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Independent Energy pledge on billing glitch.

Solihull electricity and gas supplier Independent Energy yesterday revealed the full extent of its billing problems which have knocked 28 per cent off its share price in the past three days.

The group, which was forced to admit the problems on Tuesday after its shares tumbled, yesterday revealed that it had not been able to bill nearly 30 per cent of the pounds 330 million worth of sales it is claiming in its interim results.

However, chief executive Mr John Sulley said that the group had three weeks ago installed new software and procedures to get around the problem.

It has now issued bills to domestic and small business customers representing 52 per cent of the pounds 166 million these customers owe.

He stressed that 60 per cent of total revenues in the half came from larger business customers whose billing has not been a problem.

He blamed incomplete meter readings passed on to the group by regional electricity companies from whom Independent Energy has won customers.

"It's not a credit problem but a problem of delayed billing, which is affecting the whole industry," he said.

His comments seemed to reassure the City and Independent's shares recovered slightly, rising pounds 1.62 to pounds 25.25.

Until rumours of the billing problems surfaced this week, the shares had shown unbroken exponential growth.

Having floated on AIM three and a half years ago at only pounds 1, they transferred to the full list in November and reached a high of pounds 32.32 last week.

Mr Sulley said the costs of the problem in extra interest payments and extra software in the half knocked around pounds 1 million from the group's profits and it will cost up to another pounds 2 million in the second half.

However the group's pounds 12.1 million first-half profit still exceeds analysts expectations.

Turnover in the half grew by 284 per cent to pounds 338 million.

A year earlier the group only reaped pounds 88 million in sales. It now has 259,000 customers for electricity from only 2,425 six months ago and 63,000 gas customers compared with none six months ago, thanks to the acquisition in October of gas supplier York Gas.

Independent is now adding around 7,000 customers a week on average.

In December, the group signed a deal with Midland neighbour Future Integrated Telephony to market telephone packages to its customers in return for a stake in FIT's rocketing equity.

Mr Sulley said he was confident the group was on target to win the target 57,000 new telephone customers in the year which will entitle it to a 15 per cent stake in FIT.
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Author:City, ROBERT LINDSAY
Publication:The Birmingham Post (England)
Date:Feb 17, 2000
Words:446
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