We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
INSE are one of Strategic Equity Capital's top holdings, and in today's results they have a very useful summary outlining their current views on INSE:
"Inspired (formerly Inspired Energy)
Description
Is a leading UK B2B corporate energy and ESG services specialist. The company works with their clients, generally large corporates, to procure energy cost effectively, audit and report their usage of it, and help them to optimise their energy efficiency. The company has a strong focus on sustainability with a number of services that help their clients measure, report and improve their ESG performance.
Thesis
Inspired is a leader in the growing, but fragmented, corporate energy services market. The increasing complexity of corporate energy requirements, and increasing regulatory and sustainability imperatives will support continued strong organic growth for the company with a likely ‘flight to quality’ leading to further increases in market share. The business model of the business is strong with high quality of earnings from long term contracts, high margins (40% EBITDA margin) and return on capital and good cash conversion. The fund’s initial investment was made as part of a placing intended to strengthen the balance sheet and provide firepower for the company to undertake a number of bolt on acquisitions to continue to consolidate its position in the market.
Although the company’s revenues were depressed due to lower corporate energy usage over lockdowns, there is significant opportunity for a rebound in revenues, and in the share price, when there is a return to a more normalised environment. Over the medium term there are strategically attractive opportunities, both organic and inorganic, to gain market share and broaden the range of services offered, particularly in ESG-related areas.
Developments in the period
Full year results, reported post period end, were in line with expectations despite a number of short term headwinds. Firstly, ongoing Covid restrictions over the period continue to weigh on corporate energy usage, which has a knock on effect on the financial performance of the company. Corporate energy consumption has now largely returned to pre-pandemic levels, and as such this drag on performance is likely to unwind into 2022. Secondly, extreme conditions in wholesale energy markets impacted the timing of renewals and new customer wins.
Over the medium term however, we believe that conditions only serve to emphasise the value of Inspired’s proposition, namely helping corporate clients optimise their energy usage, procurement and hedging requirements. Within this market context we view the 7% increase in the order book as being a creditable performance and boding well for the outlook into 2022. Recent acquisitions, Businesswise and GEM, were also successfully integrated in the period, adding to the company’s market leading position in its core energy assurance services space."
and now the government have said they may underwrite holding in Gazprom to protect uk firms , so this makes the sp fall even more ludicrous
As they have been actively looking to replace Gazprom for their own customers and Gazprom are a 'significant' supplier to uk businesses INSE could actually pick up some significant new customers. Will wait to see if there is a further wobble in run up to results but this does look like a great opportunity in this ridiculously illogical market.
Interestingly the wording as a comment rather than actually news. A company only has to mention Gazprom to warrant a 50% drop in share price. Timing is quite interesting too. Get it out of the way before results next week which will hopefully prove to be at least reasonable. Revenues expected to be circa 48% higher than 2020 and Ebitda 55% ahead. A possible worse case scenario of 3% dent in 55%.................
Hmmmm, bit of a setback there. However, wiping 3p off the share price (or £30m of m/cap) seems over the top imo for an event which in the very worst case would take £3m off EBITDA.
Either the UK's Gazprom arm will be sold/hived off to someone more acceptable, or their customers will have to find replacement suppliers pronto with INSE's help, so I'm doubtful the eventual impact will be anywhere near the full amount and perhaps will be pretty immaterial if an orderly replacement supplier is found.
INSE are highlighted in the new Shares Magazine in an article about investing in energy-efficient companies:
"Inspired (INSE:AIM) is a consultancy focused on the corporate energy market, in particular bigger users, advising them on how to get the best deals from their suppliers as well as how to consume less energy to keep their bills and their
carbon footprint down.
Unsurprisingly, its energy optimisation business picked up momentum in the second half of last year and group revenues for 2021 were 48% higher than the previous year, most of which was due to organic growth.
As the firm says, the global energy crisis has made energy ‘a high-priority board level topic’ and it has been working flat out to help customers manage energy prices and reduce their usage.
Record high prices have led some customers to delay their contract renewals while others have moved to short-term contracts until there is more clarity. Once prices start to fall, the firm expects contract renewals and durations to increase which will benefit its energy sourcing business."
Good news yesterday - a prestigious appointment:
Https://inspiredenergy.co.uk/pcmg-named-as-supplier-on-ccss-debt-resolution-services-framework/
"PCMG named as supplier on CCS’s Debt Resolution Services Framework
8th February 2022
Professional Cost Management Group (PCMG), part of the Inspired PLC Group, has been named as a supplier on Crown Commercial Service’s (CCS) Debt Resolution Services Framework (RM6226).
PCMG secured its position on the framework to help public sector organisations, as well as private organisations acting as managing agents — access to their forensic Energy, Water & Telecoms Cost Recovery Audits. Public bodies include:
NHS
Local authorities
Higher and further education
Emergency services
Registered charities
Central government
Andrew Stubbs, Director: Compliance & Reporting, said:
We’re thrilled that PCMG has secured a place on such a coveted framework. It’s brilliant news for all public sector clients, to be able to access PCMG’s world-class experience and expertise. Congratulations to all the team for all their hard work and success!”
What is the Debt Resolution Services Framework?
The framework is designed to bring together a range of debt collection and data services into a single commercial agreement. CCS supports the public sector to achieve maximum commercial value when procuring common goods and services. CCS helped the public sector achieve commercial benefits equal to £2.04 billion in 2020/2021 — supporting world-class public services that offer the best value for taxpayers.
The framework runs for four years, starting in December 2021, and replaces the now expired Spend Analysis & Recovery Services II framework (RM3820).
PCMG is proud to have been selected in:
Lot 17 – Spend Analytics and Recovery Services (Utilities Spend Recovery Review)
Lot 18 – Spend Analytics and Recovery Services (Telecoms Spend Recovery Review)
James Paine, PCMG Director – Business Development, commented:
It’s a fantastic achievement and a true reflection of the great success we’ve already demonstrated across the public sector for the last 25 years. As the UK’s leaders in utility and telecoms Cost Recovery Audits, this framework will allow our team of experience analysts to showcase our expertise and continue recovering millions in much needed refunds and savings back to the public sector”."
Shore Capital have retained their 1.45p EPS forecast for this year, along with a 0.3p dividend.
At 18.75p that's a P/E of only 12.9.
Shore note that "we are confident on the direction of travel". I suspect that after the recent rise there's probably been a bit of profit-taking, given that there are no obvious catalysts to propel the price forward and a couple of small wrinkles in the narrative today.
With confidence in improved trading from Q4 continuing and going forward for some years to come, plus sizeable institutional buying lately, hopefully the upward trend will resume soon.
Shore conclude today:
"Valuation
Recent acquisitions (Businesswise and General Energy Management) are integrating to plan and with market conditions normalising, even with energy price volatility continuing (a stimulus to Optimisation), we note a positive outlook with a return to strong profit growth. With solid ESG investor credentials and regulatory tailwinds, Inspired is trading on a FY22F PER of 13.1x (EV/EBITDA 9.8x), offering a progressive dividend yield of 1.4% from rising free cash flows."
Adjusted Ebtitda 55% of 2020. Revenue up 48% cash generation expected to materially increase. Share price down 5% on stockopedia. Just about sums up this market. Debt up 2 million to 32 million, which maybe needs looking at. Should get more explanation on March update .
Great to see revenues above expectations and EBITDA in line, so we can expect around 1.3p historic EPS with 1.5p EPS forecast this year.
All divisions performed reasonably well, particularly Energy Optimisation. The new ESG Services division is very promising and has already delivered £1m revenues. There's a wrinkle as regards increasing energy prices delaying some customers' decision-making, but this is just timing more than anything.
Happy to hold here as the core business continues to recover from Covid impacts and the new Software and ESG divisions start to mature.
correction: weekend is 29th and 30th
Yup, trading update was 28th, 29th or 30th of Jan all the way back to 2014. 28th and 29th are at the weekend, so 28th or 31st seem most likely this time round.
Peel Hunt have named INSE as one of their 35 small cap stocks to own in 2022. Let's hope they're right!
Https://www.ii.co.uk/analysis-commentary/35-small-cap-stocks-own-2022-ii522531
Interesting rise into the year end trading update, which last year was on 29th January.
Thanks for the extra bits of news R. My main concern was more about the internal wrangles within Gresham than anything about INSE. So quite a relief they are still buying here. I think some of their investments have been 'rearranged' by changes in management.
Yep, Gresham House have bought over another 12m shares.
They now own a whopping 21.28%, with 207.46m shares - up from 195.45m per their last disclosure in October.....
Https://www.investegate.co.uk/inspired-plc--inse-/rns/holding-s--in-company/202112171016250434W/
And more news - INSE had a £250,000 investment in Switchd as per the last finals (see Note 12).
Last month Switch raised another £1.2m+, led by Turquoise and Nationwide Building Society, and Inspired Energy has invested further in this round:
Https://www.privateequitywire.co.uk/2021/11/29/309801/low-carbon-innovation-fund-2-invests-switchd
"Switchd offers energy supply switching services, including green tariffs, as well as MakeMyHouseGreen, a data-driven platform that allows homeowners to source and install domestic renewable energy generation, such as solar panels and heat pumps, and energy saving products."
"Llewellyn Kinch, co-founder of Switchd, adds: “We are delighted to welcome LCIF2 as an investor in this funding round which will enable us to rollout our MakeMyHouseGreen product to a much larger number of customers.”
Taking their holding to over 21%. Seems to be one of the most misunderstood stocks around. TU due end of January
INSE have launched a tool to enable data centres and barns to cut power usage.
Interesting to see that INSE already work with over 130 data centres, and that INSE are rated "the UK’s number one advisor in its sector":
Https://theenergyst.com/inspired-to-cut-power-usage-in-uk-data-centres/
"Inspired to cut power usage in data server barns
November 23, 2021
Believed to be guzzling as much as 2% of the entire planet’s electricity now – and already at 11% in Ireland, – data centres and server barns have an unenviable reputation as power hogs, satiating consumers’ limitless desire to stream video, social media feeds and avoidable selfies.
Now Lancashire-based consultancy Inspired Energy has stepped up to the green plate, launching a tool to help managers of twinkling rackfulls of boxed bits and bytes track their power usage and trim their operation’s carbon footprint.
Inspired Energy’s PUE Calculator is an online helpmeet, designed to measure centres’ power usage effectiveness. Among other metrics, it calculates operators’ ratio of IT load to total facility load....
.....James Miles, Inspired Energy’s head of specialist accounts said: “Working in partnership with over 130 data centre sites has given us a unique understanding of the specific efficiency challenges which they face.
“The development of our PUE Calculator comes from us wanting to find a simple, effective way for energy managers to take their current PUE and look at the potential energy efficiency savings”.
“Only through understanding energy usage and the potential for efficiency, can we put in place plans to …really make a difference to our businesses and our planet.”
Besides software development for the data centre sector, Inspired Energy helps centres in buying with 100% renewable energy, and advising on management of carbon and utility supplies.
In a recent Cornwall Insight report, analysts Cornwall rated the firm as the UK’s number one advisor in its sector."
INSE have partnered with Make UK to launch "the first roadmap to net zero for the manufacturing sector":
https://pwemag.co.uk/news/fullstory.php/aid/4859/Britain_92s_manufacturers_come_together_to_launch_the_sector_92s_first_Net_Zero_Roadmap.html
"Britain’s manufacturers come together to launch the sector’s first Net Zero Roadmap
Published: 22 November, 2021
Make UK’s manufacturing members, in partnership with Inspired Energy, are releasing today the first roadmap to net zero for the manufacturing sector. The roadmap, which was developed in consultation with some of the major manufacturing sub-sectors, provides a clear direction and major milestones towards the long term 2050 goal. It aims to encourage companies to take those first successful steps towards reducing their carbon footprint.....
.....This simple blueprint released today also outlines how companies will contribute to the establishment of the four low-carbon industrial clusters by 2030, and the decarbonisation of mini-clusters at dispersed sites. The step-by-step plan reflects the targets set to date by the Government and by other industry sub-sectors, planting the major milestones in the ground to ensure businesses stay on track and pick up the pace required for the complex journey to the decarbonisation of factory production processes and energy consumption....
....Andrew Stubbs, director: Compliance & Reporting Services, Inspired Energy said:
“The UK’s goal of reaching Net Zero emissions by 2050 is a massive undertaking, and manufacturing is a key area where transformation can happen. We are delighted to partner with Make UK on their journey to help the manufacturing sector decarbonise and play its role in the UK reaching its target.”
Good to see INSE arranging an Investor Meet presentation for all investors on Nov 25th:
Https://uk.advfn.com/stock-market/london/inspired-INSE/share-news/Inspired-PLC-Retail-Investor-Presentation/86565661
Shore Capital have today issued a 20 page note on "10 small cap winners from decarbonisation".
INSE is one of the stocks picked (alongside SUR, which I also hold).
Shore Capital forecast 1.3p EPS this year, rising to 1.5p EPS next year - with 0.3p dividends. They conclude:
"Valuation. Whilst our forecast stance is currently set on a very conservative basis, reflecting the continuing recovery of the business from the pandemic and current energy price concerns, we see strong potential for upgrades in due course driven by a return to secular growth trends leveraged by the new business opportunities alluded to above. We believe that a FY22F PER of 11.4x (EV/EBITDA 8.4x) offers an attractive entry point with this potential. House Stock."
https://inspiredenergy.co.uk/cop26/
Inspired are holding a webinar on November 12th at 14.00 about what will be expected of companies to help meet resolutions of COP26.
Is this market finally getting to grips with what INSE actually do?
At COP26 today it's been announced that major UK companies will "be forced to show how they intend to hit climate change targets" and move to net zero:
Https://www.bbc.co.uk/news/business-59136214
There should be lots of work resulting from this for the likes of INSE. Just take a look at some of the recent news flow on their blog:
Dated today: "Financing your journey to net zero"
Https://inspiredenergy.co.uk/financing-your-journey-to-net-zero/
Also dated today: "Funding solutions to support your net zero journey"
Https://inspiredenergy.co.uk/funding-solutions-to-support-your-net-zero-journey/
29th October: "5 sustainability pledges your business could make ahead of COP26"
Https://inspiredenergy.co.uk/5-sustainability-pledges-ahead-of-cop26/
20th October: "Net Zero Strategy and Heat and Buildings Strategy – they’re here!"
Https://inspiredenergy.co.uk/net-zero-strategy/
That's just some of them.....
Two large 1.7m share trades at 16.57p this morning - followed subsequently by a nice move up.
Maybe more trades atill to be reported, or perhaps clearance of an overhang, who can say.
Gresham House continue to buy. They now own over 20%, with 195.45m shares (their last increased holdings RNS was almost a year ago with 190.2m shares, so they've added over 5m more shares).
The last three holdings RNS's have all shown institutional buying, from Slater, Chelverton and now Gresham House. They seem to be taking up the slack from bored PIs....
Https://www.investegate.co.uk/inspired-plc--inse-/rns/holding-s--in-company/202110181129453985P/