The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Eqtec revenue forecasts vs (ITM revenue forecasts)
2020 2.4m (3.29m?)
2021 15.5m (6m)
2022 55.6m (30m)
2023 118.5m (80m)
2024 109m (143m)
2025 no data (246m)
ITM currently classed as underweight by both Barclays and Morgen Stanley with 800p and 600p targets (490p S.P today)
https://www.lse.co.uk/news/ITM/morgan-stanley-sees-itm-power-sales-growing-at-70-cagr-over-decade-to-2030-c3ul8vwfulcvlah.html
(ITM)"For the decade ending in 2030, the analysts projected compound annual rates of revenue growth of 35% and 70% - admittedly from a low base - for NEL and ITM Power, respectively."
Now lets calculate sales CAGR for Eqtec
2020 2.4m
2021 15.5m = 545% CAGR
2022 55.6m = 258% CAGR
2023 118.5m = 113% CAGR
So Eqtec have the bigger pipeline, higher CAGR for the next few years, and have not yet made the big partnership deals to advance progress.
EQTEC market cap = £143m
ITM market cap = £2.73b
I would say Eqtec are on track to reach £1b market cap quicker than ITM can reach £10b. For me there is more growth potential for Eqtec in the short and medium terms.
In line with recent expectations, we are modelling for profitability by the end of the
year on a total revenue more than €15m for 2021. These revenues derive from
existing projects, project starts (i.e immediately post financial close), maintenance and
consulting contracts as well as returns from EQTEC Capital.
-Revenue 2020 2.5m
Revenue 2021 15m
-Revenue 2022 55m
EPC contract being negotiated behind the scenes and will likely lead to a large JV / cooperation deal
Pipeline of over £500m last announcement has likely grown in the last few months and will be updated if the 2020 full year financials are announced this month as communicated last month in the latest operational update.
EQT in the unique position for a small cap green energy company of entering their first year of profitability with larger gains in revenue forecast than most of the others and a pipeline the envy of multi billion £ companies.
Not sure what payment that is you are referring? Are you seeing this as a figure on a future estimated finances table somewhere?
The large UK plants being built are the first of their size and should they perform as the data suggests, expect orders to flood in from around the world as the go to clean tech to reduce waste and power future demand for hydrogen and electricity.
Thanks for all the info, was just trying to work out what projects we currently have, what our commitments are and expected timeframes.
With regards to the accounts I was asking about the 15m goodwill entry ( just forgot to type that bit) is this where we have done certain leg work based on possible deals?
I understand covid has set us back but like to do a timeframe of where businesses expect to be and see if we hit the goals. I love spreadsheet ??
If this link is entered into the google search on a desktop computer using Crome I think but others may work, there should be an option to browse to the cached site
https://www.endswasteandbioenergy.com/article/1663609/eqtec-extends-mou-billingham-efw-plant
Near the top of the page the railway link for Billingham is mentioned as being a competitive advantage.
Re Billingham, from the February RNS:
Further information about the Project
This announcement follows a number of updates made by the Company in respect of the Project, most recently, as announced on 27 January 2021, when a resolution was received from Stockton-on-Tees Borough Council to grant planning approval for an improved scheme. The scheme was proposed by the Company in order to reduce the environmental impact of the Project and improve its commercial outcome.
- could this be the building of a railway siding? This would reduce the environmental impact and allow RDF to be shipped in from further afield.
Notice on the images how there are areas for future expansion, and how the Eqtec plants are modular in design meaning they can be expanded if required in the future. This area is also soon to become a Freeport I believe?
https://www.theguardian.com/uk-news/2021/mar/03/eight-free-ports-low-tax-zones-created-england
Hi Rsmithy.
This is probably the most comprehensive and up to date report out at the moment https://drive.google.com/file/d/1TOhJeBd2ku1Pw6hn-oB6k-8IwtwhJg0O/view?usp=drivesdk
Do we find the sites or do we get approached?
- most of the pipeline has come to us through our main framework partnerships in various regions around the world. These partnerships mean the initial due diligence has already been done then Eqtec can carry out further checks ensuring that only the most suitable projects become part of the growing pipeline meaning most projects in the pipeline are likely to advance to financial closure and construction.
Can we do all stages from design to build to maintenance
-we set up finance, do permits, design and maintain mostly. It is third party Engineering procurement and construction (EPC) such as woodgroup or Engie which build projects. Announcement of a chosen EPC for some of the larger projects is currently awaited.
If we build is this why we loan funds with sort return dates as payment due on completion.
-Development costs need to be first met by Eqtec to speed up projects towards financial closure. Once this has been done the first time in a country and EPC contractors are lined up, future projects will reach financial closure more quickly as the template will be in place as is happening in Greece.
slide 14 https://ukinvestormagazine.co.uk/wp-content/uploads/2020/05/EQTEC-Deck-May-2020-v6-UK-IM-Present-E.pdf?mc_cid=c38fcfbd0e&mc_eid=af0e5c1880
Is the 15m I’d accounts where we are at certain stages with project but no actual build?
-The €15m revenue forecast for 2021 you mean? This will come from upfront payments for financial closures on projects mostly, revenue to Eqtec is 35-40% of project capex and 40% of that revenue is paid on the first milestone payment called financial closure.
What is our average length of project?
-From financial closure, it takes between 15 to 36 months depending on the size of the project. I suspect this timeframe will come down in time as synergies are created and lessons learned are fed onto future projects.
£10m cash raise completed last July.
This compliments ongoing revenue earned from different stages of plant design, construction as well as maintenance and operation fees which are continually being generated from already installed power plants. Best guess is there is over €5m free cash in the bank right now. Full yearly accounts due in April as announced in latest operational update.
€15.5m revenue (€3.5m profit) expected in 2021. 2021 is expected to be the first year of profit and with a fraction of the marketcap of likes of ITM or CWR. ITM will not be in profit for a few years yet.
ii very bullish on EQT:
https://www.ii.co.uk/analysis-commentary/how-alternative-energy-beat-oil-and-gas-aim-2020-ii514770
News just released that the court case for patent infringement in the USA has been thrown out, as agreed by all parties in a motion to desist with prejudice, meaning no further case can be filed in this matter. The platif, Aries Clean Energy claimed patent infringement against EQT which was an opportunistic lawsuit with little merit due to EQT having prior art and historic use of gasifiers pre-dating the patent filing.
News due following a technology review and "potential future collaboration" with woodgroup who are installing a Biofuels gasifier plant in the USA already using Velocys technology and wood are after diversifying from oil into green energy sector. (This plant red rock Oregon is now 11 years on and still not finished yet)
There is also a backlog of financial closures on deals originally scheduled to be completed H2 2020 due to Covid. There is a new deal structure in place now. The first payment at financial closure is now for 40% of capex revenue, previously 25%. With over £500m of deals in the pipeline being considered, with the pipeline expanding rapidly, growth here could be very rapid.
Align research note available online, new price target from April is 3.1p
http://www.alignresearch.co.uk/cpt-company/eqtec
Account needed to view but latest note from Arden - March 2021 with buy rating and price target 2.8p
https://research.arden-partners.com/portal/portal.html
Video presentation with slides - **very informative** on company's corporate strategy:
https://dt9xom8irs6kr.cloudfront.net/u238195/144695-2877389305321170519.mp4
Now considered a long term institutional investor came onboard at £10m placing, tb Amati hold over 300m shares see below:
https://www.trustnet.com/factsheets/o/cic8/tb-amati-uk-smaller-companies-b-acc
Latest proactive videos with CEO David Palumbo
https://youtu.be/nCuosGed0gU
https://youtu.be/fWOAP-kvpJ8
David Palumbo interview starts at 14m in podcast and discusses the RDF market and potential dominance of EQT:
https://mobile.twitter.com/thejointventur1/status/1319635982220775426
Article from March 2021 outlining the future direction:
https://www.inspiratia.com/renewables/regions/eu-europe/uk/region-insight/article/eqtec-ceo-companies-like-us-are-becoming-the-prize
Hi All
Doing reseach and wondered if anyone could clarify a few points.
Do we find the sites or do we get approached?
Can we do all stages from design to build to maintenance
If we build is this why we loan funds with sort return dates as payment due on completion.
Is the 15m I’d accounts where we are at certain stages with project but no actual build?
What is our average length of project?
Sorry for all the questions but trying to get a handle on how it works.
Thanks