The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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It would be great to get an update from the BoD soon. I suspect a delay in communicating anything at this time is that they are waiting on some key news. Hopefully a special dividend, as this would attract a different type of investor going forward and maybe encourage a few existing investors to hold on rather than take profits too early.
Let's sit and watch, good luck all.
Looks like the updated broker valuation is 12p. Looking at other similar debt free companies, we must be on a forward p/e of at least 10, which would mean at least 10p. A very easy buy and hold IMO
Thanks, Trendz. What would be a reasonable assumption of share price based on this?
Right - Stockopedia is showing the new forecasts! Obviously the broker note is not made available to us plebs until after the big boys have it... We are looking at EPS of 0.87 for FY24 and 1.08 for 25. This means EAAS trades on a forward p/e of 7.27. Plus cash, plus growth. Insane valuation
Imagine a few RNS in the next few weeks. Results in next 2 weeks I believe
Morning, gents. Are we not supposed to have had revised forecasts / a management presentation following completion of the sale?!
Good to see some sizeable buys in the 8s. Hopefully a broker rerate and onwards and upwards
Fully agree PTI. I suspect we have a big seller at 8p, as it has been a firm resistance for some time now. Finalised 2023 accounts, and another decent RNS will hopefully blow away the remaining cobwebs.
Hopefully this week will be the week the SP pushes past the automatic sells lodged at 8p. Once it surpasses this I am in no doubt we will see it steadily rise up to 10p+
RNS drops and everyone is sleeping
Hahaha it’s certain worth highlighting!! Company has now wiped its debt and has huge cash left to reinvest in the energy division!!
GB; looks like we both need to go the HE1, RRR, HEMO, ARB and PREM BBs and p*ss a few people off with this fantastic update...lol
Needs a pole and it will pass 10p Cameron!!
Nice deal!!!! Surely this is not undervalued with that windfall?!?
Done and dusted, excellent.
Given how generous the BoD has been with their own 'bonuses'... I agree a special divi would be appreciated.
It feels like we have a lot of sellers at 8p. Natural resistance level or a trigger point for a larger seller? probably both, otherwise I think we would be north of 10p already. It will come. good luck all.
EAAS can afford it.
Sorry - too big to copy in one go. 2nd part is posted last, so you need to read the the lower part 1st!!
IC Article as per ADVFN
eEnergy’s in-house solar PV system solution offers an equally compelling offering for clients by providing them with onsite solar generation at no upfront investment, significant energy savings, and cheaper energy consumption than buying directly from the national grid.
A good example is the group’s £3mn contract with West Midlands-based Tudor Grange Academies Trust. eEnergy is providing Tudor with a fully funded 10-year service agreement with no upfront costs for a turnkey energy solution. It will enable its 12 schools to generate 30 per cent of their energy needs and earn additional income exporting any unused energy to the national grid. eEnergy will recognise £1.9mn of revenue for the contract in 2024 and 2025.
eSolar projects are a significant growth area, so it’s reassuring to know that the ability of eEnergy to deliver on new contracts is underpinned by off-balance-sheet arrangements with funding partners to finance the capital cost of the projects. It also improves the group’s own working capital position.
Energy-efficiency-as-a-service profits booming.
The EEaaS offering is not only high-growth, but is profitable. Analysts at Canaccord Genuity estimate that the energy services division’s revenue increased 144 per cent from £9.6mn to £23.5mn from 2021 to 2023, and that annual cash profit more than trebled from £0.9mn to £2.6mn. The last figure is worth noting because it more than covers the group’s estimated central overheads of £1.9mn.
Moreover, with analysts predicting that the energy services division's revenue will increase by 25 per cent to £29.5mn in 2024 and by a further 10 per cent to £32.6mn in 2025, cash profit could surge to £4.5mn and £5.4mn, respectively. Central overheads are only expected to rise by £0.2mn in each year to support the rapid growth.
Sum-of-the-parts valuations.
The point is that if you value the energy services business on a similar rating to the energy management disposal, then it could also be worth £30mn (7.8p) as a standalone entity assuming the board hits analysts’ earnings expectations. That sum is more than eEnergy’s own market capitalisation of £27.5mn. Add to that £18mn (4.6p) of pro-forma net cash and a potential £8mn-£10mn (2-2.5p) earn-out on the energy management disposal, and it’s not difficult to see why Canaccord has a target price of 12p and analysts at research firm Equity Development have a 13p-a-share fair valuation. My sum-of-the-parts valuations are even higher. BUY.
Bargain Shares 2024: eEnergy's net zero strategy will soon be rewarded.
Energy-efficiency-as-a-service profits are booming for this energy services provider.
*Pro-forma cash of £18mn (4.7p)
*Energy Services unit potentially worth £30mn
*Potential £8mn-£10mn earn-out from recent disposal
eEnergy (EAAS) is a technology-enabled energy services provider that helps corporate and public organisations achieve their net zero goals by designing, funding and implementing energy efficient projects.
The group has grown quickly since listing on London’s junior market four years ago, buoyed by a combination of organic and acquisitive growth. This has not gone unnoticed. Following several unsolicited approaches, the directors recently announced the sale of its fast-growing energy management business to Flogas, a division of support services group DCC (DCC), for an initial cash consideration of £29.1mn (7.5p a share). Around £4mn of the proceeds will be used to pay off intra-company debt and a further £8.1mn will pay off eEnergy’s borrowing.
Joint house broker Canaccord Genuity estimates that the group held £1mn cash on 31 December 2023, so on completion of the disposal, which is subject to shareholder approval, pro-forma net cash of £18mn will back up two-thirds of eEnergy’s market capitalisation of £27.5mn. In addition, there is a valuable earn-out agreement that eEnergy’s directors believe could earn the group a further £8mn-£10mn of contingent cash consideration payable in two instalments later this year and in late 2025. The earn-out is capped at £20mn and is subject to the energy management division delivering an agreed minimum level of earnings.
The benefit for eEnergy’s shareholders is that the energy management disposal delivers a potential £39mn total return (including a £10mn earn-out) on the £23.4mn invested in that business since December 2020. The acquirer is paying a multiple of 6.5 to 8.5 times the energy management division’s forecast 2024 cash profit (of £4.6mn) to enterprise valuation.
Importantly, it means that eEnergy’s board now has the funding to accelerate growth in its other fast-growing business, energy services. This operation helps clients cut their energy consumption by switching to energy-efficient technologies by way of a capital-free funding model.
Turning energy efficiency into a service.
Specifically, eEnergy delivers energy reduction solutions by offering clients energy-efficiency-as-a-service (EEaaS) through the deployment of LED technology, other energy efficiency solutions, charging infrastructure and rooftop solar photovoltaics (PVs). Its largest customer segments are in education and healthcare. Customer asset upgrades, paid for through lower energy bills, are financed through third-party finance partners that have long-term relationships with eEnergy.
For instance, energy-efficient LED upgrades to schools remove the barrier of a high upfront capital commitment
Yes, nice to see this in the 8's although as per usual any rise has been sold into.
I suspect the £25m has hit our account. Although no doubt someone will point out £8m is being used to clear the debt so it's only £17m (or c4.5p per share) in the last 12 months the borrowing cost was over £1m so eliminating this will clearly add £1m to the bottom line . This debt has been holding back both the SP and the growth of the company, although ES still grew 87% in the last 12 months.
The broker note states ES growth in 2024 is estimated to be c25% - and i think this is against 2023 which was a 18 month trading period, due to the accounting date change to 31/12 (from 30/6).
Looking forward to the trading update hopefully in a week or so.
From the numbers we've been given, it all looks pretty good. Hopefully we'll attract a few more eyes with some articles on the sale.
Nice bounce this morning already...
Thanks for posting the Investor Chronicle link.
Still can't access the full report without subscribing.
I wonder if anyone would be kind enough to list the top ten (or whatever it is) 'bargain shares' in the Simon Thompson 2024 list?
Thanks very much, TT
Despite getting £25m cash it appears this won't really get moving until the YE numbers are announced - 2nd half of Feb.
As part of the EM sale RNS it was mentioned that YE trading was at the lower end of expectations. This seems to have spooked a few. I'm unsure what these expectations were. This YE is 18 months as the accounting period is being changed/extended. The 12 month figures were quite good and the outlook for YE, so the final 6 months is below.
All seemed quite positive in Sept when this was released.
Outlook
Energy remains high on the agenda across the UK, and we continue to see strong appetite from new and existing customers for our suite of products and services.
Post period end, the Company secured a significant contract with a Total Contract Value ("TCV") of £3.0 million, resulting in £1.9 million revenues, from existing customer Tudor Grange Academies Trust, for a solar energy generation project across its collection of academies. This illustrates the Company's ability to execute against its cross selling strategy within its existing customer base.
Whilst market conditions tightened over the summer period, eEnergy's contracted revenue book remains significant, giving strong visibility on revenues for the final six months of the financial period. Contracted forward revenues (the "Forward Order Book") at 30 June 2023 were £27.5 million (31 December 2022: £26.4 million), of which £14.1 million are expected to convert into revenues in the six months to 31 December 2023.
The Group remains confident that eEnergy's proposition is more relevant than ever, further supported by a continued shift in regulatory and structural growth drivers. The Group remains cautiously optimistic of delivering results for the 18 month period ending 31 December 2023 in line with market expectations.