URGENT UPDATE: The founder of Octopus Energy, Greg Jackson, is pushing for the UK to become the premier location for the potential £6.4 billion IPO of its Kraken Technologies division. In a statement released just hours ago, Jackson called upon the London Stock Exchange to intensify efforts to enhance its market appeal for new listings.
Octopus is preparing to demerge Kraken in the coming months after securing a deal to sell a minority stake, valuing the division at $8.65 billion. Jackson expressed a strong desire for the IPO to occur in London, stating, “I would love it to be London. But I would need to see more hustle from the London Stock Exchange.” This revelation comes amid a competitive landscape where New York is also being considered for the listing.
The urgency of Jackson’s call is underscored by the recent financial performance of Octopus. The company, which serves 7.6 million customers in the UK, reported a staggering £260.1 million pre-tax loss for the year ending April 30, compared to a profit of £77.6 million the previous year. This loss was attributed to greater-than-expected warm weather, which reduced energy demand significantly, hitting earnings by over £100 million.
In addition to the weather-related impacts, Octopus faced costs from a one-off final payment to the UK Government related to its takeover of the collapsed supplier Bulb in 2021. The company also mentioned industry-wide costs that further strained its financials. However, on an underlying basis, Octopus achieved earnings of £90 million, representing a 69% decline as operational expenditures surged.
The company’s robust growth in customer acquisition has not gone unnoticed. Octopus recently overtook British Gas to claim the title of the UK’s largest energy supplier with a 24% market share. Its revenues climbed 10% to £13.7 billion as it added approximately 800,000 customers through switching, showcasing its competitive edge in the energy market.
Jackson emphasized that improving conditions for listings in London is crucial. He stated, “We need to see ongoing efforts to improve London for companies and for investors.” He believes both the London Stock Exchange and the UK Government must work harder to attract capital and investment into UK companies.
As the Octopus Group prepares for the Kraken demerger, it has announced plans to invest an additional $320 million (£237 million) to bolster its balance sheet. This investment is expected to nearly double its current net assets, enhancing the company’s financial resilience.
The situation is developing rapidly, and the implications of Jackson’s comments could have significant repercussions for London’s position as a global financial hub. The next steps for Octopus include finalizing the demerger and securing a favorable environment for the potential IPO.
With Octopus Energy’s future hanging in the balance, all eyes will be on the London Stock Exchange as it strives to regain its status as the go-to market for innovative tech-driven companies. Stay tuned for further updates on this unfolding story.
