Energy Assets Share Discussion Threads

[rivaldo] 12/11/2015 10:17

Cheers Cisk. EAS will hopefully move back to the 600p's pronto after such strong results.

OT : nice tip re Chrome - I'll be trying that one asap!

[cisk] 12/11/2015 09:43

Here you go Riv!

BTW if you have chrome, once you've reached your limit switch to incognito mode and then can you continue over the limit ;-)

Energy Assets
507p +42p
Questor says BUY
ENERGY Assets [LON:EAS], which installs smart electricity and gas meters for industry, enjoyed a share price jump of almost 10pc yesterday as first-half results reassured investors.
The company said that the core meter asset management division, which generates around half of group profits and installs meters, had a strong first half when it increased group revenue by 22pc to £20.6m. By the end of September, the number of owned or managed meters rose from 365,000 at the end of March to 404,000.
The market expectation is for full-year pre-tax profits to reach £10.6m, up from £9.3m last year. The company should generate 30p in earnings per share for the 12 months.
Energy Assets buys smart meters, installs them and charges an annual fee for their use. The average meter costs £850, and generates £135 a year in rental fees for the company. The upfront capital cost of the meters is funded by debt that is paid off over an eight-year period, but the meter can last at least 20 years.
The rental fees Energy Assets earns are guaranteed by blue-chip names such as npower, British Gas and Gazprom; the fees also rise with the Retail Prices Index for up to 15 years. The Government requires all industrial customers to have smart meters installed by 2020, and this should support steady growth until then. The company’s Siteworks, which installs the meters, reported that revenue increased by a third during the first six months.
Once the company’s debts are reduced it can start paying dividends. The shares are down about 20pc from record highs of 621p reached in June. That said, Questor likes the growth profile and income potential despite the risks inherent in investing in such a small company at an early stage.

The shares are trading on a PE ratio of 15, but due to the growth in revenue and profits that falls to 13 times next year.
We like the potential for steady cash generation and the shares remain a buy for the long term.

[rivaldo] 12/11/2015 09:38

Tipped as a Buy by the Telegraph's Questor column - can't access it as I've reached my limit of monthly articles, so if anyone else can paste it that's be appreciated!

[aishah] 11/11/2015 09:18

Exited. No complaints as I doubled my money. GLA

[rivaldo] 10/11/2015 14:33

Numis reiterate their Buy and 660p target:

[cisk] 10/11/2015 11:28

gb, yep i'm watching the trades going through to see if the spread narrows.

tbh though I would only add maybe 10-15% to existing holding.

Think the market was probably playing silly b*ggers with this one in marking the price back quite savagely - although it probably got ahead of itself back in April so in reality it's probably just under where it should be - note I'm no chartist though ;-)

500 - 520p looks a reasonable short term target.

Wonder if naked trader will be buying any more?

[ascov] 10/11/2015 10:45

Phew.....good long term as are AXS and NANO, fingers crossed. Good business models and products are usually worth patience.

[nurdin] 10/11/2015 09:51

Excellent interims.Glad I held on through the somewhat surprising turmoil in the share price.

[gargleblaster] 10/11/2015 09:51

riv - nice one - looks like a good call to sit tight.

Cisk - couldn't agree more. Might be better to wait a while and keep an eye on the spread over time - of course by doing so you run the risk of the share price running away - c'est la vie!

[maiken] 10/11/2015 09:46

so price weakness pre results was just a blip after all.Results actually make reference to Co.'s confidence that borrowing facilities will meet their funding requirements.
Looks to me like recurring cash inflows will start to exceed capital outflows by next year.Happy days !
Agreed Rivaldo that 30p eps to March'16[fully diluted] looks eminently achievable.
Any forecasts out there for next year? 35p would be my first stab but I admit i'm not fully on terms with the sustainability and consistency of the non-recurring consultancy revenues [currently 38% of revenues].

[cisk] 10/11/2015 09:37

gb, the spread is currently 24.75p and i tried a buy at 485 but it wasn't filled.

this smacks of daylight robbery by the MMs, after all the mkt cap is £130m.

[rivaldo] 10/11/2015 09:07

Hi gb - I held and may well top up if the price holds at these levels.

[gargleblaster] 10/11/2015 08:37

riv - agree with your views and the market seems to as well. Unfortunately I sold out in all the turmoil. I made the mistake of thinking the market knew something it didn't! Now looking to get back in - but of course faced with the spread again (a lesson in itself). Did you hold or trim back during the gyrations riv?

[rivaldo] 10/11/2015 07:12

Results out, and they look excellent at first glance. 14p EPS in H1 puts EAS well in line with almost 30p EPS expectations this year.

H2 "has started well".

The overall chart uptrend remains upwards, and the recent decline is almost certainly due merely to a bit of profit-taking in a relatively illiquid stock.

Given these high levels of growth and recurring income the share price could easily be back at 600p soon imo.

[gbb483] 02/11/2015 14:51

Given results being due, my guess is they've just gone to the printers and some punters have had a preview.

[maiken] 02/11/2015 13:23

ASCOV,62% of revenue is rental.The other 38% is consulting and,I assume,rather lumpier and less predictable.
if there is a placing let's hope there's an open offer to allow private shareholders to participate.A private placing at a sizeable discount is what stuffs/dilutes the rest of us
A company statement may be appropriate but I doubt we'll get one with results due in 8 days unless they are forced to say something by the authorities.
it may all be a storm in a teacup but it smells a bit funny to me.DYOR etc

[sharw] 02/11/2015 13:21

From the 1/9 statement:

"Trading in the current financial year is in line with management expectations and the Group is on track to deliver another year of solid growth.

The Board looks forward to updating shareholders further following the publication of our Half Year Report for the six months ending 30 September 2015 which will be released on 10 November 2015."

If there was any significant divergence from that the company would be obliged to issue a statement.

Are this morning's gyrations due to illiquidity? So far shares traded are less than 1/3 of 1% of the company's share capital.

[gbb483] 02/11/2015 13:17

A company statement would only add fuel to fire. If you need a company statement then you're better off selling up and going and growing tomatoes.

[luafc] 02/11/2015 12:14

Anybody think a company statement may be appropriate?

[nurdin] 02/11/2015 12:13

Curious that share price is in decline,even more so today.Perhaps time to add,assuming there are no skeletons in the cupboard

[ascov] 02/11/2015 11:14

The business model is to buy kit then rent it. The need for cash is dependent upon rate of growth. The value is in forward contracted income, what is clever is that they have income contracted forward for years to come. So unless their customers go bust this is a money making machine. They borrow £1 which gives them £10 of contracted income. If they sold the business tomorrow it would be valued on the £10 not the £1. If they need to raise money and the share price falls...buy.

[ramridge] 02/11/2015 10:40

maiken - your post crossed mine. I agree with your last bit. Raising debt is probably no longer a reasonable option so a placing for a further acquisition is a strong possibility to me.
But I no longer have an interest so this will be my last post.
GLA

[ramridge] 02/11/2015 10:36

WJCCGHCC - MMmm not knocking it. But balance sheet is too weak for my liking and needs patching up.
Apart from bad gearing level, CA/CL is less than 0.8.
If the b.s. had been OK ish I would be buying more as recurrent revenue is really good.
But I sold earlier at a small loss.
Again please DYOR

[maiken] 02/11/2015 10:28

well yes and no ramridge...WJC is quite right.Cashflow is negative simply because the co. are in the middle of a massive investment cycle.That's their modus operandi.It's what they do !And I'm very happy with that as they get over 13% ROCE [and rising].And their revenues on the meter business are guaranteed pretty much.
So I personally don't agree with your suggestion that gearing is bad.
Having said that I think you may well be right that they are always looking for an opportunity to raise more equity.In fact,I now wonder if they are planning to fundraise for an acquisition to be announced alongside the results [just speculation,DYOR etc]

[gargleblaster] 02/11/2015 10:24

They were trading in line as of 1st of September according to the trading update. The fundamentals look okay imo, but agree that sentiment has turned somewhat with energy prices down (SMS also struggling in terms of sp).