Just Energy Launched At 85 New Store Locations During Quarter, On Track For 500 Locations

In reporting Q1 fiscal 2018 earnings yesterday, Just Energy said that its previously reported (see story here) retail channel expansion strategy, which includes sales at partner retail stores, continued with 85 new store launches across nine different retail partners.

Just Energy remains on track to achieve the goal of being present in 500 stores by fiscal year-end, the company said

Just Energy reported a decline in its customer base as a result of electing not to renew low-margin contracts.

From April 1, 2017 to June 30, 2017, Just Energy saw a net decline of 135,000 RCEs. That's up from the loss of 25,000 RCEs seen from December 31, 2016 to March 31, 2017, but is in-line with the net loss of 134,000 RCEs in the year-ago quarter.

Just Energy said that the current-quarter decline was primarily a result of the higher number of RCEs up for renewal in North America, where the company chose not to pursue lower margin RCE renewals.

Just Energy continues to actively focus on improving retained customers’ profitability rather than pursuing low margin growth, the company said

Just Energy saw net customer growth in its mass market segment, with a net growth of 13,000 RCEs over the last three months (growing to 1.810 million RCEs). In contrast, Just Energy's commercial RCEs decline by a net of 156,000 RCEs during the last three months

Total RCEs for Just Energy stood at 4.076 million as of June 30, 2017, versus 4.211 million as of April 1, 2017 and 4.386 million a yer ago.

Gross RCE additions for the quarter ended June 30, 2017 (Q1 2018) were 245,000, an increase of 20% compared to 205,000 RCEs added in the first quarter of fiscal 2017. The RCE additions were higher in the current period due to the company's more competitive pricing in the U.K. Consumer market which resulted in a 195% growth in additions in the first quarter of fiscal 2018.

For the three months ended June 30, 2017, 37% of the total Consumer and Commercial RCE additions were generated from commercial brokers, 48% through online and other non-door-to-door sales channels and 15% from door-to-door sales. In the prior comparable period, 40% of RCE additions were generated from commercial brokers, 33% from online and other sales channels and 27% using door-to-door sales.

The combined attrition rate for Just Energy was 14% for the trailing 12 months ended June 30, 2017, a decrease of one percentage point from the 15% reported in the prior comparable period. While the Consumer attrition rate decreased five percentage points to 21% from a year ago, the Commercial attrition rate remained consistent at 7%.

Just Energy reported Base EBITDA of $32.5 million for Q1 2018, versus $41.1 million a year ago (all $ Canadian). The decline was primarily due to the decrease in the customer base of 7% and the investment in growth initiatives partially offset by the impact of foreign exchange from the strengthening U.S. dollar resulting in an increase of $1.0 million

Gross margin for the quarter was $157.6 million, a decrease of 3% from the prior year's $162.6 million, driven by the decline in the customer base, partially offset by a positive impact of $3.6 million from foreign exchange.