Utilita Energy owner warns of profit hit as bills rise

Utilita Energy's parent company, Luxion Group, has issued a warning that its profits are expected to fall due to an "increasing obligation to support customers with higher bills".

The Eastleigh-based supplier's parent reported that despite an increase in pre-tax profit from £31.2m to £43m for the year up to 31 March, 2024, both Utilita and the group experienced a notable decrease in turnover, dropping from £2.13bn to £1.41bn according to accounts recently submitted to Companies House.

A statement from the board remarked: "As prices have fallen, consumers responded with a small increase in consumption, with the overall decline in revenue linked to the significant fall in wholesale prices."

It added: "Following the regulator’s suspension of mode change and warrants for the purpose of debt collection the whole industry has seen a significant increase in bad debt.

"Despite Utilita’s prepay focus we were not immune from Ofgem’s action with bad debt remaining a significant admin cost to the business."

Luxion Group shared that it continues to work with both the regulator and government to address these overarching issues of debt recovery within the energy sector, as reported by City AM.

Referring to its performance since the start of the current financial period, the Utilita Energy owner said, "The continued volatility driven by geopolitical uncertainty in the spot and forward prices of energy increases Utilita’s liquidity risk.

"Price risk continues to be mitigated through the forward purchase of energy in line with the regulator’s price cap methodology."

Utilita Energy, established in 2003 by Bill Bullen who maintains leadership to date. It underwent a rebranding as its parent company adopted the new name Luxion Group in April 2024. Reports later emerged in the same year suggesting Utilita Energy was on the hunt for an additional £50m in funding.