- Queensland energy company Locality Planning Energy (LPE) saw some healthy customer growth over the 2020 March quarter
- The company said despite the coronavirus crisis, it grew its customers by 6.7 per cent compared to the December quarter
- This brought about a 24.4 per cent boost to cash receipts
- Nevertheless, despite a relatively stable market, Locality Planning is standing down all of its casual staff and some permanent staff to dramatically cut costs
- With COVID-19 restrictions in place, the company’s sales team can’t step out into the field
- Locality Planning shares declined over four per cent today, closing worth 22 cents each
Queensland energy company Locality Planning Energy (LPE) saw some healthy customer growth over the 2020 March quarter.
Unfortunately, it has also joined the list of companies standing down staff to save some cash.
While the COVID-19 pandemic has caused some major damage to economies across the globe, Locality Planning said it saw a 6.7 per cent increase in customers to 28,500 over the March quarter compared to the quarter before.
The company supplies energy to residential homes and small businesses. Locality Planning said the majority of these new customers were from its small-to-medium enterprise (SME) business segment.
This was strategic, according to the company, as LPE said it turned its focus to SME customers before the coronavirus crisis kicked in. According to the company, it had been “historically underrepresented” in the SME world.
Of course, SME patrons still make up just a fraction of total customers, with the company reporting 25,100 residential customers and 3400 SME customers at the end of March.
Nevertheless, the increase in customers helped boost company cash receipts by 24.4 per cent compared to the December quarter to $11.9 million. This is 76.1 per cent higher than the March quarter of 2019.
Locality Planning CEO Damien Glanville said the solid quarterly growth reflects the company’s competitive advantage as a “nimble, service-oriented player in a very large addressable market.”
“While general economic conditions have deteriorated rapidly over recent weeks as a result of COVID-19, LPE’s core business of residential electricity sales in strata communities remains strong and stable,” Damien said.
“Electricity consumption is relatively durable through periods of economic weakness, and LPE’s core residential customers in strata communities are underpinned by long-term contracts providing for stable, recurring revenue streams,” he continued.
Nevertheless, the company is facing its own COVID-19 woes despite the stable market it serves.
To save costs as the coronavirus stops the company’s sales team from stepping out into the field, LPE will be rolling out a redundancy program which will stand down all casual and some permanent staff.
The company said this is expected to save roughly $1 million in the June quarter.
With roughly $8.4 million can on hand at the end of March and expected spending of $10.6 million over the June quarter, it seems Locality Planning is trying to cut costs wherever possible.
Shares in LPE reflected the wider market today, declining 4.35 per cent to close worth 22 cents each.