

Interim

4,000,000

-

5,500,002

1,000,000

9.	TANGIBLE FIXED ASSETS

Fixtures

and

Motor

Computer

fittings

vehicles

equipment

Totals

£

£

£

£

COST

At 1 January 2019

85,006

223,180

152,883

461,069

Additions

25,440

-

15,322

40,762

At 31 December 2019

110,446

223,180

168,205

501,831

DEPRECIATION

At 1 January 2019

60,837

97,641

140,754

299,232

Charge for year

14,198

31,385

9,338

54,921

At 31 December 2019

75,035

129,026

150,092

354,153

NET BOOK VALUE

At 31 December 2019

35,411

94,154

18,113

147,678

At 31 December 2018

24,169

125,539

12,129

161,837

10.

STOCKS

2019

2018

£

£

Stocks

532,020

542,421

Payments on account

63,020

258,649

595,040

801,070

11.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2019

2018

£

£

Trade debtors

3,346,684

4,496,068

Other debtors

40,059

31,230

Prepayments

45,251

34,380

3,431,994

4,561,678

12.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2019

2018

£

£

Leases (see note 14)

121,320

25,572

Trade creditors

855,268

786,897

Tax

500,360

306,422

Social security and other taxes

138,502

89,946

Pension fund

4,320

1,120

VAT

482,207

547,441

Other creditors

463

6,000

Directors' loan accounts

900,000

-

Accruals and deferred income

1,638,183

532,769

Accrued expenses

468,625

133,756

5,109,248

2,429,923

13.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2019

2018

£

£

Leases (see note 14)

-

113,253

14.

FINANCIAL LIABILITIES - BORROWINGS

2019

2018

£

£

Current:

Leases (see note 15)

121,320

25,572

2019

2018

£

£

Non-current:

Leases (see note 15)

-

113,253

Terms and debt repayment schedule

1 year or

less

£

Leases

121,320

15.

LEASING

Lease liabilities

Minimum lease payments fall due as follows:

2019

2018

£

£

Gross obligations repayable:

Within one year

121,320

25,572

Between one and five years

-

113,253

121,320

138,825

Finance charges repayable:

Net obligations repayable:

Within one year

121,320

25,572

Between one and five years

-

113,253

121,320

138,825

16.	PROVISIONS FOR LIABILITIES

2019

2018

£

£

Deferred tax

28,059

29,606