Good Energy Group PLC (GOOD) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the Good Energy Group plc Interim Results Investor Presentation. [Operator Instructions] I'd also like to remind you that this presentation is being recorded. Before we begin, we would like to submit the following poll, and if you would give that your kind attention, we would be most grateful. And I'd now like to hand over to Rupert Sanderson, CFO; and Nigel Pocklington, CEO, from Good Energy. Good afternoon.

Good afternoon, Mark. Thank you very much. Just to introduce myself, I'm Nigel Pocklington, and I'm the Chief Executive of Good Energy, and a very good afternoon to everybody who's joined us today. So just to get a start, if we move on to the next slide. I suspect many people on this call are very familiar with the company, but just to -- for those who perhaps aren't, Good Energy has pretty much a 20-year history. Initially, as a generator and a company that raised money behind generation, but more recently, as a supplier of 100% renewable deep green energy, and as an energy services company, we're trying to marry digital technologies with our provision of green energy to help people adopt ways of using energy, which will help the climate crisis. And that is how we see ourselves as a feature facing energy services business. There's one other piece of business I need to attend to before we move on to the agenda, which is, as far as many of you are aware, we have received an unsolicited cash offer by Ecotricity for Good Energy, and that is a process that's ongoing. Because of that, I want to let you know and to save you from asking questions that we can't answer, we're very limited in answering questions around that particular offer. If you would like more information on the Ecotricity offer, and indeed, Good Energy's pose very strong recommendation to our shareholders that you reject the offer by taking no actions, literally doing nothing. Then please visit our website, that's goodenergy.co.uk. And within the investor center on the site, you will find a microsite tittled Offer For Good Energy and all of the materials around the offer, particularly our defense circular, where we lay out the argument as to why we think it is in our shareholders' best interest to reject the bid that can be found there. As a result of that, we're obviously going to present our results to date, but we are slightly -- we are limited by the takeover rule in terms of how much forward-looking information that we can provide there and certainly, in the Q&A at the end. If occasionally, you find us point blank not answering something then that will be the reason why. Right. In terms of an agenda today, what are we going to go through? Well, after a few introductory thoughts from me on the main themes of our first half, I'm going to hand over to Rupert. He will take you through the highlights of the financial performance. Then I will resume the presentation just to walk through what I think some of the operational highlights of the first half of the year and actually to begin to set out more detail about where I see the future strategy of the company going. So just in terms of an overview, for those of you who are following the company, you will be familiar with this. I have been Chief Executive for about 4 months now. So we're obviously not quite ready to share a full and detailed strategic review with our investors. So I'm going to take -- in some parts of -- I'm going to use some parts of today's presentation to give you a sense of what's my views on the business as the relatively new CEO, its progress and our future strategic direction. And I've got 3 headlines really. The first is that the first half of 2021 has been one of strong performance from Good Energy. So financially, you will see, I think, clear evidence that we have weathered the storm of COVID. Of course, we're comparing against the first lockdown period in 2020. And that performance, along with some improvements to our balance sheet that we already announced means that we have today announced the resumption of our dividend. That's something that was poured temporarily as a COVID precaution, and we're now in a position to restart our dividend payments, which Rupert will take you through a bit more detail later. So a strong start in terms of financial performance. But actually also, I think, a half year in a good mild achievements of [indiscernible] things in terms of the development of our strategy, which is really around marrying digital platforms to help consumers and businesses adopt green energy and consume it intelligently. You'll hear a bit about Zap-Map's growth and the new tariffs we've launched for EV drivers, our progress in terms of rolling out smart meters, which are key enablers for some of these new propositions and about our plans for our customers to generate as well as consume power. And we'll also focus understandably, frankly, on the business' core purpose, carbon production and the adoption of clean energy. I came in at the tail end of this particular campaign, but I think the team have had a real success in the first half of the year in terms of raising green washing up the public agenda. And you can see that both consumers players within the energy industry and now government are taking note of the campaign we're doing around the fact that not every tariff, which is marketed as green is actually green. And I think that is a very good evidence of the company really fulfilling its purpose. So those are the headlines. I'm going to hand over to Rupert to take us through the financial performance for the first half 2021.

Thank you, Nigel. Good afternoon, everybody. So I'll start with our profit bridge from half 1 '20 to half 1 2021. So a really strong P&L performance in the first half with an underlying profit before tax of GBP 3.9 million and reported profit before tax of GBP 4.8 million, and obviously, a very different story to the first half of 2020. So I'll just take you through a few of the moving parts within the period. The most substantial is, as Nigel said, is we're comparing against the corresponding period, which had the first lockdown between March and June 2020. And we had 3 impacts really in that period, which we are reversing in 2021. So that was a relatively sharp reduction in demand, particularly on the business side, the need to sell back that excess power to an oversupplied market. And we were -- we put an additional debt provisioning at the end of June, given the uncertainty at that point in time as to the wider impact on households and businesses from the pandemic. So that's by far the largest sort of movement between the 2 periods. If I go along, we've seen a continued increase, particularly in our business demand, and we've seen growth within SME, our small and medium-sized enterprise business customers in the period in particular. And we have had the benefit of a relatively low commodity price environment at the back end of 2020. And given some of our power procurement is undertaken over a longer period of time, we have seen a benefit this year compared to the corresponding period in 2020. Just completing the bridge and then a couple of sort of more one-off items. So in the first half of last year, just after we had revalued our generation assets, there was one small solar site which we had to undertake impounded, [ GBP 600,000 ] on that asset. And keeping with the theme of the generation assets, the refinancing of that portfolio at the start of April of this year led to a revaluing of that loan and that gives us a small interest credit as a one-off item, which we're calling a non-underlying movement within our P&L. If I click on then to the drivers of the sort of income statement performance, we have a small increase in our overall customer relationships in the period and a slightly bigger increase in volumes. Most of that volume increase is in our domestic gas business and most of that relates to weather. It was a colder Q1 compared to the corresponding period in 2020. So just going quickly down the income statement that drives a small increase in our revenue, but I think the main piece to pull out here is our gross profit and our gross profit margin, which has moved up substantially. So we've seen a near 20% increase in gross profit in the period. And the majority of that, but not all, relates to the removal of the COVID impact in 2020, but the business growth and the commodity and hedging benefit, obviously, is a contributor to that as well. Admin costs are relatively flat when you take out the impact year-on-year on the additional provisioning on debt in the first half of 2020. And interest costs in the first half are relatively similar, but we'll start to see that cost now reduce going forward following the repayment of over 70% of the bond at the end of June of this year. Next, I will flick on to cash, and there are a couple of points to pull out here. So the strong P&L performance and the strong EBITDA performance shows the positive movement year-on-year at operating cash flow before working capital level. There are a number of timing differences both within the year and year-on-year within working capital. There was a -- in the first half of 2020, the COVID impact actually had a very favorable impact on working capital of the first half. So it's a slightly uncomparable period. But if we look at what's happened in 2021, there's 2 timing items that I would draw your attention to. The first is the way in which we have procured our renewable obligation certificates. That is a government levy in effect for renewable generation and us, like any other supplier has to cover that cost during the course of the year. We are quite unusual amongst other market participants. It's because we buy all of our power from renewable generators throughout the year. We are paying for those renewable obligation certificates as we go along. And there are just different timings from year-to-year in terms of the volume we have in a particular point. And so we have more renewable obligation certificates in stock at this June compared to the corresponding period, which will unwind in the second half. And the second, Nigel, will pick up on the status of our ENSEK billing system migration and rollout in the second half of the presentation. That's now completed. But during Q2, we were right in the midst of that migration, and there is a modest working capital impact, which again, we see unwinding during the course of Q3. So that's the working capital piece. I think the 2 other points I'll draw out is, obviously, we have paid back over 70% of the bonds in the period. And so that is the main driver of our cash being lower than it was at the prior period. However, we still retain GBP 9 million of cash at the end of June, having made that repayment within the period as well. Net debt and funding. So this is -- we've shown this graph over corresponding periods and there has probably been more going on through 2019 and 2020. But I would just highlight again that our medium-term plan of paying down debt continues. So we have all of our assets now financed within one portfolio. That is a relatively simple amortizing loan structure. So we'll see that gross debt declining steadily over the course of the next 15 years. We've obviously made a substantial repayment of the bond in the first half of this year. There's a little over -- there's a little under, sorry, GBP 5 million worth of debt outstanding on that instrument, and we have signaled our commitment to pay that down fully within 2022. So we can see over time that reduction in net debt. We can see over time the reduction in gearing, and we expect that to continue into the medium term. And then finally, just looking at where we are trading now because, obviously, we have moved on a couple of months since the reported 30th of June period. So underlying performance remains in line with management's expectations. You will have -- a number of people who follow the sort of energy industry and the energy markets will have seen that there has been a substantial amount of volatility and a sustained increase in commodity prices over certainly the -- well, the last 12 months, but it's probably been most sharply seen over the last 3 to 6 months, and that will feed into our expectations of performance for the second half of the year, but it is within our sort of statement above in terms of remaining in line with full year expectations. And as I touched on some of the working capital items, we would expect working capital to improve through the second half of 2021. And then finally, as Nigel highlighted upfront, on the dividend. So as we had previously -- we signaled on our restart the dividend program, we have done that. We are recommending a payment for 2021, and we are restating our intention to make a progressive policy going forward. And the Board has proposed an interim dividend of 0.75p which will become payable conditional upon the hostile offer by Ecotricity Group Limited lapsing or being withdrawn. At that point, I will hand back to Nigel.

Thank you, Rupert. So I've been Chief Executive for 4 months now, and what are my thoughts based on 4 months. I think, first of all -- there are 3 things I wanted to focus on really. First of all, I can certainly confirm as a new incomers of the business, I think we have a well-managed core supply and generation business, but it is backed by modern and very functional billing and customer management systems for both our domestic and our business customers. And we have important and perhaps, underappreciated capabilities and systems in core energy trading and long-term power purchasing. And these capabilities are delivering on a variety of metrics. They underpin the strong first half performance that Rupert has just taken you through. You can see them coming through in terms of our customer service. Our price competitiveness certainly within the deep green 100% renewable segment and the general health of our P&L. I'm also going to focus on 2 themes, which is our strategy developed during my tenure as CEO. I'm going to refer to as Energy as a Service, and I think they're going to remain important areas of focus for us as a business. Relatively, Mobility as a Service where we are looking to support and really drive the fast growth of EV ownership by building both digital platforms that help people own and drive them more easily, but also providing fuel and other propositions which help people charge them in a green way. So I'll be giving you an update on that along with what we would call Generation as a service, which is really using technology to make it easier to consume renewable power more smartly to share it or to generate it yourself, and we've got some important innovations coming through on that front as well. So let me give you a bit more detail on why I feel that the company's core is in good shape. Well, I think we've got all the building blocks in place we need to grow from here, and that is due to a lot of hard work, the team to get this far. So we've talked about Kraken before, which is the consumer billing and customer management system, developed by Octopus Technologies. That is fully embedded in the business. It is absolutely what runs our domestic supply business and has been for a while. And it has -- you can see it at work in a number of areas, really. All of the time-of-use tariffs that we've been able to launch in innovation and proposition is enabled by this more modern system. We've reengaged with the price comparison sector, which obviously having come to the business from money supermarket is a personal interest to me. And again, that's a faster-moving, more nimble environment needs the sort of system that Kraken gives us. And we've seen our customer service levels improve. In fact, our trust product score is better than the industry average and certainly, better than our nearest deep green competitor. And that, again, is because systems enabled us to organize our customer service operations in a way that supports this high-level service. And we're now in a position, I think, to do the same on the business side. So ENSEK is a modern, digital business customer -- business energy customer management system. It is now the basis of all of our energy -- our business to business energy services, and that migration has been completed over the course of the last quarter. There's been some short-term impact from migrating billing systems that always is. If you think about it, particularly, you have to sort of pull those billing in an old system to make sure you're confident it's running in the new one, and they get running again. So there's been -- there's some catch-up to do in terms of billing of our business customers, but we have evidence that, that is writing itself through this quarter and by the end of the third quarter, we'd expect that short-term impact to be completed. And what does that mean for our customers? Well, it means that our business customers for the first time have an online portal, they can give a meter reading with or check their account details. And again, it enables further a quicker innovation in terms of business-to-business propositions. Smart meter's key to this. I mean obviously, it's had a mixed press from a consumer's point of view over the course of the last 10 years, but certainly, a functioning Smart meter estate is a vital enabler for innovation in terms of energy services, and we have focused this year on increasing number of Smart meters we've got installed and obviously a good start, which you -- what you might expect given that we were in another COVID lockdown at the start of the year. We've seen 19,000 meters sold to date, and we should expect to be well over 20,000 smart meters within the business by the end of the year. And I think lastly, in terms of these foundations. So one of them has been with Good Energy for a while, but will remain important as we focus on innovation in terms of generation of service, which is our status as one of the leading players in terms of the administration of Feed in Tariff businesses where people are generating as well as consuming power. We have over 175,000 FIT customers and are once again trying to build new services to support them as they generate power. And this is all underpinned by a commitment to 100% renewable power, which is recognized increasingly by a lot of consumer and other bodies. You can see some of the brands there, so which housekeeping use which in terms of price comparison has also done so. And that commitment will remain the case. And I mean, perhaps, unusually in an investor presentation, but I think importantly, the company's wider purpose has really come to the fore this year, and we have -- we've been very successful in campaigning on a particular issue. So perhaps, no surprise, but I think a lot of evidence that the public policy and consumer agenda is tilting towards Good Energy with an increasing recognition of the impact of climate change and the mix of the climate crisis and the IPCC report which talked about Code Red, but humanity a very strong use of words there certainly, actually, caused a bit of a tick up in our trading department. As you can see people engaging with the specs. I expect COP26 to do the same. Our focus has been on the labeling effectively of energy tariffs in the U.K. where the majority of energy tariffs are now branded as green, yet we know that the majority of generation certainly isn't in green. And in fact, very few of those tariffs really warrant that title. And we've been campaigning against this green washing basically where energy companies can use certificates, which are sold separately from the green power that's opposed to approve to effectively call a tariff green when it is not sourced from 100% renewable power. Personally speaking, I think this is something of a consumer protection scandal, and I can see that the regulatory bodies are beginning to contemplate action. We've seen some strong words from Anne-Marie Trevelyan, the Energy Minister in the last month or so and a call for evidence from base the business department around precisely this issue. So we should expect the public policy wheels to turn, albeit at a slower speed, but what's more gratifying is that other players within the energy market as well as consumers are beginning to take greater interest in this. And I think the initiative that has -- certainly had the biggest impact on us is that you switch who are the biggest price comparison player in energy switching have introduced a gold, silver and bronze accreditation scheme really around the nature of the renewable energy that people are supplying, and we were very proud of our status as the only energy company with all of its tariffs given the gold standard by uSwitch. So that is a belief that the core business of generating, particularly supplying renewable energy, is in good health because of the work the team has done both in campaigning and in terms of it's -- our core systems. Let's turn a bit more to where we see the future direction of the company. As we've said, we increasingly see ourselves as an energy services player and more so than a generator on supplier. And really, our conviction is that we can use digital platforms and digital technologies to help consumers consume renewable power in ways that increases its adoption. And one of those is, obviously, the electric vehicle market. EVs are now the fastest-growing segment in terms of U.K. new car ownership and Zap-Map is by far the leading app for the EV driver, really aimed at making it easier to use and drive and EV. One of the questions I often asked about Zap-Map is, actually how defensible is it? We know there are a lot of technology players who do mapping and the like. And I would point to some of those data points as arguments as to why it is quite a strong defensive mode already. So its coverage is impressive, about 250,000 registered users on Zap-Map now. And you need to compare that to the fact, there are only about 290,000 purely battery-driven cars on the road in the U.K. at the moment. So the penetration of the EV driver segment is very considerable. That registered user number, by the way, it shows good signs of growth within the business. It's about 70% higher than the end of last year and about just over under 40% higher than when we gave our preliminary results presentation in March. So there's been growth in registered users. But from the point of view of defensibility, it's the level of coverage that it boosts with about 95% of U.K. charge points, showing on the service, 70% of which with live data. And the amount of community content it is generating, which of course, is another way of updating drivers as to which charge points are accessible or maybe broken or alike, which is continuing to give it a defensible position. And commercially speaking, it is beginning to hit some important milestones. So you might remember, Zap-Map effectively is a venture investment for the company. We've got a business which has grown a very strong footprint amongst EV drivers, and we are investing behind it to help them build out business in their own right and to give us access to new and different revenue streams as well. And they've made strong progress. So Zap-Map is now a subscription product, and that's virtually app is available on both iOS and more recently, Android. And whilst we're not releasing any specific details about that side of the business today, we can certainly see enough in terms of conversion rates and conversion of trialists into full paying subscribers to suggest that there is a real business to be built here and we're going to try and invest in that carry on doing so. Zap-Pay is, I think, a very useful offer from Zap-Map, which is really aggregating what is still a very fragmented landscape for EV drivers in terms of different charge point operators, different payment cards and memberships as Zap-Pay is an ability to pay for your charging from your phone. There are 3 charge point operator networks live in a total of 7 signed up. So pretty soon, maps that have -- will be able to help an EV driver get from A to B reassured that they can use Zap-Pay wherever they go. And then the other innovations they're working on, I think the party or Fleetcor, where effectively we're going to enable fleet owners to have a good famous sight of how their fleet of vehicles is working much in the way that a petrol system does with Fleetcor will be out in Q4. So it's a strong innovation and delivery on milestones from Zap-Map. And our EV play increasingly isn't just about that. I do think that is an important platform for EV drivers and gives us a very strong foothold with them, but we have followed that up by launching specific tariffs aimed at EV drivers, and we're beginning to see some considerable pickup in interest in those tariffs. And what the graph is showing you is actually the fact that they changed consumer behavior quite considerably that on one of our early EV tariffs, we saw an 80% -- shift of about 80% of the households consumption into off-peak windows. And that is important both in terms of a sign that these tariffs resonate with consumers. But frankly, in terms of our wider purpose, it's interesting because you've seen a 43% shift in load from -- into off-peak times, which will mean that the carbon intensity of the grid as these tariffs scale needs not to be so far on a basis points. So that is where we see our EV platform going. The other big platform for us, we would call decentralized energy. And if you've been following the company for some time, you'll know that this is pretty close to the roots of Good Energy, but it's my definition of what we really mean here, which is we want to help customers generate, consumer manage 100% renewable power. And increasingly, we see digital technologies as being a way of doing this. So where are we really working on what we've done this year in this area. Well, the first, I think, really concerns our Feed in Tariff business, which as I said a few moments ago, is sort of the foundation of our interest in this. We're a major player in it as it is. And it's actually our systems that face into FIT customers to meter readings, updates and the like, actually are beginning to look annotated compared with what we offer consumer and business customers. So we are investing behind our FIT business to provide a better service and better management capabilities. I expect the first code to drop for that in October. It's been worked on by the in-house technology team and that will be to enable simpler meter reading for single-site customers. We're also working on reducing our reliance for those customers on what I call deemed payments. So effectively an estimate paying you for the energy you generate and in favor of payments based on actual generation, which these new systems will enable, eventually making the whole business of meter reading and meter submission, which is quite a cumbersome administrative task in this part of the market much more straightforward. So a big investment in FIT in terms of our own people and time. Smart meter, we've talked about before, but they absolutely enable quite a lot of this innovation, and we're hoping to get over 22,000 Smart meters installed in '21 amongst our own customer base. They are what unlocks things like the EV tariff. And then finally, an initiative that the company has been developing for a while, which has been called a consumer access device, but we're going to market with the brand of the Good Energy Hub. And that is a simple plug-and-play device, which effectively takes data from your Smart meter and helps you visualize it on your mobile phones. They're using increasingly both visualize which devices in your home are using more to power and then increasingly use it to deliver automated meter reading, particularly to FIT customers. And we think it's an important part of our mission, frankly, to use digital technologies to help people visualize all that consuming and consume it smarter. And in fact, if we go to another slide, you can see some screen grounds of how the app will look from the start. So that first screen grab the front there will show somebody who's got their own solar panels, effectively how self-sufficient they are in energy terms. And then the pie chart behind a more functionality, which really recognizes different consumption patterns of devices around the home, raise your television or EV and gives you a visualization of how they're using power and how you might use power more efficiently. And we're hoping to get 5,000 of these devices rolled out effectively, and I support a large beta test by the end of the year. Marketing is already underway to gain interest from some of our core customers, and we look forward to seeing how this, I think, a very good example of how digital platforms can help the consumption of Green Energy go from there. And so that's the end of the sort of formal materials we want to share. I'll just wrap up before we go to Q&A with a summary. And I think what we said today is really, Good Energy has a strong core business. It's spent a lot of time and effort getting into that place. There is -- but there are good foundations in terms of systems and our Feed in Tariff business and are positioning as a deep green supplier, which gives us good confidence for the future. We're cutting through. We're not the biggest energy supplier in the market, but we have certainly had our voice heard in terms of greenwashing as an issue. And you can see both players in the energy industry and eventually government interest in this as a topic, and we will double down on campaigning in that area. We have seen strong financial performance. COVID was a difficult time for any energy company in terms of reduced volumes and increased uncertainty about consumers' indebtedness, and we've weathered that storm. And I think our first half performance shows that the business has recovered from that well. And we are seeing, I think, now a good run of innovation, particularly around either Mobility as a Service or Generation as a Service, two of our core themes, as we continue to marry digital platforms with our renewable entity as a way of helping consumers consume clean energy smartly. And I think that is the end of our formal presentation. So we're now happy to go into Q&A, and we can go through pre-answered questions or pre-ask questions and then anything that's come out during the meeting.

[Operator Instructions] I'd also like to remind you that your feedback is important to the company and immediately after this presentation ended, you'll be redirected for the opportunity to provide the company with your thoughts and expectations. Nigel, Rupert, obviously, we received a number of pre-submitted questions, and firstly, thank you to those investors that took the time to submit questions both ahead of the event and during today's event. And I know you touched on the electricity and your ability to discuss, but I know you wanted to reference and address all pre-submitted questions. So if I may start with the first one, which reads as follows: are there any benefits to an all merger to a merger with Ecotricity? I find people generally are more likely to have heard of them. However, hard I try to promote Good Energy as the go-to green energy company.

Thank you for the question. Yes. I wanted to sort of answer this if anybody sort of explaining why I'm not going to entirely answer it. So let's say, the rules of the takeout panel are very clear and very strict around what we can and can't discuss during an offer period. And they're intended, frankly, to make sure that all investors are seeing all of the same information at the same time. And so all I can do in terms of answering that one really is to once again, reiterate the Board's stance on this, which is that we do not support the offer. We think -- we're strongly advising our shareholders to reject it by taking no action. But we have developed a lot more material on this, which is available in the micro site I mentioned in our Investor Relations site. All of it is carefully verified by advisers. So you can't just sort of throw mud at list as it were. There's some clearly developed arguments, and we're very clear that we think the offer would be a bad thing for the company to accept because we believe in our strategy as a Board, if you like. We think that we have a modern digital view on how the adoption of renewable energy can progress from here. We think that this gives us access to some markets, which are really only just beginning to mainstream and will show very fast growth in there. We've been very clear that we think the offer from Ecotricity, which is a 10.6% premium to the price before they announced it, is a very -- undervalued our business considerably and you don't necessarily need to dig into our financials that much on that. I mean the average figure for businesses of our size is a premium of at least 40% to 44%, so the undervaluation argument. And we are very clear, again, from analysis just of the published results that we don't think Ecotricity would be a good owner for our business. We think that financial performance, which is often loss making, the level of debt, their view on strategy within the energy market are things that would take us backwards and not forward and which is why we've been pretty unanimous in recommending that our shareholders take no action. I think that's all I can really comment on, which all of which is already available and in the public domain.

Next question reads as follows: What plans do the Board have to both retain and reward long-term customers?

Thank you. Thank you for the question. So it is true that whilst there is a considerable amount of churn in particularly the domestic energy market, generally speaking, Good Energy customers are sticky, and they're more loyal. We -- and particularly, customers who are taking other services for us around, say, Feed in Tariffs. And so I would say, a lot of the investment we're doing is around kind of earning that loyalty and securing it. So in the Feed in Tariff world, a good proportion of my technology engineer -- my engineers are now working on improvements to our feed in service to both make it easier to work with us effectively, but also to potentially allow higher income streams for some Feed in Tariff customers. So I think that will be a considerable bonus. And then for the wider consumer group, I think the Good Energy Hub, which I talked about there, is the kind of idea we're trying to develop where we're going to try and make it easier and simpler to consume and manage green energy. So those are a couple of initiatives, I think that will particularly reward our loyal customers. In terms of the financial reward, I think the main thing we do is promotion around customers recruiting other customers, which you'll see on social media at the time, but those are the real plans we've got there.

That's great indeed. What are the key constraints to growth of the business? And how does the Board propose to really overcome them?

Well, you'll see the Board's arguments in quite a lot of our defense materials. So actually, we think we're facing against what are likely to be fast-growing markets, particularly around the adoption of electric vehicles, the fastest-growing segment in the U.K. car market and particularly, around interest in new technologies around home generation. So we think there is kind of good underlying growth available to us in our sort of innovative markets. There's increasing customer interest in what green energy genuinely means, and obviously, increasing regulatory focus on it, which we think should fuel demand growth as well. So on the demand side, we should be able to benefit from growing demand. I think we -- the constraints there are, obviously, we need to do that in a way that is responsible, given the nature of the energy market. So we're not going to go all out to acquire vast numbers of new customers if we're not confident, we can't cover their demand in the energy market and obviously cover it in terms of renewable power. But there's a lot of potential in this business, as we've said, defense material, and we look forward to going after it.

I think you may well have touched on this in some detail, but we did receive a pre-submitted question that asked to provide a little bit more commentary on cash flow and debt policy. I don't know whether there was anything there that you wanted to add to perhaps what you've already said.

Take that or reiterate that.

No, so happy to do that. So I think we touched on some of the movements within debt. So very much our policy is to continue to pay down the debt on the generation assets, having put that all into one loan group earlier this year and with the long-term visibility on that. The second point is around the repayment of the bonds, both approximately 70% that we did in June of this year and the commitment to a remaining element of that by the end of 2022. And then probably just quickly on cash. So I think in terms of uses of cash within the business, obviously, the core energy businesses needs working capital to operate. We have seen some of our cash deployed into businesses such as Zap-Map, and we have restarted the dividend. So I think that -- I think it will sort of continue to consider those as the main sources of -- sorry, that make uses of fat cash within the business.