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Liberum have just issued a whopping 32 page Buy note on INSE, having raised 2024 and 2025 EPS forecasts by 5% after the recent interims.
They have a 200p target price, with 345p based on DCF,and they forecast 13p EPS this year, rising to 13.7p EPS next year.
They summarise:
"Inspired Plc*
Differentiated model can take advantage of structural tailwinds
The H1 23 results were in line. We make four key points on the business:
1) Inspired has evolved from a Third-Party Intermediary (TPI) in the energy market to a technology enabled services provider;
2) synergies between divisions help cross selling and make Inspired uniquely qualified to help with both sides of the energy equation (cost + consumption);
3) underlying EBITDA is expected to double in 5 years (FY 22 – FY 27), indicating 44% upside to our FY 25 estimate;
4) the business is becoming less reliant on Energy Assurance profits, which helps increase earnings quality. In terms of valuation, a CY 24 P/E of 5.1x is attractive given the growth.
Key points
H1 23 results were in line;
Optimisation was the star performer.
Net debt (exc. leases) increased from £37m at FY 22 to £49m at H1 23.
Contingent consideration being paid.
Value drivers
Scope to grow in newer areas like Optimisation, Software and ESG.
These should accelerate growth and increase the valuation multiple.
Energy crisis drives Optimisation.
What market misses
A £3.6bn CLV is addressable.
Software and ESG will help margins.
Assurance
Strategic Equity (Ken Wooton) own a £10.3m stake in INSE - their 6th largest holding - and issued their prelims today. They achieved an 8% rise in NAV, pretty good in these markets.
They had this to say about INSE:
"Inspired, which de-rated on no specific news and despite delivering strong results and reaffirming expectations in line with market consensus"
"Developments during the year"
" Strong FY22 results, Q1’23 momentum and FY23 outlook
Demonstrable progress in cash conversion and cross-sell
New incentivisation agreement within its energy optimisation division, with performance hurdles significantly ahead of market forecasts"
Https://www.londonstockexchange.com/news-article/SEC/annual-financial-report/16141316
mark dickinson, chief executive officer, paul connor, chief financial officer and david ****shott, chief commercial officer present half-year results for the six-months ended 30 june 2023.
watch the video here: https://www.piworld.co.uk/company-videos/inspired-inse-fy23-interim-results-presentation-september-2023/
or listen to the podcast here: https://piworld.podbean.com/e/inspired-inse-fy23-interim-results-presentation-september-2023/
If Mark Dickinson thinks the market is confused about it being an energy company maybe Inspired Energy is not the best name for a company that doesn’t sell energy. The real problem is that costs outpaced growth in the first six months. That’s what he needs to address. He can call the company what he likes.
Another 55k dumped at 70p. Who can it be . Plenty to choose from. Slater, Miton, Gresham, and half a dozen others. I watched the CEO being grilled by Wotton recently. He still blames the market for thinking they are an energy supplier of broker, neither of which is the case as most of us know. Interesting that Sunak put back end of new petrol and diesel cars and new boilers by 5 years. Like the Ford comment about what he would like from a government. wouldnt we all. Finally fezzed up to Boris being a total idiot. I could have told them that 25 years ago
The Investment Company PLC/Chelverton have evidently been buying per today's RNS and have accumulated a 6.3% holding in INSE, with 6.335m shares:
Https://uk.advfn.com/stock-market/london/inspired-INSE/share-news/Inspired-PLC-Holdings-in-Company/92058452
Chelverton Asset Management had a 4.7% holding in INSE at 14th August with 4.72m shares per INSE's web site, so I assume they've bought another 1.6m or so shares.
Chelverton were appointed as the Investment Company's external investment portfolio manager in July. Perhaps the new holding is a combo of both their holdings now (the Investment Company haven't previously had a holding in INSE).
Not sure what balance you are referring to. Oo ah ouch. You say in 2020 you nearly invested but you didnt. 3 years later and constant stream of negative comments without ever explaining why or where you thing the business is going wrong. Not a single post about any other company. Yes I do make the odd bad investment. I think events have conspired against Inse. It happens in business. Fortunately I have had many more winners than losers and much larger holdings as in Equals, Niox and Atm all having netted 100% gains plus. Not actually badly down on Inse and as I said getting a reasonable dividend. I find it hard to believe that you have been following this company for at least 3 years and you dont realise that two big founds had to pull out. One, only yesterday with millions traded at 70p. Presumably broker to broker. Basically I just dont understand what your fascination is with this stock or why you dont give any clue that you know anything about the company or what they do other than making cynical comments about following Ken Wotton, who incidentally netted me a very handy 60 % profit when Mgp got taken over earlier this year. Absolutely no ill feelings against you. Just trying to understand your motives
You sound upset Oogle...did one of your trades not work out? Never mind, stick to following what Ken Wooton says and you'll make it all back again in no time at all.
And who says Im a disgruntled ex-employee? I could be a disgruntled current employee for all you know. Perhaps I find it amusing that not all is as it seems with INSE and try and provide some balance to this discussion board. Or perhaps Im just here to wind you up ;)
Your comment about two over-eager fund managers is interesting. Care to expand as to where you got this from?
Congratulations Bargain. Finally a really interesting post. After 3 years and 23 posts on Inse you have finally struck gold. Are a disgruntled ex employee? I get the felling you have never invested from your 23 posts and all only on Inse over 3 years. Absolutely fascinating. Yes tricky little one this partly thanks to two over eager fund managers who then became forced sellers in the bear market. The dividend is ok, the debt is too big, but they should be able to start paying that off from next year. Russian invasion wasn’t particularly helpful and the conspiring of Bp and Shell to fully exploit the situation.
Inspired plc posted interims for the HY ended 30th June this morning. Each of the Group's four divisions traded well, with the Group delivering organic revenue growth of 10% in H1 2023. Adjusted EBITDA grew by 9% in H1 2023, with Group margins remaining stable and in line with expectations at 24%. The balance sheet weakened a little with net debt increasing in line with management’s expectations to £49.1m, but is expected to turn back lower by year-end and gearing ratios are comfortable. Valuation looks very attractive with forward PE ratio at 6.7x top quartile for the Professional & Commercial Services sector. Share price lacks positive momentum and remains in a longer run correction for now. One to monitor for the time being...
...from WealthOracle
wealthoracle.co.uk/detailed-result-full/INSE/790
Inspired CEO Mark Dickinson presents a short overview of the groups’ FY23 interim results.
Watch the video here: https://www.piworld.co.uk/company-videos/inspired-inse-fy23-interim-results-overview-september-2023/
Or listen to the podcast here: https://piworld.podbean.com/e/inspired-inse-fy23-interim-results-overview-september-2023/
H1's 4.84p EPS is a touch ahead of Liberum's forecast, and Liberum have retained their forecast for the year of 13p EPS.
They've also raised their forecasts for 2024 and 2025 by 5%, to 13.7p and 13.9p EPS
They have a 200p target price and say Buy.
INSE are confident of meeting expectations given the H2 weighting.
Great to see ESG and Software roaring ahead, and Optimisation is trading well again.
Underlying EPS was down due to higher interest rates, and cash flows were affected by acquisition consideration payments which won't recur - in fact July cash inflows were terrific.
Over time there looks to be excellent upside here.
Fo anyone with a vested interest earnings update to be released September 8th. Perhaps Lse will catch up in due course
Last year a half year update was issued on september 6th. As yet we have had no announcement for this year about trading update. With prices easing and price cap being lowered would hope this helps the business on many counts. Ken Wotton is fund manager of about five funds. Wonder why that is. O yes he has two takeovers this year netting me 50% gains following his opinions. I thought the purpose of theses boards was to comment on our vested interests. Why would you bother if not invested or interested? ‘Ouch it doesnt look good’ is not particularly informative. Most of the market is the ouch it doesnt look good category at the moment for obvious reasons. Sometime it will be ouch I missed the bull market if you dont stay tuned to what is actually going on in a company rather than commenting on the vagaries of of the current impotent market movements.
So boring. More repeated 'info' from those with vested interests.
FYI Liberum's is an 11 page note - here's their summary:
"Order book growth underpins outlook
The H1 update guides to good progress in H1, with momentum in Q1 continuing into Q2. We introduce H1 FD EPS of 5.0p which implies an H1 weighting of 39%. We expect IAS 17 net debt to increase from £37m at FY 22 to £48m at H1.
We maintain our FY 23 FD EPS estimate of 13.0p, despite an increase in expected interest, and maintain our net debt estimate. We expect that the order book is growing due to new business generation, longer contracts and higher retention at Assurance. Looking at the divisions: 1) At Energy Assurance, limited growth in year but new business wins and improved retention; 2) At Energy Optimisation there is continued strong growth as customers continue to focus on ESG, helped by cross-sell; 3) ESG is also growing very fast from a low base, and benefitting Optimisation.
A CY 24 P/E of 6.9x is attractive given the growth.
The H1 update guides to good progress in H1, with momentum in Q1 continuing into Q2. Each of the four divisions is trading well. We expect interim results on the 11th of September.
We introduce H1 FD EPS of 5.0p which implies an H1 weighting of 39% For the first time we introduce earnings estimates for H1. We assume sales increase 9% (all organic) to £44m, and that the EBITDA margin remains stable at 23.9%. We assume that EBTDA grows from £9.7m to £10.5m. If we assume £2.4m of DA that suggests EBIT of £8.1m, an EBIT margin of 16.2%. We estimate H1 FD EPS of 5.0p, which represents an H1 weighting of 39.0%, and we assume H1 DPS of 1.4p."
"A CY 24 P/E of 6.9x is attractive given the growth. Inspired has a low carbon beta, but that should change as its ESG credentials become more apparent. Growth in newer areas like Optimisation, Software and ESG, should accelerate growth and drive a re-rating. Our SoTP suggests a TP of 200p."
Just to add, Shore Capital forecast 13.7p EPS this year against the 91.5p share price.
Shore Capital are also bullish - extracts as follows:
"H1 trading, momentum and confidence
The ‘ESG impact company’, providing specialist energy services and a partner to corporates in the UK and Ireland in the drive to ‘Net Zero’, has announced a trading update for its H1 period to end June this morning. This confirms good operational and strategic progress across Group activities.
Accordingly, Inspired is confidently retaining guidance for its FY23F performance at this juncture (revenue of c.£110m, EBITDA of c.£24m; we currently have revenues at £105m and EBITDA in-line at £24m). We will review our model and forecasts with the interim results confirmed to be posted on 11 September"
"Valuation thoughts
We note a confident tone in this H1 trading update. Inspired continues to evolve and offers investors solid ESG credentials and regulatory tailwinds in addition to long-term economic growth drivers.
The Group trades on a FY23F PER of 6.6x (EV/EBITDA 5.4x), funded by a free cash flow yield in the 11% range, with an anticipated dividend yield of 3.2%. We look to further solid progress through the current H2 period and beyond."
Liberum have retained their 200p price target and forecast 12.9p EPS this year.
Good to see the one trade this morning is a Buy at 96p, 1p above the 95p published offer price, and that was for just £1k or so. Perhaps there's not much stock around.
Hopefully a little press attention and/or more institutional buying will trigger a sustained move back to 120p for starters.
A rather encouraging H1 trading update this morning....
INSE are trading nicely in line with consensus forecasts of 13.5p EPS this year, with revenue of £110.5m and adjusted EBITDA of £24.2m.
At 90p that's a current year P/E of just 6.7.
All divisions are trading well. The newer ESG and Software divisions continue to grow. And the outlook is very confident:
"We head into H2 with a strong pipeline and a growing orderbook, underpinning our confidence for the full year and beyond."
Https://uk.advfn.com/stock-market/london/inspired-INSE/share-news/Inspired-PLC-Half-year-trading-update-and-Notice-o/91766216
OT : thanks LordofBurnley, appreciated. I value broker research as valuable insights into the company, particularly as these days such info and the forecasts therein are usually "guided" by the company. Price targets are obviously more subjective, but that's a matter for discussion and no reason for dismissing all such broker research out of hand!
Not sure the hostile posting for rivaldo is necessary, bargainhunter20.
Over the months/years s/he (rivaldo) has posted quite a bit of info which I'm not sure I would have found. It's up to the individual to look at any info with a critical eye and make their own mind up .
As for your posting just having a go at a fellow poster without offering a well-supported counter argument, does seem a cheap shot. I know you've asked the question about why the sp is performing the way it is but rather than just having a pop at someone who presents info which suggests the sp doesn't make sense, it might be more helpful if you could offer some explanation rather than just being unduly aggressive towards other posters.
Anyhow, I for one, appreciate rivaldo's posts.
Have a nice day everyone. -.
Has this stock had a share spilt or something last time i looked it was 10p