UK-based energy supplier, Octopus Energy Group, has reported a 197% year-on-year (YoY) increase in revenues for FY23, contributing to a 1.6% profit margin.
The company had a successful year, boasting £203 million in net profit and doubling its net assets by 106%, jumping from £473 million to £975 million due to committed investor funds.
The group was already on the rise, having doubled its revenues to £4.2 billion last year (110% year-on-year increase), but the expansion of an international customer base and the continued success of its tech arm Kraken has pushed annual revenues to £13 billion.
1.8 million customers were added globally through Octopus Energy’s retail brand last year, marking its highest annual gain to date.
The group almost tripled its international customer base (+161%), reaching 420,000 customers primarily located across Germany, Japan and France.
A key reason for the firm’s growth in Germany will be Octopus Energy’s launch of its ‘Fan Club’ tariff in the US and Germany, which has successfully been providing cheaper energy rates to UK customers since its domestic launch in 2021.
The company’s tech arm, Kraken, also had a role to play in this expansion due to its licensing on fellow energy networks. With Kraken licensed on E.ON, EDF, Energy Queesnland and Origin Energy, it is now able to serve half of UK households and a third of the Australian market.
Moreover, Kraken migrated millions of Bulb accounts after the group acquired the failing energy supplier in December 2022. The tech arm completed migration by June 2023, making Octopus Energy the UK’s second-largest energy supplier.
By cumulatively accruing accounts across Bulb, E.ON and Origin Energy, Kraken was able to increase its contracted annual recurring revenue from £80m to £127m (+59%).
Co-founding CFO, Stuart Jackson, said: “Our intense focus on prudent risk management and the cost savings delivered by Kraken allowed us to deliver a responsible 1.6% profit margin, whilst devoting significant financial and human resources to helping customers through the crisis.
“With the backing of major investors from the UK, Australia, Japan and Canada we have a strong balance sheet and not only manage a financially robust company but can continue to invest in lower prices, international growth and critical innovation in sectors such as heat pumps, EVs and smart grid technologies.”
Where to next?
This report detailed the upward trajectory Octopus Energy finds itself on, growing from a 110% year-on-year increase in FY22 to 197% in FY23. However, the full financial year for Octopus Energy ended in April 2023, and the firm has since developed its business even further.
For example, Octopus Energy’s generation arm launched a £3 billion offshore wind fund following a £190 million investment from Japanese energy giant Tokyo Gas in November 2023.
The fund will focus on the development, construction and operation of European offshore and floating offshore wind farms, as well as companies looking to build new projects.
One of the first investments for this fund was announced shortly after, with the firm taking a 12.5% stake in the 660MW Walney Extension offshore wind farm.
Operated by Ørsted and located in the northwest of England, the 87 turbine wind farm has been operational since 2018 and will now receive support from Octopus Energy.
Most recently, the firm completed the acquisition of Shell Energy Retail in the UK and Germany from Impello Limited, (Shell) a subsidiary of Shell Petroleum Company Limited.
As of 1 December 2023, 1.3 million domestic energy customers from the UK and Germany fell under Octopus’ care, which will only boost numbers for the company’s FY24 report.
Post time: Feb-01-2024