SPARK Energy, the electricity and gas supplier based in the Scottish Borders, has projected it will hike pre-tax profits to more than £1 million in its current financial year to June.
The fast-growing company, which is focused exclusively on supplying gas and electricity to the residential letting sector and was launched about seven years ago, achieved a maiden pre-tax profit of £337,469 in the year to June 2013.
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Spark chief executive Chris Gauld declared yesterday that profit for the year to June 2014 was likely to exceed £1m even after taking into account heavy investment in customer relationship management software and a £900,000 cost of holding off for as long as possible on passing on a rise in wholesale energy prices to customers.
Mr Gauld said Spark, which has more than 200 staff working in Selkirk and describes itself as a top-five employer in the Scottish Borders, could have passed on more of the rise in wholesale energy prices to customers than it did.
Projecting the hike in profits to more than £1m, and highlighting the investment in customer service, he said: "We are really pretty pleased with where we are. This has been a really good year for us."
Mr Gauld, who was promoted recently to succeed Spark founder and Canadian-born entrepreneur PJ Darling as chief executive, underlined the company's expectation that turnover would rise to about £80m in the current financial year to June, from £40.7m in the prior 12 months. Spark had made a loss of £3.26m in the year to June 2012.
He projected that the workforce would rise from 213 to about 220 by the company's June year-end. And he highlighted ambitions to take the workforce through the 250 mark in the next financial year with the recruitment of about a further 40 staff.
Mr Gauld said that all but about 10 of the employees of Spark worked in Selkirk.
He also noted that the number of properties supplied by Spark, which is owned by a large group of angel and other private investors and also counts Scottish Enterprise as a shareholder, was poised to rise through the 100,000 mark shortly. Spark works with property management companies and social housing providers in the UK.
Earlier this year, Spark entered into a wholesale trading agreement with investment bank Morgan Stanley.
This agreement allowed Spark to access wholesale energy prices for the first time. Spark noted that it had, in return for agreeing to buy its wholesale gas and electricity from Morgan Stanley, obtained access to long-term hedging and supply arrangements for its core commodities on extended payment terms and on a collateral-free basis.
Mr Gauld said: "As an independent energy supplier we have had to overcome numerous challenges and work in a market which has always been geared against us, yet we have succeeded. Through the hard work of our employees and substantial investment into the company, we are now more able to compete with our larger peers."
He added: "We are now seeing an air of change in the energy industry. It is a very exciting time for us as a company."