Eenergy Share Discussion Threads

[pcok] 14/1/2021 12:04

Share making good steady progress. Maybe a good sign this is a tumbleweed board as eaas clearly currently under the radar.

[pcok] 11/1/2021 15:47

Just bought in. Like the business model and greener options are the way to go.

[livewireplus] 16/12/2020 16:13

Indeed .... the acquisition looks to have good possibilities... so onwards and upwards on a steady basis ... :-)

[robsy2] 16/12/2020 15:44

Likewise. Should continue to do well i think.

[cheshire man] 16/12/2020 15:40

Been a very good investment for me to date :-)

[robsy2] 16/12/2020 15:38

.... They have a lot to do. Many strings to pull together but they come over well and the opportunity is there.

[robsy2] 16/12/2020 15:33

Yes . very positive update. They have a good strategy and seem to be executing well. There is a lot going on and a lot to do but I like the plan.
Here are some of the things I noted.
H1 revenue growth of 400%.
Q3 starts with the 'strongest pipeline ever'
Both acquisitions are earnings accretive and strategically offer a lot of opportunity for cross selling.Example. the top 10 companies from Beond could be worth 70m GBP to EAAS!
Breakeven in sight , small operating profit for the full year( EBITDA 800k GBP ).
Customers are much more engaged. the sales cycle have halved to 3 months.
The Beond acquisition seems crucial to driving things forwards. It gives them an operating platform to work from in the 'tackling climate change' space and a loyal and growing client base.
They seem to be pulling together all that is needed to make a serious business. finance ,the people, the branding, a business platform that can deliver energy savings strategies to a clients desktop,greater earnings visability, a growing element of recurring income, loyal customers, and an integrated offering of energy saving services.
eLIGHT app could be a great way of adding sales. This is coming in next year.
They also flag up improving margins and expect to double EBITDA margins from 14% to 28% in due course.
They have 'no capacity constraints' on financing.
They will make more acquisitions in the metering and monitering space to fill out their offering.
Add on services like eHEAT that can be sold to the rapidly expanding client base. Targeting 5000 clients (they have 800 at present).
The CEO says they have a good unfolding market opportunity and are in a 'phenominal position' and that 'we couldn't be more pleased'.

-----------------------------------

They seem well positioned.

[pcok] 16/12/2020 13:19

...and a listen!

[pcok] 16/12/2020 13:18

Good investor presentation today. Worth a look.

[robsy2] 11/12/2020 09:22

Looks sensible. The consultancy is successful anyway and now they have a service to sell.lots os synergy i would think.

[pugugly] 11/12/2020 08:51

Acquisition of Beond Group Limited and placing at 10p - Keen pricing and virtually no pre announcement selling for once

On the surface seems to be a potentially very useful bolt-on - Now to see how well executed.

[scooper72] 03/12/2020 15:55

This is going to sound like a bit of a lazy ignorant post. Bought 2 small tranches of this off of a tip from my brother who knows some bright lad who works in the city. His other tip IPX has done v well over last 10 months for me. Just on Stockopedia this get a value trap rating. Can anyone give me a brief summary of their investment plan price targets for this company over next 12-24 months?

[robsy2] 16/11/2020 17:58

No idea. Depends how things go i guess... How about 20 p by june 2022?

[pugugly] 16/11/2020 08:03

Looking good - Getting new contracts - share price target?

[livewireplus] 06/11/2020 08:55

... in to double figures (10p) for the first time - whilst still quietly 'under the radar' ... onwards & upwards ...

[pugugly] 02/11/2020 21:37

Yes Robsy2 - but why? Highest daily volume for over 3 months - someone wants out at this price - so why? - System and strategy not yet proven in UK - OK sounds very promising but if so, why a volume seller?
Must confess no idea.
Over to you!

[robsy2] 02/11/2020 20:11

Not that many shares Traded. 150k’s worth?maybe the word is getting out that this looks quite interesting?

[pugugly] 02/11/2020 18:18

Looks like price has rised to a level acceptable to a major holder who is starting to unload - Now who is buying - probably too much volume(imo) for MM's to take onto their books - BIG question is "how much more to come"

PLUS as schools staying open during lockdown will it be "Covid safe" to upgrade lighting? Children can carry and shed virus without showing symptoms.

[cheshire man] 27/10/2020 14:06

Nice move up here today :-)

[pugugly] 09/10/2020 16:01

In spite of Robsy2's strong bull points (with which I largely agree) it seems someone or ones do not - based on ADVFN attribution and MM's dropping the bid from 8p to 7p at time of posting.

Message received - either hidden glitches still to be revealed (unlikely after the enthusiastic presentation) or a major holder wants out - If the latter how desperate and how low will he go to unload?

If a lot of stock (say notifiable level plus) then possibly PI's do not have enough firepower to take him/her/it out. If correct possibly further to go down as II's will be looking for a scalpers price.

Guesses?

[robsy2] 06/10/2020 15:53

I liked the presentation and have been buying. Started buying at 6.11 and ended up paying 7.85p for the last lot.

This looks like a very bullish story. Here is my take on it.

I think investors could get very excited about its prospects as the business develops.
News flow will be quite positive over the next 12 months . This will hopefully spur a revaluation.
As they grow, margins should increase from 30% now to 40% and beyond.
They have an experienced management team who look very credible. Encouragingly ,the senior management team have a lot of skin in the game.
The customers they are targeting and selling to ( schools primarily but also others) are financially reliable and do not seem to be hugely affected by COVID.
They are capturing clients and have acquired their main competitor ( RSL) in a fragmented market . The integration has gone well and is already profit accretive.
They plan to add other services like eHeat to their existing customer base. They are proving concept on eHeat now with a client and have high hopes. That could also go well.
They have a clear run at a large addressable market. The CEO describes it as “ a very interesting time”. I agree.




BEAR POINTS

• It is a tiny company with big plans and a low capital base. Things may not work out as planned. They may run into stiff competition, regulatory changes, sudden technical changes, legislative changes etc etc .In short, as always, there are a raft of things that can go wrong…
• Their business model involves them entering into 3,5 and 7 year contracts and selling off the contract payments as receivables to funders like Susi, leaving EAAS to deal with the maintenance and ongoing service . While provision is made for the cost and maintenance and repairs and replacement of faulty equipment, they may get it completely wrong. If so, there will be problems.
• The fact is, they haven’t been through the business cycle with their installations ( the company is only 5 years old), so booking all the profits now is great for cash flow and balance sheet risk reduction, because they offload the risk of non-payment to Susi. This funding model is a key part of how they can expand with such a low capital base. To continue booking high cash profits they need to be constantly entering into long-term contracts to keep things moving forwards. They should book decent profits along the way but project type sales with a long tail of obligations ( considered financially immaterial by the auditors)presents us with some unquantifiable risk. I hope they have made good provisions and that the kit they install is reliable and well maintained.
• It is not clear to me how the project based work they do now can build up long-term value in the busines but in fairness they do have plans to mitigate this by selling on other services( see eHeat above).
• This is a new company with big plans for expansion. They plan to grow organically and also through share based acquisitions . This introduces execution risk and will involve the issuing of lots of new shares . If the acquisitions are not accretive quickly we will see dilution in earnings .
• The directors who have awarded themselves a generous share incentive scheme . This will bring dilution as well but it looks manageable because they have to pay for the shares and they are performance based around the share price , so that should be OK.
• It is a micro-cap, one of the smallest companies I have ever invested in, so we will see volatility in the sails if things go wrong , we will be trapped with illiquid shares that will be very hard to shift. The opposite also applies- if things go well and the broader investing community gets excited, then the share price could get pushed up quite quickly from here.
• The accounts look pretty clean. I did however notice a 1.55m GBP loan relating to buy-out arrangements that costs 13.5% a year to service. This will have to be repaid in 4 years’ time.
• Revenue recognition can be an accounting danger area with contractor type businesses. There is scope for things to go wrong. The revenue recognition here is quite aggressive but without being ( I hope) imprudent. As usual, one relies on the auditors professional duty of care to investors. It is fair to say that this process does not always work perfectly.
• They are up and running but the whole thing is quite new. It is very promising concept, but let’s not kid ourselves, it is still only semi-proven at best.
• The actual service they offer works well, but it is actually slightly more expensive than the customers contracting the required upgrades directly. Their business proposition works well with Public Sector backed organisations and cash strapped schools with Bursars but I would think they may struggle with more hard-nosed, better resourced organisations in the private sector. There could be pricing pressure here.
• To move the business forwards fast, as they plan to do, they need external finance . They have just signed a 15m€ deal with Susi. Susi looks serious and well financed , but they themselves depend on raising investment funds. Fortunately ,the World is awash with money and this type of investment ticks a lot of boxes from Susi’s perspective as environmental investors.
• Susi is Europe’s largest energy efficiency fund and is well funded. It should be noted that were Susi to turn the financing tap off, then EAAS would have to depend on their other finance providers. If they could not do that, then EAAS would deflate quite quickly. There is a plus point here though. We are told that EAAS has a great relationship with Susi ( I kind of laugh every time I type Susi) and that Susi is “interested in expanding that relationship”. EAAS’s CEO revealed that they are in advanced discussions with Susi to get a further 50m GBP line of finance dedicated to educational customers. This would be very significant and just the type of news that would get investors excited.



Trading Update - 1 July 2020 to 11 September 2020

-- 64 installations delivered so far in Q1 FY21 with revenue of GBP4 million, nearly 6 times the comparable quarter of FY20 (250% organic revenue growth)

-- Significant uplift in new business wins and installation momentum, boosted by installation from contracts won before and during lockdown worth over GBP1 million

-- Positive monthly operating EBITDA (before corporate overheads) has continued into Q1 making it five consecutive months

-- Completed first acquisition: Renewable Solutions Lighting Limited ("RSL"), a specialist in providing the UK education sector with fully funded LED lighting solutions

-- Secured new project funding partner SUSI Partners AG ("SUSI"). SUSI has provided a facility of up to EUR15 million to fund LaaS projects in Ireland, giving the Group's Irish business a significantly enhanced competitive advantage.

-- The Board continues to expect to achieve breakeven profit after tax for the Group for the six months to 31 December 2020.

The CEO aims to take the company from a 12-14m GBP turnover to 30m GBP turnover in the next 3 years.


What else do we know?

The house brokers are forecasting turnover rising from 4.5m GBP for the year to 30.06.20, to 12-14m GBP this year,18m GBP for the year to 30.06.22 with the aim of getting to 30m GBP turnover by FY23.

The contracts they are bidding for are getting bigger and bigger. They are now pitching for 3 big contracts that would each be worth between 5-10m GBP. They expect decisions on each of these tenders before 31.12.20. Landing one of those would be a big catalyst.

They reveal that the regular pipeline is worth 20m GBP and they normally convert 40% of that within 120 days. Within 48 days of that they book turnover at a 35% margin. “Do the math” as they say! With central costs currently running at around 1.5m GBP, this could really spike up profitability.

The company they recently acquired RSL, their main competitor. That is running well and they have booked 75% of their target sales for this financial year in the first quarter.

If they get the 50m GBP of funding and add that to the 15m € we can see what they might be able to achieve in the near term .

Funding of 63m GBP of funding converts into sales of 50m GBP and EAAS gross margins of circa 35% = 17.5m GBP.

If we follow the thinking through, it is not quite in the realms of fantasy to imagine them using that 63m GBP facility over the following three financial years. If they do that, and we assume a steep increase in central office costs and some share dilution-say 20% , they could still book distributable profits in the region of 12m GBP. Not bad for a company that currently has a market cap of 12m GBP. Of course this may not happen, but any indications that they are achieving this objective will, I think, cause this share to revalue substantially.

[cheshire man] 04/10/2020 08:38

A very positive presentation IMV leaving me happy to hold,,,,,,unless the story changes of course :-)

[pugugly] 04/10/2020 08:11

Very illiquid - Seems very difficult to deal in any volume - either way - without moving price significantly - OK for the odd 100,000 or so but interest created by Investor Meet Company presentation caused spike in price