Energy Assets Share Discussion Threads

[gargleblaster] 13/11/2014 11:49

Thanks Riv - looks like bolt-ons definitely in the pipeline. Interesting that the CFO actually worked on M&A. Sounds like the right man in the right place!

[rivaldo] 13/11/2014 09:54

Further acquisition hints from the CEO:



"Energy Assets : seeking more deals after a surge in first-half earnings
11/12/2014 | 07:15am US/Eastern

Acquisitive gas meter supplier Energy Assets is on the hunt for more takeover targets after revealing a 30 per cent jump in earnings for the first half.The Livingston-based firm - which last month snapped up a data capture and analysis company in Chesterfield for GBP850,000 - said it wants to grow its market share across the gas and electricity sectors "both organically and by acquisition".

Chief executive Philip Bellamy-Lee told The Scotsman: "There are a lot of niche players out there in the market that could be valuable for us, and there are opportunities in both gas and electricity for adding more contract wins."Energy Assets employs more than 150 people, of whom about 75 are based at its headquarters in Livingston. The firm, which floated in 2012, recently expanded its office to add space for a further 25 staff.

Results published yesterday showed pre-tax profits before one-off items swelled to GBP3.9 million in the six months to 30 September, up from GBP3m a year earlier, with total revenues soaring 43 per cent to GBP16.9m.Bellamy-Lee said the firm, which counts British Gas and Npower among its clients, would remain focused on the industrial and commercial sectors, and did not want to get "diverted" by pursuing the domestic market.He added: "The second half of the financial year has started well and the group's major contracts continue to perform strongly.""

[rivaldo] 13/11/2014 06:53

Good stuff here - looks like more acquisitions are on the way. Interesting too to see speculation about a merger with SMS:



"Energy Assets : prepared to use pound(s)5m to fund acquisitions
11/12/2014 | 06:49am US/Eastern

THE chief financial officer of Energy Assets has underlined the meter specialist's appetite for acquisitions and said the firm could use all of a new pound(s)5 million credit facility to fund deals.

John McMorrow said Livingston-based Energy Assets is on the lookout for further purchases as the company feels the benefit of two takeovers completed in recent months.

He said the company wants to grow its 7 per cent share of the market for providing smart gas and electricity meters to business users after growing first half profits by 30 per cent.

Asked if Energy Assets should merge with Glasgow-based rival Smart Metering Systems, Mr McMorrow said he could not comment.

Mr McMorrow, who worked on mergers and acquisitions during his time at Sir David Murray's business empire, reiterated Energy Assets' view there is plenty of space in the market for both Scottish firms to prosper.

"There are still significant opportunities for both of us to grow," said Mr McMorrow. He noted the two firms had won equal shares of a big contract to install meters for British Gas' business customers awarded by the giant utility in July.

Energy Assets achieved strong growth in the first half, helped by increasing demand for smart meters amid official efforts to reduce carbon emissions.

All industrial and domestic gas meters must be smart or advanced by 2020.

The company, which listed on the London Stock Exchange in 2012, increased profit before tax and exceptional items to pound(s)3.9m in the six months to September 30, compared with pound(s)3.0m in the same period last year.

Total revenue increased by 43 per cent to pound(s)16.9m, from pound(s)11.8m.

The company doubled its portfolio of owned and managed meters to 334,500, from 163,500 at March 31.

It also took over 154,500 electricity meters through the acquisition of Lancashire-based BGlobal Metering for pound(s)2.3m in April.

Mr McMorrow said the intregation process has gone well.

The acquisition of Cheshire-based Origin for pound(s)0.8m in October, after the period end, gave Energy Assets greater control of some of the technology it provides to clients.

In addition to providing meters, Energy Assets offers services such as automated meter readings that clients can use to help manage their energy consumption.

Mr McMorrow said while the company sees big opportunities to achieve organic growth it is always looking at potential acquisitions.

Noting the company recently secured a pound(s)5m facility from Santander bank, Mr McMorrow said: "Should we see any targets it will give us immediate access to funds."

He said the company could use all of the facility for acquisitions.

With pound(s)5.1m cash at September 30 and pound(s)33.5m undrawn facilities with other lenders, the company has around pound(s)44m funding in place.

The company said the underlying business has performed well since the period end and it remains confident of winning new work with major utility suppliers.

Chief executive Phil Bellamy Lee said factors such as strong supply chain relationships, engineering competence, the experience of the company's management team and the opportunities arising from Government regulatory requirements put the firm in a strong position to deliver on its long term growth strategy.

Steve Woolf, an analyst at Energy Assets' broker Numis Securities, forecast the company will increase profit before tax to pound(s)9.2m in the current financial year, from pound(s)6.7m in the 12 months to March."

[aishah] 11/11/2014 22:44

SCSW sister publication TMI put me in below £2.50 a year and a half ago. Lots more to come here imo. Please dyor.

[saj3] 11/11/2014 20:14

Thanks fireman

[fireman bob] 11/11/2014 19:52

Riv,
Great results from EAS this morning, changed jobs recently and not had a chance to keep up to speed with things so delighted to see the positive release this morning, judging by the share price action there's no pleasing some folk ;-) Plenty growth to look forward to here yet.
saj3 - you could do worse than read the Zulu Principle by Jim Slater (also an advfn thread), you'll find good info in there and more good posters like rivaldo on the BB thread "zulu"
Cheers
FB

[saj3] 11/11/2014 19:40

Tech - I have read Robbie's book and must its an amazing book and so is Robbie. Just wanted to have something extra to understand companies, I mean he gives it a passing glance and still manages to make massive amounts so like he says I want to keep it simple but just wanted something extra in the tool box.

[baxter99] 11/11/2014 17:13

and then read Jon Nofsinger's "Psychology of Investing" - it explains why many investors lose money

[technocat] 11/11/2014 17:00

saj3

For a new investor I really recommend 'The Naked Trader'. I have been trading shares for many years but still picked up tips from this book.

[gargleblaster] 11/11/2014 16:24

Hot off the presses

Energy Assets (EAS), which offers smart gas-metering services to the commercial sector, reported further robust progress at the half-year stage. Adjusted pre-tax profit increased 30 per cent year on year to £3.9m, helped by acquisitions and the impact of significant new contract wins.

April's acquisition of BGlobal metering helped more than double the group's portfolio of metering assets to 334,500. That deal added 150,000 meters, with the remainder reflecting organic growth. Significantly, the group also signed a contract with British Gas in July to install half its planned smart meters between now and 2020. Other wins included a data-collection contract with Npower, signed last month. This is all great news for recurring revenue prospects, though these are already growing strongly - by 39 per cent to £11m during the first half.

True, Energy Assets' borrowings continue to mount as the group grows: the net debt pile rose 15 per cent year on year to £58.7m. But management isn't too worried, pointing to the group's growing ability to throw off cash; cash generated from operations increased by a quarter to £8m.

Broker Numis Securities expects full-year pre-tax profit of £9.2m, giving EPS of 26.3p (from £6.7m and 18.8p in 2014).


IC view:
Energy Assets is benefiting from a shift towards smart metering, sparked by government policy, which should drive strong demand for years to come. A forward PE ratio of 18 looks reasonable when set against forecast earnings growth of more than 170 per cent in the three years to end-2016. We reiterate our buy tip (343p, 19 June 2014). Buy.

[saj3] 11/11/2014 16:21

Riv - can you recommend any books?

[rivaldo] 11/11/2014 16:14

I do rate SCSW. However saj3, if you need to ask what P/E ratios and EPS are then I seriously suggest you go away and read some books on investing before you risk any of your hard-earned dosh!

[saj3] 11/11/2014 14:42

Rivaldo - I think I may consider subscribing to SCSW myself as a few investors have done it. Looks pretty decent. Where did you learn how to interpret P/E ratios and eps etc i see you talk about it quite a lot. It all seems very confusing to me?

[rivaldo] 11/11/2014 14:34

Saj3, I subscribe only to SCSW (Small Company Share Watch), but XLM and CMS of those I mentioned are the only ones featured by that magazine - the rest I've found by myself and researched as best I can.

[saj3] 11/11/2014 14:00

Rivaldo - do subscribe do any tip sheet or do you find all companies on your own, still pretty new to this so trying to learn from some of you experienced investors.

[rivaldo] 11/11/2014 13:44

Cheers maiken, I agree about the scope for further forecast upgrades. I haven't got the Macquarie numbers I'm afraid.

Appreciated saj3! I also have failures like anyone else, for example GNG, which I still believe in and with luck will rise hugely from the current level at some point, perhaps in the next 6 months to a year.

Of those stocks in my portfolio which haven't risen yet or have retreated from highs, some ideas are BVM, XLM, NTQ, HVN, CMS (who were very confident at Mello last week), BRY, PEG and ALK.

[saj3] 11/11/2014 12:24

Rivaldo - what else do you own in your portfolio, you tend to be in the good ones!

[maiken] 11/11/2014 11:50

Having spoken to PR people Buchanan,not company....
Numis forecasts as before at 26.3p[may be fractionally up....well done Rivaldo],sales 35.3m,pbt 9.2m

Next yr to 2016,sales 40.9m,pbt 10.5m and eps 29.5p.

IMHO plenty of cope for upgrades to the 2016 numbers in due course

If anyone can get the forecasts from other brokers Macquarie i would be grateful.I believe they are forecasting a divi in 2016.Numis are not !

[rivaldo] 11/11/2014 09:12

Interested to hear any feedback maiken (good to see someone being proactive!).

However, if anything I think forecasts will remain as they are or may even be increased.

EAS achieved 43% of the full year forecast in H1, which in itself is pretty respectable. Given that EAS is growing so fast, that alone should support the full year forecast imo, but there are a number of other reasons for optimism for this year:

- acquisition of BGlobal Metering at the end of April
- the British Gas contract won in July
- the continuing growth in the managed asset portfolio
- the £1m Pirbright contract commencing in late 2014
- the new npower agreement signed last month

All of these should benefit H2 to some extent more than in H1.

[maiken] 11/11/2014 08:55

whilst I remain a happy long term holder i would say the results ,on first reading,do not look great RELATIVE TO BROKER FORECASTS for full year earnings.
A simple extrapolation of earnings growth in the 1st half suggest to me the house broker might be reducing his current full year forecast which i believe is 26p.
i will ring the company and if i get any interesting feedback I will happily share.
Meantime i can understand if there is some profit taking.

[rivaldo] 11/11/2014 07:21

Hello again mate - there are only so many good stocks to go around :o))

The interims are....today! And they're terrific:



- looking good for meeting or beating forecasts
- huge recurring income
- very strong start to H2
- expansion into other sectors

Excellent stuff.

[gargleblaster] 10/11/2014 23:27

Riv - keep bumping into you - great minds think alike perhaps!!

I have been in these for a while and they look like a good long-termer to me. I like the fact that since March 2012 there have been 10 director buys (not massive mind) but no sells.

Following the recent contract win, the current share price is some way above the trend line so could be vulnerable short term.

Anyone know when the interims are?

[rivaldo] 09/11/2014 19:13

More institutional buying - Friday's RNS showed Old Mutual going above 10% to 2.77m shares:

[rivaldo] 04/11/2014 07:32

More good news - a further £5m funding facility, hinting at further acquisitions to come (and aiding organic growth):