Ovo Energy Leadership Change

The chief executive of Ovo Energy, one of Britain’s largest energy suppliers, will step down as he looks for investors to pump hundreds of millions of pounds into the company. David Buttress, who joined Ovo in May 2024, has told his colleagues he is leaving the company after talks with the board.

Background

Buttress, the former Just Eat boss who briefly served as Boris Johnson’s living expenses tsar, will be succeeded by Chris Houghton, the former Ovo boss under founder Stephen Fitzpatrick. Houghton is due to return as CEO from Wednesday and has expressed confidence in Ovo’s prospects.

Leadership Changes

In addition to Buttress’ departure, the company’s chief financial officer, James Davies, will also leave the company. He will be replaced by Simon Todd, his deputy and long-time Ovo manager. The latest leadership change at the company comes just months after former Virgin Money boss Dame Jayne-Anne Gadhia was appointed chair of Ovo’s energy retail division.

Company Overview

Ovo has around 4 million residential customers, putting it behind the likes of Octopus Energy and Centrica-owned British Gas in the home energy supply market. The company has been backed by investors including Japan’s Mitsubishi and London-based investor Mayfair Equity Partners.

Funding and Regulations

The drive to raise around £300m of new equity in Ovo has been underway for months, with Rothschild bankers in talks with numerous financial investors. However, investor uncertainty has been heightened by energy regulator Ofgem’s capital adequacy rules. Ovo recently acknowledged that the company was not yet fully compliant with the rules, saying it had taken proactive measures to adapt and was working constructively to meet the requirements.

Future Plans

Ovo has separately hired advisers from Arma Partners to explore selling a stake in Kaluza, its software division. The company was founded by Stephen Fitzpatrick, the entrepreneur who now owns London’s Kensington Roof Gardens, and has undergone significant changes since its founding in 2009. The turning point for Ovo came in 2020 when it bought SSE’s retail division, transforming it overnight into one of the UK’s leading energy companies. However, growth has not been without difficulties, particularly relating to the difficult relationship with Ofgem and a flood of customer complaints about overpricing.