PrepayPower profits up 27% as it warns about impact of surging energy costs

Pay-as-you-go energy provider sees net profit rise to €14.2m last year

PrePayPower, the pay-as-you-go energy provider, has reported a net profit of €14.2 million for last year, up 27 per cent on 2019, while warning that it expects earnings this year to be hit by surging energy costs.

Publishing its annual results for 2020, which show it generated a turnover of €198 million last year, the company said profit for the current year was likely to be reduced given the “difficult” market conditions.

The company purchases its electricity and gas on wholesale markets where prices have surged on foot of rising demand and shortages.

However, founder and chief executive Cathal Fay said the group's hedging operations had helped it manage the rising markets more effectively than competitors.

As a result, it was committing to a price freeze for remainder of the winter, he said.

“We believe some of our competitors will be forced to raise prices again soon but we are committing to a price freeze for the winter which we are able to do as a result of our various hedging operations,” Mr Fay said.

Dublin-based PrePayPower, which employs 251 staff, provides electricity and gas on a pay-as-you-go basis allowing customers to purchase energy via a phone based app, online or in-store.

Greater control

The service is designed for customers who want greater control over the cost of their utility bills.

At the end of 2020, it said it had a total of 217,000 customer accounts; 163,000 electricity accounts and 55,000 gas accounts – up 5 and 12 per cent respectively on the previous year. It had a cash balance of €22.8 million and was debt free.

The company did not pay a dividend to shareholders in 2020 as part of a group reserve management programme.

The business is majority owned by corporate financier Ulric Kenny, with Mr Fay, who co-founded the company in 2009, and tech entrepreneur Andrew Collins also holding stakes.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times