Octopus Energy Reports Annual Loss After Mild Spring Cuts Demand

(Bloomberg) — Octopus Energy Group Ltd. swung to a full-year loss after reporting declines in gas consumption and one-time costs from its acquisition of Bulb Energy Ltd.

The British energy supplier reported a net loss of £255 million ($344 million) in the 12 months to April, compared with a profit a year ago. Britain’s warmest spring on record has reduced heating demand, it has been said.

Founded a decade ago, Octopus has grown rapidly to become the country’s largest energy supplier. But it didn’t turn a profit until 2023, and that year’s gains were wiped out by lower energy use and a series of one-off expenses, as well as heavy investments in its heat pump, car charger and solar businesses.

Octopus agreed to acquire failed vendor Bulb in October 2022, gaining 1.5 million accounts. But it was forced to return billions of pounds to the government to cover costs incurred by the state when it took the Bulb into temporary public ownership a year ago.

Octopus said on Tuesday that repayments were the main reason why cash fell to around £1.5bn in the last financial year from £4.2bn the previous year.

During the energy crisis, many electricity and gas suppliers went bankrupt in the UK. As a result, industry regulator Ofgem has tightened the rules governing companies’ cash reserves, saying companies need to hold more cash to withstand large fluctuations in wholesale prices.

Octopus said earlier this year that it did not meet the requirements but was working towards compliance. He said Tuesday that the targets had not yet been met.

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