Utilitywise (AIM:UTW) - awful announcement highlights the impact of questionable estimates!
The utility cost management consultant has come out with a whopper! Original estimates have been found wanting which now sees UTW having to make a multi-million pound repayment – does this highlight a deeper problem?
Utilitywise has agreed to repay £7.6m in commissions previously received from an energy company. The Group receives 80% of its expected total commission on each new business contract from the Energy Company upon the commencement of supply of energy under the contract. The final level of commission is typically assessed at the end of the contract, with a balancing payment then made between the parties to align the correct amount of commission ultimately due to the Group in respect of each contract. On average, this is apparently typically a further payment to Utilitywise as overall consumption exceeds 80% of the…