Octopus Energy profits plummet as it invests in expansion and renewables

Octopus Energy, the UK's largest energy supplier, reported significant changes in its financial performance and customer growth as of April 2024. The company saw its customer base increase to 7.3 million, overtaking British Gas and capturing nearly a quarter of the UK retail energy market according to Cornwall Insights. This dramatic rise was aided by the acquisition of Shell's retail energy arm, adding 1.3 million accounts in December 2023. Octopus Energy's innovative tech platform, Kraken, has been key in its growth, with account numbers rising to 51 million after licensing the platform to other firms. Faced with unprecedented demand, the company nearly doubled its workforce, growing to 8,500 employees from 4,800 the prior year. Although expansion led to improved service capabilities, the company’s pre-tax profit fell almost three-quarters to £77.6 million. Factors contributing to this decline included substantial investment in customer support initiatives, installation of renewable energy systems, and strategic moves aimed at maintaining competitive tariffs during the energy crisis. The decrease in profit occurred against a backdrop of rising revenue which stood at £12.4 billion, a slight drop from £12.5 billion the previous year. Octopus Energy's growth was a concerted effort to stabilize its presence in the energy market while simultaneously ensuring accessibility for its customers. The company focused on providing support for vulnerable customers, implementing programs like providing free electric blankets, and absorbing rising energy costs to shield consumers amid an energy crisis. The extensive deployment of smart meters, heat pumps, solar panels, and batteries, totaling 744,000 installations, illustrates Octopus's strategy in promoting low carbon technologies and renewable energy resources. The future of Octopus Energy looks promising, with ongoing international expansion and innovations in energy technology. The founder, Greg Jackson, emphasized that the company's long-term focus over short-term profit maximization signals a sustainable business model. The ongoing investments in low carbon technologies reflect a commitment to environmental responsibility while addressing the immediate needs of consumers through affordability. As the energy landscape continues to shift, Octopus Energy aims to sustain its growth trajectory while promoting sustainable practices across its operations.