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http://www.dailyrecord.co.uk/business/business-news/energy-assets-group-plc-smart-3898701 It seems the contract has been shared between SMS and EAS. I was hoping EAS was leader in the I&C sector but BGB isn't the only gas supplier and anyway a twenty year contract with 50% of metering is good for the smaller cap firm.(Approx a third the size of SMS)
Energy Asset's shares currently trade on 13 times earnings forecasts for the current financial year. That's too cheap given the company's exceptional growth profile and considering shares in smaller sector peer Smart Metering Systems (SMS) trade on about 31 times earnings expected over the same period
Renting the meter and collecting its data represent the majority of Energy Assets' business, providing it with a highly visible, reliable revenue stream; in fact, 70 per cent of total revenues are now recurring, up from 55 per cent in 2011. The consulting and engineering side is nevertheless growing fast - revenues and gross profit climbed 28 per cent last year - giving the bottom line a substantial boost............. Underlying EPS rose 73 per cent last year thanks to the operational gearing inherent in the business, with the company investing over £21m in the period mainly on meters. Clearly, if Energy Assets is to continue growing at such a fast rate, it must have sufficient financial firepower to keep investing in long-life metering assets. The company made sure it has enough for at least the next two years when it refinanced its debt and signed a new £35m facility with Bank of Scotland in November 2013; available financial resources totalled around £47m at the year-end. Admittedly, borrowings have risen sharply in recent years and now sit at £51m. But that’s still only around 3.4 times cash profits, which is an acceptable ratio given the debt is secured by a high-quality income stream; metering incumbent National Grid’s (NG.) ratio is 4.8. In the near term, there's also potential for Energy Assets to expand into a multi-utility service provider. The company already provides some data monitoring services for water and electricity meters, but the £2.3m acquisition of electricity specialist BGlobal Metering in April should substantially boost its profile in that sector. True, the company's inexorable focus on growth means that unlike most utility companies, Energy Assets does not currently pay a dividend. But this should change over time as the company's asset base matures and is transformed into a reliable cash machine.............
A fast-growing utility company may sound like an oxymoron - even when we're talking about a quasi-utility company - but that's exactly what's on offer at Energy Assets (EAS). In the 12 months to 31 March, the gas metering services group organically increased turnover 34 per cent, while cash generated from operations climbed 58 per cent. That remarkable growth isn't a one-off, either; as the table below demonstrates, Energy Assets has been growing sales and profits at nearly the same pace for years - and, if broker forecasts prove accurate, the company will continue to grow strongly for some time to come. That's because demand for the installation of Energy Assets' advanced and smart gas meters is being driven by a government policy that every metering point in the UK have a smart-enabled energy meter by 2020. Rising energy prices mean industrial gas users are also upgrading their meters to improve energy efficiency. Energy Assets is at the forefront of this change and is the largest independent provider of metering services to the UK industrial and commercial gas sector. Its business model is simple. Energy Assets borrows money from its bank to cover the upfront cost of installing the smart gas meters, which cost around £850 each. The customer then pays Energy Assets a rental fee each year for the life of the meter - typically 20 years - at an average of £135 annually. The company installed around 20,000 meters last year to take its portfolio to 101,000; broker Numis expects a similar increase this year. Sometimes, Energy Assets also provides meter reading services at an extra cost. Other times, if the customer needs help with engineering design, infrastructure upgrades or compliance and accreditation, Energy Assets will provide these services, too. The cost of meters are fully capitalised on the balance upon installation, and fully amortised through the profit and loss statement over the first half of the asset life.
Energy Assets Group has agreed to acquire BGlobal Metering for a cash consideration of £2.3m which includes payment of £0.2m for the completion cash balance. The acquisition is made on a debt free basis with a working capital adjustment mechanism in place post completion. BGM is a wholly-owned subsidiary of Bglobal and provides advanced metering technology to the UK I&C electricity sector. This includes the supply and installation of smart electricity meters, meter operator services (MOP), and the ongoing collection and aggregation of energy data (DCDA). BGM is a fully accredited MOP and DCDA and provides MOP services to utility companies for circa 60,000 meter points and DCDA services for in excess of 90,000 meter points. Following completion of the transaction, Energy Assets will provide management services for circa 161,000 meters and will retrieve data from circa 152,500 meter points across the combined gas, water and electricity sectors. Energy Assets says the acquisition will give it the systems, accreditations and expertise to successfully operate as a leading service provider in the electricity sector and is in line with the group's strategy to offer metering and associated energy services across a multi-utility platform. It says the firms' offerings are extremely complementary and both businesses deliver services to a number of energy providers, energy brokers and a significant number of end user clients.
You and me both, there seems to be no stopping it either...
http://www.sms-plc.com/corporate-solutions/investor-relations/share-price judging by the SP SMS is definitely the one I should have invested in.
How does EAS's claim to be the largest independent I&C gas metering services tally with SMS's claim that they have contracted with 80% of the market? If SMS's I&C gas portfolio grew by 118% in 2013, they could be hot on EAS's heels? There is a big market to go for with 1.5 million non-domestic gas meters out there, so maybe there is room enough for two?
Trading Update Tue, 15th Apr 2014 07:00 RNS Number : 7966E Energy Assets Group plc 15 April 2014 ? For immediate release 15 April 2014 Energy Assets Group plc ("Energy Assets" or the "Group") Trading update Energy Assets Group plc (LSE: EAS.L), the largest independent provider of industrial and commercial (I&C) gas metering services in the UK1, today announces an update on trading ahead of its Annual Results to be announced on 10 June 2014. Energy Assets continues to experience strong trading and growth across all three of its business divisions and accordingly, based on unaudited management accounts, it is anticipated that the Group's trading for the twelve months ended 31 March 2014 will be in line with the Board's expectations. As of 31 March 2014, the metering portfolio owned and installed increased by 25% to circa 101,000 assets (2013: circa 81,000). This represents a significant milestone in the Group's growth profile. In addition, the number of meter points from which data is collected on behalf of our customers has increased by 19% to circa 62,500 units (2013: circa 52,500). The business outlook for 2014/15 is increasingly positive. Chief Executive Phil Bellamy-Lee commented: "I am delighted to be able to report another year of excellent growth across our three business divisions, further enhancing our market position and increasing shareholder value as the leading independent MAM in the UK I&C sector."
Hi is there a possibility that the SP is strongly linked to the fortunes of Centrica. SP dropped from 390 to around 3.10 and now rebounding upwards - during the same period CNA has dropped due to the "Political Rhetoric" effect.
Nothing, just posted on wrong board, put it on ESG just now when noticed the mistake! Very disappointed here at the mo, down a lot, blinking truevalue tip.
Hi Doze What has the article to do with EAS??
Big Drop and then a resurgence - hope it stays at the previous level
Hi yes - could be - but still a good play long term.
I expect we will hear something has altered the business plan but hope not. http://www.smartmeters.com/the-news/4351-smart-meter-deployment-might-miss-goals-but-still-good.html
Another significant drop but no explanation as to why - nothing on google - very strange.
No idea. Very strange
what happened today ?
Hi Doze .....will stay put - and look for the dividends in the future and the future is smart technology - all things connected.
Still edging up, waiting for it to break 400 and put and jump, maybe.
Shove = should Experience = source of Have also looked at investing into nascent technology specialist called telit communication on the ball of the drive towards smart technology. Recent article again in the shares magazine and followed the trajectory of this company for a couple of months. It's PEG ratio as illustrated in magazine and in yesterday's money week is around 0.24 which represents potential growth. But do your own research.
Hi guys thought I was the only guy to have bought into energy assets. Been slowly drip feeding my acquisition based on a good write up read in money week and some other magazines and a chance meeting with my friends husband who stated the future is in smart technology. This company has gone under the radar and whilst it has a high level of debt currently by 2015 debt pile shove have been reduced significantly that it's going to purely cash generative and good experience income. The shares magazine also recently had an article related to the same. Been following since July and price seems to hit a mark for example 3.40 stays for a couple of weeks then slowly moves up to mid range and then upper level. In July it was 2.38. Good luck.