Eneraqua Technologies Share Discussion Threads

[tomps2] 17/6/2022 07:01

Eneraqua Technologies #ETP FY22 overview to watch before the investor presentation Monday 20 June 11am

Video:

Very strong results.
Rev +148% £36.2m
EBITDA +319% £5.55m
Cash £3m
FY23 rev orderbook covered at 95%
+ve outlook
Wonderful ESG credentials.

Register for Monday 20 June 11am webinar: [...]

[rivaldo] 15/6/2022 07:46

Good to see ETP attracting some positive attention overnight from Paul Scott on Stockopedia in his Small Cap Value Report - it's been well under most people's radar since IPO, but these results and the prospects should change things:

"ETP – Many thanks to fred9566 who flagged this recent float in the reader comments below, with a synopsis which caught my eye. So I’ve had a quick look at the results, and started reading the AIM Admission Document. That’s going to take hours, so just a quick initial view here.

Its results out today look superb, with a huge rise in revenue amp; profit, beating very ambitious-looking forecasts. The order book is also large, and multi-year, so this looks like more than a one-off bumper year in FY 1/2022 reported today. Balance sheet is OK. The float only diluted existing holders a bit, and was to repay a modest amount of debt. Mark Slater is the only institutional holder over 3%, all the other big shareholders are individuals, looks like mgt. That’s a very good sign, that they didn’t want to sell out (much) on IPO. It seems to be in a sweetspot for heat pump installations. Looks intriguing, and worth a closer look."

[rivaldo] 14/6/2022 12:43

Nice £9,100 buy just reported at 299p - way above the published 290p offer price. Bodes well.

[rivaldo] 14/6/2022 09:27

Finncap have reiterated their 425p target price.

They note that the order book "has increased from £74.4m at the time of the IPO to £91.0m. This together with delivered revenue to date gives 95% cover on forecast revenue for FY23, with strong project flow expected in H2".

Interesting comment too about Spain:

"Water operation has recently seen three contract wins announced: one in India, which is the group’s first Agritech contract and shows significant promise with trials due later this year in Spain".

They conclude:

"Valuation.

The shares offer defensive characteristics in recent weak equity markets and are modestly down on their IPO price. The current value is very attractive, with forecasts confirmed and a strong order book continuing to underwrite growth. Market dynamics highlight Eneraqua’s sweet spot in energy efficiency and decarbonisation with an increasingly attractive water efficiency proposition. We maintain our 425p price target, with the current share price standing on a FY23 P/E of 10.4x, is attractive and offers strong upside as the group scales up and growth is delivered"

[rivaldo] 14/6/2022 08:35

Given today's results and prospects the PI World investor presentation on Monday at 11.00 should be well worth viewing:

[rivaldo] 14/6/2022 07:30

ETP's first post-IPO results to 31st Jan are well ahead of expectations......18.2p adjusted EPS compares very nicely to the 16.8p forecast.

And the maiden 1p dividend has been brought forward from next year as trading has been so good.

ETP now have a £3.9m and rising cash pile which will contribute towards the organic growth and further acquisitions.

But best of all is the outlook, with 25.9p EPS forecast for this year:

"The Group is in a strong position with a healthy balance sheet and a strong order book, which together with FY23 revenue year to date, provides 95% cover for the Board's revenue target for our current financial year."

So total revenues for the coming year are essentially already covered, with ETP on a current year P/E of just 10.4.

The PEG is only 0.19, which is ridiculously good value.

[rivaldo] 10/6/2022 07:09

Excellent news - two water saving/efficiency contract wins with local authorities.

Once you win contracts with these organisations the word spreads around the governmental/local authority circuit, so hopefully many more to come.

Interesting hint too about the need for these products in Europe and globally, particularly given the recent contract win in India:



"Net Water Neutrality Contracts

Water efficiency projects mitigate water stress issues for developers

Eneraqua Technologies plc, a specialist provider of energy and water efficiency solutions, is pleased to announce the award of two English local authority contracts to deliver net water neutrality pilot programmes.

The contracts will see Eneraqua Technologies' subsidiary, Cenergist Ltd, supply and install Control Flow HL2024 systems in existing homes to improve their water efficiency. The water saved will then offset the water used by new homes built in the areas thereby addressing local water stress issues.

The Control Flow HL2024 products have proven water savings of up to 26% in existing homes. This is the first use of Control Flow HL2024 in a net water neutrality program. Water stress already affects many areas in the UK and globally and is expected to worsen with the effects of climate change in the coming years.

Commenting on the awards, Eneraqua Technologies CEO, Mitesh Dhanak, said: "Control Flow HL2024 is a proven product and we are delighted that it has been chosen for these water neutrality programmes. This approach provides a cost-effective solution for new build homes in water stress areas. As well as the UK, water stress affects many areas in Europe and internationally."

[tomps2] 23/5/2022 09:19

Introduction to Eneraqua Technologies (ETP) - May 2022


ETP IPO’d November 2021. They are energy and water efficiency specialists. Through their own IP they support clients replace gas, oil or electric heating systems. They offer a range of communal/district heating solutions utilizing, gas, air-source heat pumps, ground-source heat pumps or hybrid systems. They have achieved a 3 year CAGR of 38% and cash conversion of 80%. Have a very healthy order backlog.
Here, Mitesh Dhanak, CEO and Iain Richardson, CFO outline the business, why they have listed and their strategy going forward, followed by investors questions

Video: www.piworld.co.uk/company-videos/introduction-to-eneraqua-technologies-etp-may-2022/

Podcast: piworld.podbean.com/e/introduction-to-eneraqua-technologies-etp-may-2022/

[rivaldo] 18/5/2022 16:14

ETP design and implement - they're the ones arranging the sub-contracting for others to do the actual fitting out.

The growth drivers re renewables in both divisions, together with the IP in the water division, should ensure growth for many years to come - in the UK and also globally as indicated by the new contract win in India.

[sspurt] 18/5/2022 13:41

A glorified heating and plumbing sub-contractor. Not impressed.

[rivaldo] 18/5/2022 11:44

Cheers Tomps2, will either join the webinar this lunchtime or hopefully find a recording of it.

[tomps2] 10/5/2022 10:31

Reminder: Eneraqua Technologies (ETP) - Introduction webinar

Wednesday, 18 May, 1:00pm

Eneraqua IPO’d November 2021. They help companies work towards Net Zero through their patented technology in their energy and water efficiency divisions. They have achieved a 3 year CAGR of 38% and cash conversion of 80%. They have a £90m orderbook over the next 3 years.

Here, Mitesh Dhanak, CEO and Iain Richardson, CFO will outline the business, why they have listed and their strategy going forward.

Join us here: bit.ly/Introduction_to_ETP

[rivaldo] 05/5/2022 14:33

This news today augurs well:

"As organisations across all sectors have become increasingly driven to reduce carbon impact in recent years, we’ve seen a significant spike in demand for our services and there are no signs that demand is slowing down"



"Cenergist to create 40 jobs after securing £6m HSBC investment package

The Washington energy and water efficiency specialist is also set to use some of the funds to make strategic acquisition
13:46, 5 MAY 2022

A North East specialist energy and water efficiency company is set to create 40 jobs and embark on the acquisition trail after securing a £6m funding package.

Cenergist, which is based in Washington, Tyne and Wear, works with local authorities, water utilities and energy companies to reduce the carbon impact of buildings by providing water efficiency and renewable heating systems.

Launched 10 years ago, Cenergist provides water efficiency and renewable heating systems, with its patented technology helping to drive more efficient water and energy use, as well as helping organisations meet sustainability goals, reduce costs and comply with regulations.

The business, which provides design and install services across the UK and in Europe, has now secured the multimillion-pound package from HSBC UK to increase working capital for bigger projects, while looking to grow through acquisitions.

The package will provide the capital it needs to complete large-scale pieces of work, and give it the flexibility to target strategic acquisitions.

The funding will also enable Cenergist to create at least 40 new jobs in the North East, Leeds and London across business development, project management, tenant liaison, site management and finance as the company delivers these significant pieces of work.

Iain Richardson, CFO at Cenergist, said: “Primarily, we support clients to meet their Net Zero and sustainability goals.

“This includes building owners that are upgrading their heating and hot water systems as well as commercial clients such as hotels and water utilities seeking to reduce water wastage. As organisations across all sectors have become increasingly driven to reduce carbon impact in recent years, we’ve seen a significant spike in demand for our services and there are no signs that demand is slowing down.

“This financial support from HSBC UK will ensure we can help as many customers as possible reach their environmental targets, both within the UK and European markets.”

Rachael Guest, relationship director at HSBC UK, added: “Cenergist is making a real difference to the environmental impact of buildings across the UK and into Europe. We’re delighted to provide the business with funding to support its continued growth and create jobs as more and more commercial property owners invest in decarbonisation.”

[tomps2] 04/5/2022 08:50

Eneraqua Technologies (ETP) - Introduction webinar

Wednesday, 18 May, 1:00pm

Eneraqua IPO’d November 2021. They help companies work towards Net Zero through their patented technology in their energy and water efficiency divisions. They have achieved a 3 year CAGR of 38% and cash conversion of 80%. They have a £90m orderbook over the next 3 years.

Here, Mitesh Dhanak, CEO and Iain Richardson, CFO will outline the business, why they have listed and their strategy going forward.

Join us here: bit.ly/Introduction_to_ETP

[rivaldo] 04/5/2022 07:11

Good to see ETP starting to spread the word post-IPO with a presentation available for all investors on 18th May. Hopefully a sign that the business is continuing to thrive after March's positive trading update:

[rivaldo] 03/5/2022 08:40

Finncap today reiterate their 425p target and 25.9p EPS forecast for this year to Jan'23:

Extracts:

"First contract win in Agritech

The group has announced its first contract win in the Agritech sector with a contract in India valued at £0.9m, scheduled to start in the current year and complete in 2023. This is a welcome contract win that broadens the group’s revenue base to a new end-user base and a new geography. The contract will enable the efficient management of water usage that will help farmers to conserve water, improve crop yield and prevent soil erosion, and should provide an attractive template for other states in India. No change to forecasts, but today’s announcement is encouraging and further underwrites our forecasts, given they are already significantly supported by the current order book. We also maintain our 425p price target, with the shares trading at very attractive levels."

"Valuation. We maintain our existing price target of 425p, which offers significant upside to the current attractive valuation, with the shares trading on a FY23 P/E of 9.8x, following some recent drift in the share price. We welcome today’s news, which should be reflected positively in the share price."

[rivaldo] 03/5/2022 07:16

New £0.9m contract win in India - great to see ETP building their overseas business.

ETP will "deliver a package of water, energy and soil conservation solutions which integrates the Company's patented technology Control Flow HL2024" to 340 horticultural farms in a single state, "reducing their carbon emissions and improving water efficiency. This is the first major zero carbon irrigation initiative of its kind in India."

Imagine the potential for this across India:



Extract:

"The programme, which is scheduled to start in 2022 and complete in 2023, will see Eneraqua Technologies' India subsidiary, Cenergist Energy Private Ltd, deliver a package of water, energy and soil conservation solutions which integrates the Company's patented technology Control Flow HL2024. By efficiently managing water usage, this will help farmers to conserve water, improve crop yield and prevent soil erosion. Solar PV is used to power the irrigation systems.

The project in Uttarakhand represents an important step towards the decarbonisation of the agriculture sector and provides a template for other states in India and beyond.

Eneraqua Technologies is committed to helping its clients meet their decarbonisation and net-zero targets through its patented technologies. As a specialist in this area, the Group can help organisations achieve their climate change goals in a low-cost and sustainable manner.

Commenting on the contract win, Eneraqua Technologies CEO, Mitesh Dhanak, said: "We are delighted to be chosen by the State Government of Uttarakhand to support them in delivering this important programme. As well as reducing carbon emissions, this programme will also reduce pressure on water resources and improve the incomes of farmers. This offers an attractive template for other states looking to decarbonise the agricultural sector while meeting the challenges of sustainability."

[rivaldo] 24/4/2022 07:42

Amati AIM VCT have just issued their Spring newsletter. They invested pre-IPO in ETP and profile the company in the newsletter - interestingly the m/cap here is now almost at their pre-IPO m/cap:



"Amati AIM VCT invested in Eneraqua Technologies at its IPO in November
2021. The company designs and implements energy and water systems for
large buildings in both the public and private sectors. Projects involve advising
clients on decarbonisation and water efficiency through the replacement of
legacy gas, oil, or electric heating. Eneraqua is currently working with three UK
utilities, and 28 local authorities and housing associations, and has also
completed student accommodation projects for Sodexo plus Spanish hotels
and care homes.

Eneraqua has two complementary operations covering energy systems and water systems, with the latter involving a patented/EU accredited device, the HL2024, which overcomes variable mains pressure to provide constant water flow. This technology was developed by a partner, HGP, which was acquired as part of the IPO. HL2024 reduces water consumption, which in turn reduces heating requirements and the scale and cost of energy systems - 25% savings in one case study. This provides cross-selling synergies between the company’s operations.

The energy business dominates revenues currently, involving the replacement of low efficiency systems, such as end-of-life gas and electric night storage, with low carbon heat pumps. The growth potential in the water business from cross-synergies means that its revenues are likely to match energy in future. There is also potential within agricultural applications, and a pilot project is underway.

Eneraqua can do both Air Source ("ASHP") and Ground Source ("GSHP") Heat
Pumps. They prefer the latter because the projects they are involved with tend
to have sufficient land space to allow drill holes or horizontal piping arrays, and
GSHPs have the benefit of more constant temperatures than ASHPs. Prior to
investment, Amati visited two projects in Leeds which showcased both types of
pump. This involved an ASHP system for a large leisure centre, and a GSHP
system for two social housing tower blocks, both for Leeds City Council.
Currently only 1% of annual UK heating installations are heat pumps, and these
are mainly ASHPs. The government wants heat pump installations to grow to
600k pa by 2028. Eneraqua isn’t involved in private household installations,
focusing instead on the public sector where adoption is proving faster and
where sizeable finance is already available, such as with the £1bn Public Sector
Decarbonisation Fund.

With strong customer relationships and the competitive advantages from
HL2024, Eneraqua is winning over 50% of recent project tenders. Revenues
are regulatory or government driven, with local authorities required to upgrade
social housing and municipal buildings. Policy drivers include decarbonisation,
water efficiency and fuel poverty, all of which have high ESG credentials.

Amati invested at a pre-IPO valuation of £80m, which equated to a prospective
after-tax profit multiple of 16x for the financial year to January 2022, falling to
9x for 2023. This is attractive for a company with contracted revenues of more
than £40m, and secured revenues (where tenders have already been won) of
more than £50m over the next two and a half years. After the IPO, the founder
CEO continued to own 20% of the company.

Although still an early-stage company, Eneraqua has potentially significant
growth opportunities across a range of energy transition markets involving
housing, leisure and agriculture, both in the UK and internationally."

[rivaldo] 22/4/2022 11:26

ETP's water control technology is proprietory and patented, and underpins both the Energy and Water segments.

In particular, the Water division is expected to grow rapidly and catch up with the revenues generated from the Energy division.

ETP are already working with three UK water companies and 28 local authorities and housing associations. It's widely accepted that once companies achieve success in these areas then it's highly likely they'll continue to win business from other local authorities etc as their solutions become more widely known and accepted.

Slater was happy to invest £4.7m in 5% of ETP at the 277p IPO price. The markets have been uncertain ever since the IPO, but I'm happy to back Slater and what I've seen of ETP to date - especially given that they've already confirmed they'll meet forecasts for last year and have started this year trading well.

[simon gordon] 21/4/2022 15:21

Hi Rivaldo,

Maybe they'll get a good run with government contracts but as the competition heats up how will they protect their high margins? They have a bit of IP but by the looks of it it's not crucial to the contract in Leeds. Won't other support services contractors muscle in on the scene and thus margins drop, it's not like they are offering a unique piece of software, they are sub contractors themselves. One potential landmine is that they have to go out and get the grants for their clients from the government, this could mean lumpy contract awards and forecasts being volatile.

Maybe they'll get lucky and get a few good years but I don't see anything outstanding bar heat pump spend has helped them move from £0.6m to £10.6m in a few years.

Maybe the rating is low for a reason, in that they are unproven and their destiny is in the hands of government grants.

[rivaldo] 21/4/2022 14:09

We now know from the year end trading update that ETP have traded nicely in line with expectations for the year to Jan'22, that they have strong order books and that trading in this current year has "started well".

The prelims in June should therefore be a good read.

Finncap have a 425p target.

ETP's recent trading record is as follows:

y/e 31/1/20 : £0.6m PBT
y/e 31/1/21 : £0.8m PBT, 3.2p EPS
y/e 31/1/22 : £5.6m PBT, 16.8p EPS
y/e 31/1/23 : £10.6m PBT, 25.9p EPS (forecast)

With both domestic and international growth targeted, ESG is a strong tailwind for ETP for the coming years, be it government and/or privately funded.

Any company providing the kind of growth shown above should be on much higher than a current year P/E of just 9.5.

Especially with a £3.8m net cash pile forecast to rise to £13.4m by next January.

It's worth noting that the CEO owns almost 20% of the shares, with an NED owning another 12.4%.

It's also reassuring to see Mark Slater on the share register with a substantial holding (over 5%).

[simon gordon] 14/4/2022 09:21

Bought some of these to focus my mind and then sold after weighing up the pros and cons. Seems that Cenergist was plodding along until the government started funding for Net Zero, in particular heat pumps. Prior to that the company was a plodder. This has given them the chance to IPO and ride the coat tails of government largesse. Some of the top team are from EAGA who floated when government spending went up for Warmfront, started around 200p, hit 50p and was taken out for c.100p. Problem for these types of businesses is that their destiny is not in their own hands, they are subbies to the government. They deserve to be on a low rating because so many have come and floundered on the market.

[rivaldo] 13/4/2022 10:46

On a down day for the markets yesterday, just a few sales in this very tightly held, illiquid stock caused the MMs to take advantage of those sellers and drop the price crazily.

I suspect this is now very cheap indeed given Finncap's 25.9p EPS forecast for the current year.

Amati AIM VCT released their Annual Report this morning. In their commentary they note their investment in ETP's IPO and summarise:

"The remaining two IPOs were in buildings related products - and services which are coming to the fore for environmental reasons; we invested £0.75m in Zenova in July and £1.95m in Eneraqua in November.....

....Eneraqua designs and installs energy and water systems for large buildings in both the public and private sectors, involving ground and air source heat pumps. It has a patented device which overcomes variable mains pressure to provide constant water flow. This reduces water consumption which in turn reduces heating requirements and system costs. It is working with three utility companies and 28 local authorities and housing associations, on both new and replacement systems."

[rivaldo] 06/4/2022 13:36

ETP's subsidiary Cenergist has a large contract with Leeds City Council to install solar panels, heat pumps etc.

It seems from this report a few days ago that the contract is going well:



"Green upgrade project hits half-way mark in Leeds
30th March 2022

Work to spend more than £25m on green upgrades across 40 public buildings in Leeds has hit a significant milestone with confirmation that installation work is finished at more than half of the sites – with almost 30 jobs created.

Eight leisure centres, twelve primary schools, four homes for older people, two popular attractions, four civic buildings, a children’s centre, a community hub, and six other council-owned buildings across the city are all receiving upgrades....

More than 7,500 solar photovoltaic panels are being installed as part of the programme. The panels mean that dozens of council buildings will soon become part—or on good days fully—powered by local renewable electricity, helping to reduce the council’s reliance on increasingly expensive and less clean energy imported from the national networks.

61 new heat pumps and four new connections to the low carbon Leeds PIPES district heating network will also reduce the council’s use of gas combustion boilers, helping the authority save money and improve local air quality.

Leeds City Council bid for the funding last year as part of the ‘Public Sector Decarbonisation Scheme’ from the Department for Business, Energy and Industrial Strategy.....

“It is really pleasing to see the progress being made across the city through the Public Sector Decarbonisation Scheme and I look forward to seeing the schemes impact on tackling the climate emergency.”