ERM hits the switch on profits
BRISBANE-based electricity retailer and generator ERM Power will continue its push into the small and mediumsized enterprises (SME) market and eye overseas opportunities after reporting double-digit growth in revenue and profit yesterday.
“There’s a lot of good news in there,’’ CEO Jon Stretch said of the 2014-15 results.
Revenue rose 12 per cent to $2.32 billion off an 18 per cent increase in total electricity sales, delivering a 23 per cent lift in underlying net profit after tax of $32.3 million.
The ASX-listed business has grown aggressively over the past five years, supplying large government, industrial and commercial customers and is now number two in that sector with about 18 per cent market share.
“We are growing market share in a declining market,’’ Mr Stretch said. About 18 months ago, ERM began expanding to SME customers.
“We had signalled a target for 2015 of 27,000 customers and breaking even. We’ve exceeded both,’’ Mr Stretch said.
They have 29,238 SME contracts, generating a $5 million profit, and aim to increase that to between 37,500 and 41,000 in Australia over the coming year.
In January, ERM moved into the US market with the purchase of Houston-based Source Power and Gas which operates in Texas, Ohio, Pennsylvania, Maryland, Illinois and other states.
Mr Stretch, who joined ERM in May from telecoms company AAPT, said its US territory was twice the size of the Australian market.
ERM Power will pay investors a partially-franked final dividend of 6 per share. The company’s shares closed 11 , or 5 per cent, lower at $2.09.