UPDATE: Octopus Energy’s founder, Greg Jackson, urgently calls for action to position London as the prime choice for a potential IPO of its £6.4 billion Kraken Technologies division. As plans for a demerger loom in the coming months, Jackson emphasizes the need for the London Stock Exchange (LSE) to enhance its appeal for new listings.
In a statement made earlier today, Jackson highlighted the critical juncture facing Kraken following a recent deal that valued the technology unit at $8.65 billion (£6.4 billion). He expressed a strong desire to choose London for the stock market flotation, stating, “I would love it to be London. But I would need to see more hustle from the LSE – they need to be bringing in more capital.”
Jackson’s comments come after Octopus, the UK’s largest gas and electricity supplier, announced a significant $1 billion (£740 million) equity sale in Kraken to a consortium that includes D1 Capital Partners and Fidelity International. This funding is critical as the company faces a substantial pre-tax loss of £260.1 million for the year ending April 30, a stark contrast to the previous year’s profits of £77.6 million.
The loss is attributed to various factors, including lower energy demands due to warmer weather, which alone accounted for a hit of around £103 million. Jackson pointed to the UK experiencing its hottest spring since 1885, resulting in a 25% drop in gas usage in April.
Despite these challenges, Octopus has seen growth in its customer base, now serving 7.6 million households in the UK and nearly doubling its overseas customers to 2.4 million. The group reported a 10% increase in revenues, totaling £13.7 billion.
Looking ahead, Jackson insists that more must be done to make London a competitive marketplace for listings. He urged both the LSE and the UK Government to actively promote investment in UK firms, noting, “We need to see ongoing efforts to improve London for companies and for investors.”
Octopus has also confirmed it is working with the regulator Ofgem to meet financial resilience targets, despite some concerns about capital adequacy. Jackson reiterated the company’s commitment to maintaining financial stability and resilience as it prepares for the future.
As Octopus Energy gears up for the Kraken demerger, all eyes will be on the London market. Jackson’s remarks highlight the urgent need for improvement in the LSE infrastructure, which could play a pivotal role in determining the future of Kraken Technologies.
For now, stakeholders are left awaiting further developments as Octopus continues its ambitious expansion plans and navigates the complex landscape of the energy market.
