The Kensa Group, the UK’s leading manufacturer and installer of ground source heat pumps, has posted its results for the financial year to April 30 2021.
Strong business performance in an unprecedented year
Revenues increased by 82% to £25.14m producing a profit of £0.62m as the Group continued to deliver solutions for private householders, self-builders, social landlords and housebuilders, as well as launching a new division targeting installations in the commercial building sector.
Commenting on the figures, Simon Lomax, Group CEO, said:
“The results represent a significant development in the Group’s activities and are all the more remarkable given the challenges presented by Covid-19 and Brexit. Our employees, clients and supply chain partners also displayed remarkable resourcefulness to complete projects ahead of the closure of certain subsidy schemes, notably the Non-Domestic Renewable Heat Incentive (RHI).”
“The Group has substantial cash reserves and is well-placed to continue its growth to complement the government’s emerging heat pump deployment strategies to achieve 600,000 installations a year by 2028.”
Headquartered in Truro, and with a commercial office in Exeter, the Kensa Group was established in 1999 and is part-owned by Legal and General Capital following an investment in April 2020. The Group employs 140 staff nationally having increased headcount by 40 over the past year, supported by investment into a new factory in Cornwall. The Kensa Group is the long-established market leader with a recent Government study reporting that Kensa manufactured over 40% of all the ground source heat pumps installed in the UK.
James Standley, Managing Director of Kensa Heat Pumps, the manufacturing business, said:
“Overall Kensa Heat Pumps has seen strong business performance amidst an unprecedented year, with revenues rising to £7m (£4.3m prior year) with a healthy order bank looking forwards. As was the situation for many manufacturers, the 2020-2021 financial year brought significant operational and supply challenges in addition to a spike in demand driven by the end of the Non-Domestic RHI.
“At Kensa we put a focus on our people as we helped existing staff handle rapid growth during a pandemic, as well as recruiting new staff to the team at an ever-increasing pace. Significant investment was made to bring talented individuals to our Research and Development team and we have some exciting projects in the pipeline. We are proud that we have created so many high-quality jobs here in Cornwall as Kensa’s manufacturing facility remains located in one of the poorest regions in Europe.”
“Where possible we utilise a local supply chain, and we hope more of our competitors will choose to locate manufacturing facilities in the UK to further boost the economy and lower the embodied carbon of their products. Importing heat pumps from around the globe is incompatible with any ambition to minimise our carbon footprint, and we urge the government to provide increasing support to bolster UK job creation.”
Dr Matthew Trewhella, Managing Director of Kensa Contracting, the installation business, added:
“Through 2020-2021 Kensa Contracting saw considerable growth in revenue against a demanding backdrop. Building on this momentum, we have made several key appointments in anticipation of the next phase of development. Our sales and delivery teams are located throughout the UK and we continue to attract excellent recruits as the appeal of our solution becomes understood across the sectors. The outlook for 2021-2022 looks healthy.
“Whilst it is understandable that some very short-term support programmes have been introduced to mitigate the economic impact of Covid-19, it is vital that the government implements long-term policies which support low carbon heating solutions whilst minimising the system-wide cost of heat decarbonisation.”
Kensa’s vision for the future
Throughout the 2020-2021 financial year, Kensa devoted significant resources to engaging stakeholders in its vision for achieving heat decarbonisation in the UK. Kensa believes that installing networked heat pumps across clusters of properties within communities will eliminate the traditional cost barriers to ground source heat pumps and provide the best outcomes for all. Realising this vision will underpin Kensa’s activities over the next five years of ambitious growth.
Central to this concept is the installation of ground source heat pumps into each individual dwelling served by communal ambient loops delivered on a ‘street-by-street’ basis using a novel ‘split ownership’ model whereby householders do not pay upfront for the underground infrastructure. This system architecture and ownership model mimics existing arrangements for gas boilers yet instead provides householders with the most efficient, lowest carbon, and most flexible heat pump solution, especially if the source temperature (in the loop) is bolstered by using waste heat.
Kensa has developed a strong economic case to promote interest in the ownership of the ground array assets.
Simon Lomax explains:
“There is considerable interest from local authorities, water companies, energy companies and investors wishing to own the underground infrastructure associated with ground source heat pumps and recoup their investment via an annual standing charge. We are calling on Government to provide a small fraction of these avoided costs as grant support to stimulate the market for networked heat pumps with split ownership models.
“Crucially, networked heat pumps are more than twice as efficient as air source heat pumps during cold weather, which means there will be considerable savings across the electricity grid as it won’t be necessary to invest in so much generating/storage capacity, and distribution network upgrades will be less costly. They are more reliable and durable as they are not exposed to the elements, and they are quieter too and can provide cooling.”
A new Group company, Kensa Utilities, has been established to promote this vision amongst other stakeholders and to develop some exemplar projects including the ‘Heat the Streets’ initiative, part-funded by the European Regional Development Fund, which will see entire neighbourhoods in a Cornish village upgrading to networked heat pumps.
Established in 1999, privately-owned, and headquartered in Truro, Cornwall, the Kensa Group is a fast-growing collection of award-winning businesses involved in the manufacture and installation of ground source heat pumps and the ownership of associated underground infrastructure.
Now employing over 90 people the Kensa Group wholly owns Kensa Heat Pumps Limited and Kensa Contracting Limited.
Kensa Heat Pumps remains the UK’s only manufacturer of ground source heat pumps and is the long-established market leader according to BSRIA annual reports. It provides products and technical support to an extensive network of plumbing contractors.
Kensa Contracting is a specialist installation business that focuses on large-scale new build and social housing retrofit programmes. It benefits from unrivalled experience and expertise and has delivered the UK’s largest installations in the residential sector.
Kensa Utilities is an infrastructure asset company that funds, owns and maintains shared ground loops that serve heat pump installations. It utilises subsidy support to provide these assets at zero cost to the housebuilder or social landlord.
The Kensa Group is partly owned by Legal & General Capital, part of Legal & General PLC.