Tomato Energy (Electric Only Supplier) - Too Good To Be True ?

masonic

Perhaps I was naive, but when I joined them on 3rd January, I assumed they were taking a similar approach to Octopus and others: That they had the financial backing to offer loss leading products for a few years to capture a critical mass of the market. And I was down with that. Happy to lend them my custom like I did with Octopus before them. Then just a couple of weeks later the Elexon notice dropped. And then Ofgem kicked off the provisional order in April. That was when I felt they were destined to fail, and I decided to leave them a few weeks after that.

The belated 2023 accounts dropped somewhere in between and revealed Senapt had extracted £5m from Tomato in software fees. How can a company with 15,000 unprofitable customers afford that?

We'll get some further insight from the administrators' proposals in a few weeks time, but I would be surprised if this ends up being a story of a group of altruistic entrepreneurs being wronged by greedy customers and a malevolent regulator.

matt_drummer

crumpet_man said:

Money, money , money, me, me, me!

That's why the directors of Tomato Energy started the company!

That is why everybody starts a business, that is the very definition of a business, it's not a crime. No business will ever succeed if it doesn't make a profit.

Nobody needs monetary compensation for every little thing that goes wrong in life,

Soon we'll be claiming because somebody pulled out on us at a junction or somebody failed to hold a door open for us.

It's pathetic, we don't need to be paid for every little mistake that other people make.

This venture was `willed' to fail from the start.

There's no doubt that the management of this company was incompetent but I have no faith that any genuine competent people would stand much chance of success either.

And that is because too many people are out for what they can get for themselves.

MWT

matt_drummer said:

They do not need to submit accounts if `they are done'

They don't even need to if they are not.

Why spend money producing accounts you don't need?

It's over, which I think you know.

Hard to say if Senapt are 'done', there has been a lot of money moving around and a lot of assets owned outside of Tomato, they don't just vanish overnight...

matt_drummer said:

There will be no reasons for the resignation. It's just a form giving their name and the date they cease to act.

It's not like resigning from a job and setting out what you are unhappy about.

They just no longer act for their client.

There is a bit more to it than that, we have to wait a bit longer to see if they feel that a statement is required...

As per the Companies Act:

"Where an auditor of an unquoted company ceases for any reason to hold office, he must deposit at the company’s registered office a statement of the circumstances connected with his ceasing to hold office, unless he considers that there are no circumstances in connection with his ceasing to hold office that need to be brought to the attention of members or creditors of the company."

So, maybe nothing, maybe something...

matt_drummer said:

They were doomed from the start.

Many factors sealed their fate but the 'icing on the cake' are the compensation payments.

Customers not happy with cheap energy but feel the need to punish them too.

Every man for himself as usual.

The frustrating part of this is that I really don't think they were doomed, but they made failure unavoidable by racing ahead of their own abilities and cash-flow.

A more prudent approach to their own growth could have given them the time to fix the software issues in their provisioning/billing engine, and time to learn how to operate in a regulated market. 

 

matt_drummer

When there are no profits everything vanishes.

The administrators take pretty much everything.

It's all worked out in advance - `behind the scenes'

That's how it works, it's not great, I used to do this kind of work, albeit 30 years ago.

It happens time and time again with limited companies in this country, I see it al the time.

Going from memory. the first few pages of this thread shows they were expected to fail, even the title suggests it!

Depositing a statement at the registered office, does that mean it is lodged at Companies House too?

I don't know without research.

Spoonie_Turtle

matt_drummer said:

Going from memory. the first few pages of this thread shows they were expected to fail, even the title suggests it!

Because of the unbelievably low rates they were offering.  That's all it was.  People were interested to see whether a company could succeed offering what appeared to be unsustainably low rates.

MWT

matt_drummer said:

Depositing a statement at the registered office, does that mean it is lodged at Companies House too?

I don't know without research.

That is the first step, the comapny gets 21 days to review the material before it gets sent to Companies House as well.

This gives a chance for the Company to try and get a court order to prevent that happening.

There is some variation in the requirements if the company concerned is considered to be a non-public interest company, but I suspect that the regulated nature of their business would mean Tomato do not meet that standard.   

Newbie_John

Spoonie_Turtle said:

matt_drummer said:

Going from memory. the first few pages of this thread shows they were expected to fail, even the title suggests it!

Because of the unbelievably low rates they were offering.  That's all it was.  People were interested to see whether a company could succeed offering what appeared to be unsustainably low rates.

Unbelievably? So energy, good energy, UW.. rates under 7p are very common. Are they all too good to be true? 😉

Bendo

The compensation payments could have easily been avoid of they weren't so incompetent.  

If you choose to do business in a regulated market, it's generally wise to understand the regulations you are bound to. In Tomatos case, they didn't even seem to be aware that compensation payments for switches not completed in the required time was a thing,  much less that it was doubled if they didn't pay up in the correct timescale as well.

Seems in this case, the regulations did their job and prevented a company run by a clowns becoming even larger and costing everyone more money in the long run.

Spoonie_Turtle

Newbie_John said:

Spoonie_Turtle said:

matt_drummer said:

Going from memory. the first few pages of this thread shows they were expected to fail, even the title suggests it!

Because of the unbelievably low rates they were offering.  That's all it was.  People were interested to see whether a company could succeed offering what appeared to be unsustainably low rates.

Unbelievably? So energy, good energy, UW.. rates under 7p are very common. Are they all too good to be true? 😉

Compare their other rates on those tariffs, with what Tomato was offering.

JohnPo

Bit of progress with the SOLR, it appears an online electricity account has been setup at BG with details that come from Tomato. I simply put my email address into the BG login https://www.britishgas.co.uk/identity/ it invited me to do a password reset and details of start date of 18/11 with 'welcome tomato energy' tariff listed.  I would suggest for those folk who had switched and were worried that BG might try and sweep you up in SOLR, then it might we worth trying to see if an online account has been set up with BG.