Fulcrum Utility Services... Share Discussion Threads

[malcolmmm] 04/4/2018 15:48

UP and away

A trip of share recommendations from the tipsters at the Sunday Times, Sunday Telegraph and Mail on Sunday.
Fulcrum Utility Services was a 'buy' for the Sunday Times' Inside the City column. The electricity and gas infrastructure and services provider, which IPOed on AIM eight years ago after being spun out of National Grid, was tipped as a potential beneficiary of the rise of electric vehicles, though far from the glamorous end of the scale. Electric cars will rely on an infrastructure backbone that is currently "clearly not up to the job" and this could "turbocharge" Fulcrum.

Fulcrum's owns and installs power cables and gas pipes for residential and business, with its own assets generating returns over decades. Client jobs include connecting housing estates up to the grid for housebuilders, connecting remote Highland whisky distilleries and a future area could be smart meters. Fulcrum's portfolio of utility assets is worth £13m and churned off £2.1m cash in the six months to end-September, allowing the paying of dividends that see its shares yield about 3.4%. The attraction of using cheap debt to build assets that pay double-digit returns has seen Fulcrum agree a new £20m debt facility.

Targeting the electric car charging market, Fulcrum recently spent £22m acquiring a business that specialises in electrical connections and has an electrical licence from the power watchdog Ofgem. A partnership has also been signed with US-based Chargepoint to instal its electric-charging

[watcher13] 03/4/2018 16:21

ivan, im not sure you are reading the numbers right, I checked the last rns and the order book is £38m. the book of £13m referred to in the article is the assets owned which I think will generate income for 20 or 30 years perhaps at 10% or more and possibly index linked. that sort of income stream is very valuable

[davr0s] 03/4/2018 16:20

Doesn't matter what people think - it's what the price is doing and that's going up

[ivancampo] 03/4/2018 13:00

Smoke and mirrors continue, forward order book disappointing. Value £130m ???

[watcher13] 01/4/2018 13:54

KoP well-spotted, really good write-up as well

[kop202] 01/4/2018 10:21

Tipped in the Sunday Times today

[tradewithtrend] 01/4/2018 07:42

https://www.thetimes.co.uk/edition/business/fulcrum-plugged-in-to-electric-car-boom-gcpts6992

[gilgil13] 29/3/2018 09:33

Hi,

I am looking to invest here and had a few questions - wonder if anyone who has been around longer can answer them:

1. Is the reason its margins are higher than other construction/contractor type business due to the complicated nature and technical aspects of the work it does? Are there any risks to these? e.g. from competition undercutting etc. Or are the margins different for smaller contracts/customers vs. more sophisticated ones like BG?

2. Does anyone have a figure for customer concentration? It is mentioned a few times in annual reports etc. but I could not find a %. Bit worried if say they fall out with British Gas - would that have a big impact? And as current ratio is quite poor then a drop off in contracts coming in could potentially stop them being able to fund existing contracts.

3. The case studies it publishes show it building and then owning the pipelines/meters with a value attached. Does it generally own all or most of the pipelines it builds (or at least is that the plan from now on) or does it just highlight these in its case studies as the most attractive ones? When they state a contract is worth £xm and they will then own the pipes once built - do they get paid to build them and then also get ownership or do they forego payment to build in exchange for ownership?

Thanks in advance

[solarno lopez] 06/2/2018 06:29

Thanks Topvest

[topvest] 05/2/2018 19:29

No it’s nothing like that. It’s a specialist gas (and soon electrical connections) company. Customer base is diversified and jobs are typically about 6 months in length. It was part of National Grid originally and Transco before that. It gets paid about 30% up front before any work starts. There are quite a few barriers to entry in what they do and particularly on the pipeline side.

[solarno lopez] 05/2/2018 08:31

Should I assume that like me no one else knows exactly what the company does ?

[solarno lopez] 02/2/2018 12:51

Forgive my ignorance but having done some research I could not fathom whether this is a similar out sourcing operation similar to the likes of Carillion etc but in electricity an gas

Can someone help please ?

[topvest] 02/2/2018 11:21

The accounts for The Dunamis Group Limited look encouraging. Its basically a £10m Turnover £1m+ profit business (excluding goodwill amortisation. Looks cash generative with lots of cash and deferred income. Perfect match for Fulcrum. Think this is a transformational deal. I don't generally like acquisitions, but this one has a lot of logic and is sensible.

[topvest] 02/2/2018 11:00

Yes, looks a very good deal on the face of it so they become a market leader on gas and electricity. Will take a look at the accounts of the company being acquired.

[ramridge] 02/2/2018 08:18

This looks like a substantial acquisition at a very reasonable price

"For the 6 months ended 31 October 2017, Dunamis achieved unaudited revenues of £10.2 million and EBITDA of £1.8 million "

FCRM's 2018 FY figures are estimated to be £40m revenues and £8m EBITDA

So the acquisition adds approx. 50% to revenues and 45% to EBITDA

They are paying £22m ; P/S = 1.1 ; EV/ EBITDA = 6

Very reasonable. Placing discount was only around 1%

I took a long position this morning

[penpont] 02/2/2018 08:04

Looks good, placing price reasonable and:

'The Acquisition is expected to be significantly accretive to underlying earnings per share in the first full year following Completion'

[ivancampo] 22/1/2018 09:53

I meant unlisted regional businesses which are not valued as highly. How do you justify the valuation? Not trying to be awkward as have been invested here previously I just don't get the valuation.

[solarno lopez] 15/1/2018 06:42

Ivan you were asked to provide a list of Fulcrums peers in post 211 way back in October so far you have failed to do that.

Which brings into question the quality of your postings !

[ivancampo] 06/12/2017 10:23

Why is the market cap at £115m if turnover is only circa £40m and hardly growing aggressively, likewise profit? Seems very difficult to justify a higher valuation to me.

[bus_ter] 05/12/2017 22:21

This has been a great share to date. A little disappointed there wasn't a bigger rise on today's interim results, but it's a slow burner. I'm hoping for long continued steady growth. One to hold for the medium to long term.

[topvest] 05/12/2017 18:57

All looks positive. Happy to hold.

[buying] 05/12/2017 10:54

Like the fact they are getting involved i electric vehicle chargingAfter successfully providing electricity connections for a number of Electric Vehicle (EV) charging projects, the Company is now expanding its service offering to provide an end-to-end EV charging infrastructure solution. This holistic service includes the supply and installation of EV charging stations in addition to designing, constructing and owning the electricity infrastructure required to power them. The Company sees this as an evolution of its existing electricity infrastructure provision in an exciting and growing market, which will be further bolstered by the 2017 budget announcement of a GBGreat set of results and a divi increase

[buying] 08/11/2017 13:05

Every bit of news from this company tends to be good