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Just Energy Sales At Current Retail Storefronts On Track To Add 140,000 RCEs Annually

Just Energy Set To Launch In New International Market

Discusses Potential "Weeding Out" Of Smaller Retail Suppliers Given Headwinds, Texas Retirements; Opportunity For Inorganic Growth, Improvements To Competitive Environment


November 10, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

During an earnings call, Just Energy executives said that the company will begin signing up customers in the Japan retail energy market in the next 30 to 60 days.

As reported yesterday, Just Energy has continued its retail channel expansion strategy with 152 new store launches across 11 different retail partners for a total of 237 stores. The company remains on track to achieve its goal of being present in 500 stores by fiscal year-end (March 31, 2018)

Executives reported that at the current level of 237 stores, the company is selling at an annual rate of 140,000 RCEs a year in new customer additions. That reflects two sales per store per day, higher than Just Energy's target of 1 to 1.5 sales per day under its economic case for the sales channel

Just Energy targets $250 of annual margin from the retail store enrollments, and has various approaches to the retail store sales (from contracted operations to self-operated). Executives said that "worst case" economics show a 3.5 quarter payback to achieve the target annual margin, at contracted locations. Self-operated locations have a superior return in that the $250, $260 margin will payback in as little as 2.5 quarters.

Asked by an analyst about potential acquisition opportunities or an improved competitive environment as smaller retail suppliers are challenged by the same headwinds that impacted Just Energy during the quarter ending September 30, 2017 (see discussion here), Just Energy co-CEO James Lewis said, "[W]e see some smaller competitors getting hurt, so that does open up opportunities for us ... one of the things that we also think is going to happen is we’re going to see some tightness in the Texas market, with some of the generation retirements there, which we think can be a positive as well. One of the things we should see going forward is maybe some volatility back in that market, and that's another thing that tends to weed out some of the smaller competitors or some of the folks who don't hedge."

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