Last updated; 15 November 2021
Simplicity Energy ceased trading on 27 Jan 2021.
Simplicity Energy is currently in administration. The administrator is FRP Advisory.
The now bust energy supplier had approximately 50,000 domestic customer accounts. These accounts have been moved over to British Gas Evolve, British Gas’ swanky new energy supply brand.
British Gas placed all Simplicity Energy customers onto a single tariff. The tariff, called Simplicity Promise, is fixed until 31 March 2022. For a consumer with average energy usage, the bill comes in at £1,041 per year. At the time of the move, this was a really pricey tariff. Most Simplicity Energy customers saw their energy bills increases of over £100, and many saw energy prices hiked by £220.
Roll on 9 months and it is now looking like a good deal. A very good deal indeed. For now, that is. Because when the tariff ends, ex-Simplicity customers will get moved onto British Gas’ Standard Variable tariff which is subject to the energy price cap. And the energy price cap is going to go up again on 1 April 2022.
Our analysis of forward wholesale energy prices indicates that the energy price cap is forecast to increase to around £1,650 on 1 April 2022.
That means ex-Simplicity energy customers will see their bills increase by between 75% and 100% over the course of 14 months. That is going to be very painful for many.
Why did Simplicity Energy go bust?
So, what caused Simplicity Energy to pull the plug? Did they run out of names for their vegetable-themed portfolio of tariffs? Probably not.
So, let’s take a peak at their financials.
The latest published financial statements for Simplicity Energy Limited were for the year ended 31 March 2019. Financial statements for year ended 31 March 2020 are not yet due. However, given that the company is now in administration, they are unlikely to ever be published.
For the year ended 31 March 2019
Profit and Loss
Revenue: Not disclosed
Loss: Not disclosed (energyscanner.com estimate approx. £1.4m).
Net Assets (£1.4m) – i.e. negative £1.4m
However, this included £260k of capitalised intangibles. Excluding intangibles, net assets were negative £1.7m
Joe Malinowski, founder of energyscanner.com noted. “To be honest, this one did not come as a great surprise. Simplicity Energy started out in May 2018 as a regional supplier centred around London, the South East and the Midlands. It was a full year before they expanded coverage to England and Wales. We’ve never seen the rationale for a regional strategy in energy supply. Indeed, there hasn’t yet been a single regional supplier that hasn’t gone bust.”
“They scored surprisingly well on Trustpilot. However, despite that, from our experience they were operationally challenged. And apart from being able to lose money by being cheap in a market where all other players also lose money by being cheap, how else were they going to make it? Well, the simple (no pun intended) answer is; they couldn’t and didn’t.”
Simplicity Energy goes bust – public statement
And finally, posted here for the record.
So it’s adios to Simplicity Energy.