Energys Group (ENGS) Registration Filing summary

Company overview and business model

• Provides end-to-end energy-saving solutions, primarily retrofitting lighting and infrastructure for public and private sector clients in the UK, with expansion plans for the US and Europe.

• Offers turnkey project management, including consultancy, design, installation, and maintenance, with a focus on LED lighting, IoT-enabled controls, and other carbon reduction technologies.

• Products are designed in Hong Kong and manufactured in China by OEMs; the company is shifting toward software and firmware development for smart building applications.

• Revenue is mainly project-based, with limited recurring revenue and customer concentration risk; most sales are in the UK, with plans to diversify geographically.

Financial performance and metrics

• For the year ended June 30, 2023: revenue was GBP6.0 million (US$7.6 million), up 21% from the prior year; net loss was GBP2.3 million (US$2.9 million), a 49.6% increase in loss.

• For the six months ended December 31, 2023: revenue was GBP5.1 million (US$6.4 million), up 84% year-over-year; net loss was GBP0.6 million (US$0.8 million), a 34.8% reduction in loss.

• Gross profit margin for the six months ended December 31, 2023 was 20.8%, up from 17.6% in the prior year period; for FY2023, gross margin was 18%.

• As of December 31, 2023, the company had an accumulated deficit of GBP6.8 million and a working capital deficit of GBP9.7 million.

• The company has experienced negative cash flows from operations and its auditor has expressed substantial doubt about its ability to continue as a going concern.

Use of proceeds and capital allocation

• Net proceeds from the IPO (estimated at US$9.7 million, assuming no over-allotment) will be used to expand the UK network, procure inventory, establish subsidiaries in the US and Europe, pursue M&A, expand R&D, repay bank loans and promissory notes, and for general working capital.

• US$300,000 of proceeds will be placed in an indemnification escrow account for 18 months post-closing.