Flowgroup Plc Share Discussion Threads

[cautious7] 01/6/2016 20:28

Some one made a lot of money recently, lol

[kooba] 01/6/2016 20:18

DECC consultation still ongoing would imagine a very strong rearguard action to revert volume limits.Flow and other uk companies have invested 10's M into energy efficient technology to see this change of tack at an inflexion point in the technology?U.K. Innovation uk funded uk manufactured disruptive energy saving technology...thought they were areas the government were strongly behind not trying to kill off!!

[smithybobs] 01/6/2016 15:42

dlku - if this was a one trick pony and international sales of the mCHP boiler did not take off it could well be goodnight.

Fortunately there is a fast growth energy business which is providing many avenues to cross sell boilers and other products therefore even without the mCHP boiler Flow is an attractive business.

It appears that lots of PI's out there are obsessed with the mCHP boiler and cannot see beyond.

[dlku] 01/6/2016 13:38

Flowgroup plc (AIM: FLOW), which provides a range of innovative energy technologies, energy supply and energy services, notes the Department of Energy and Climate Change (DECC) consultation document published yesterday which includes a review of the support for Feed-in-Tariffs (FiT) for mCHP. In August 2015, DECC indicated their continuing support for mCHP, reaffirming the FiT rate and the 30,000 unit limit on eligible installations which may benefit from the FiT. However, whilst this new consultation does not propose to change the FiT rate, it does now propose the introduction of a cap of 1,560 units in 2017, 1,560 units in 2018 and 390 units in 2019.

looks finished on new gov subsidy limited to 1500 boilers

goodnight midnight

£40m of hot air

[smithybobs] 01/6/2016 13:14

Thanks for your reply PeterD55, I've also had some feed back on the LSE thread.

[peterd55] 01/6/2016 12:20

Smithybobs,When launching a new product, the most expensive unit to produce is the first one. After producing 30,000 units, you would expect to have learnt lots of lessons, developed efficiencies and improved the supply chain. It's all about getting started.

[value viper] 01/6/2016 08:29

that's been a great bounce tbf off low for any short termers.....

[smithybobs] 31/5/2016 16:33

Posted this on LSE but no response so will try here:

The Fit tariff was previously capped at 30k and Flow was intending to install many more boilers than this figure not to mention if the combi got into production volumes would be much greater.

Therefore my question is how would the boilers being sold after the 30k limit be commercial if no FiT payment available?

Surely Flow must have thought of this or am I missing something so simple?

[dlku] 31/5/2016 14:43

looks finished

[kooba] 31/5/2016 14:34

Not sure why flow has a regulatory expert chair when a key company product so reliant on regulation that is undergoing a 3 yearly review and the company didn't have a clue where it was going.I spoke to the company who said everything was fine back in January re FiT and have the emails to prove it...I reckon though that when launching a key product after years of development and at great expense if you are not in constant contact with the governing body that controls what gives your product a competitive advantage when that legislation is under review is very much having the eye off the ball.As for the goal post moving DECC ...gawd knows how they are going to encourage any company to invest in energy efficiency products in this country if this is the basis of support! Ludicrous tinkering quite worthy of Eu interference ...who needs them if we can trash business through our on government departments.Can only hope some sense is seen here if the relevant parties communicate!

[1861andy] 31/5/2016 10:14

It feels like the boiler is now just one part of an overall strategy including selling other makes of boilers and providing a low cost energy service. At the start i thought this company was set up to sell a revolution boiler system. It may be that it is but they appear to have taken several hits to this strategy, i want to see sales. Its this change in sales dynamic that his hitting market sediment and now on top there is going to be a cap on the number to benefit from the FiT rate.

The AGM appears key will should include an update on how many boilers have actuality been installed. The energy business looks to be progressing well but as a PI i cant get a grip on what point they turn a profit. £100M in revenue sounds impressive but what is the possible profit on that (excluding any CAPEX they are using to expand the business)?

GL all this is still on my watchlist but bit too risky for me as it currently stands as more questions than answers about the business.

[cheaky monkey] 31/5/2016 08:43

Flowgroup is a pioneering energy products/services business, which we think could transform the global boiler market. Its patented combined heat and power micro (mCHP) boiler is half the price of comparable products, and enables households to save literally £'000s on their fuel bills over the life of the appliance.Any sharp fall in shares can offer good opportunities for risk-tolerant investors prepared to take advantage of an over-reaction. We believe this is the situation for Flowgroup after it was forced last Friday to issue an impromptu statement saying that the Department of Energy and Climate Change (DECC) had suddenly proposed to cut the number of UK mCHP boiler installations which can benefit from Feed-in-Tariffs (FiTs) from 30,000 to 1,560 units in 2017, 1,560 in 2018 and 390 for 2019. Although clearly "disappointing" news, we think that - thanks to Flow's overseas expansion plans and successful diversification into domestic Energy Supply and 'smart' heating products (eg Daikin partnership) - any fallout from this potentially negative move will be, at worst, manageable.In fact, at the prelims last month, the Board quietly mentioned that it was hopeful of selling some of its revolutionary 'electricity generating' mCHP boilers in Italy towards the end of this year - a full 12 months ahead of our forecasts. The Italian market is Europe's 3rd largest, representing >600k units pa, offering attractive incentives for low carbon heating systems, covering up to 65% of the cost of each device.Flow's home energy business continues to go from strength to strength, with currently >200k customers registered or being processed. So we make no change to either our projections or 42p/share price target - with the latter based on a 1.5x 2017 revenue multiple for the mCHP division, a valuation of £250 per fuel account and anticipated Dec'16 net cash of £5.9m. Furthermore, this prudently ascribes zero value for the rest of the group - thus potentially offering further upside from the Daiken relationship and other attractive deals that may be signed in due course.

[brummy_git] 31/5/2016 08:36

New research out this morning from Equity development

www.equitydevelopment.co.uk/doc/1494.pdf

[diku] 28/5/2016 15:16

Any green deals out there?...

[value viper] 27/5/2016 21:56

sorry, this is the end of the boiler !? is it game over ? - not exactly how I read it, appeal for starters. subsidy reductions proposed - whilst not good news (if indeed it actually happens), the co will seek mitigating self help....and meanwhile the energy business keeps growing.

[1861andy] 27/5/2016 20:57

Guess that explains the 8% drop before RNS!

Disappointing end to the flow boiler it seems after what seems so much work!. Although the energy business does look to be doing well they just need to translate this into revenue/profits.

As to how this may be valued who knows we could see sub 10p untill we get a firm forecast of future revenue/profits. 200K in accounts and £100m in revenue does look promising, hopefully there will be a further update at the AGM!

[kooba] 27/5/2016 18:26

Yes it is and probably more than supports a valuation higher than the close...but the uncertainty on strategy is obviously taking toll today maybe a refocus of all efforts (and cash ) on the energy business until this consultation closes is appropriate.One thing that is also happening is that there is a land grab going on in the independent suppliers and the current situation may well prompt interest in the flow energy business...with valuations of £300 plus per customer and with the rapid growth of flow energy model one could see a substantial premium over market cap for that alonenice that it leaked into the market from the open and the company managed to get an rns out at 3pm ...bloody Cenkos as Nomad ..must avoid their companies!

[value viper] 27/5/2016 18:12

What about the domestic energy business that is seemingly flying though ? Thought that was integral to the investment case here not just the Boiler product ??

[kooba] 27/5/2016 18:05

What a boring nasty pos ...hope you choke!As for the quango overseeing FiT well difficult to know what to say but trying to kill off any investment in energy efficient technology would seem to go rather against their remit and is totally bonkers on a uk innovation that was not only invented but would be manufactured in the uk...absolutely bizarre.As to what our regulatory expert non executive chair getting £100k a year for her expertise in what exactly? was doing as this consultation was going through is beyond me.Can only hope somewhere some sense prevails on Micro CHp and that the company is able to turn this around.The company obviously has the electricity supply side but still the flow boiler was centre of their energy solution effort and however they talk about smart meters and Daikin that side of the business model is scuppered for the time being.Overseas markets are still viable but nothing signed in Italy or Germany yet but there is still promise...seems not just EU that talks energy efficiency then moves the goalposts we can do that just as well in UK !

[staverly] 27/5/2016 17:56

DECC's original 30,000 ceiling wasn't exactly pushing the boat out, but these (S2C) heavily revised numbers ostensibly render the Flow boiler business, already a borderline proposition, a dead duck. Very disappointing news.

[cautious7] 27/5/2016 17:00

Hi

Any still "topping up,"??

LOL
Ok, going out after a shower as finished work early, bite to eat, drink, people wath and then big meal about 9pm

DYOR

LOL