Within a long-term hedging strategy, we helped Poundland further improve their rates through unlocking and relocking an already 100% hedged position by actively monitoring the market, to use the volatility in the market over the past year as an opportunity. This was a trading decision made in conjunction with the customer through regular market updates and trading strategy conference calls.
Poundland has a large and diverse portfolio of electricity supplies which we purchase on the basis of a bespoke risk-managed strategy in close co-operation with their internal team. From day-1 we have worked to achieve, and out-perform, against budgetary targets which we have worked with Poundland on in terms of the breakdown of commodity and non-commodity costs
Against this backdrop, we have also worked closely with Poundland to incorporate the transition of new sites, particularly in relation to the 99p Stores portfolio whereby bridging contracts were put in place to ensure both consistency and cost-minimisation at a particularly critical time for the group.
RESULT: Through close collaboration with Poundland, we have delivered a price significantly below the market average using a long-term cap-and-floor hedging strategy and unlocking/relocking. The final price achieved for the April-17 annual contract resulted in a 12% saving against the market average. That’s a saving of £582,400. This reduction in the wholesale element enabled the customer to mitigate the continual rise in pass through costs.