Chris Heminway, Exec-Chair at Time To ACT, explains why now is the right time for the Group to IPO. Watch the video here.
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As long as there’s nothing going on that we are unaware of then this is a crazy price IMO. Even at reduced margins they should make 6m in FY24. If they can grow those margins, increase their revenue or date I say both! Then today’s price will look very silly indeed.
No, there's at least 2 of us 😁
It will be one main seller (you will see big chunks sold off) and you will get smaller sellers as people are impatient and want a quick return and so move out the share and go elsewhere.
Head down for now and should be a decent mid term prospect.
Nope. When this seller has finished selling, there will be an TR1 issued. So looks like the share price will remain low until that happens and this seller is finished.
Thank you for posting this Rivaldo. This is one of the few shares that we can honestly say is grossly undervalued, as the current share price is nowhere near a reflection of business operations. They are right to say confidence needs to return, and that is for the BOD to do. Just wish I had some spare cash to buy more. Cheers guys
Here's Singer's conclusion:
"Shares attractively valued
Whilst confidence needs to rebuild, we believe the shares should attract a higher rating over time, reflecting an attractive margin profile and long term growth outlook. We value Eneraqua against a basket of ESG driven Support Services stocks and Engineering Consultants. These trade on an average EV/EBITDA rating of 9.2x. Applying this to our Jan. ’24 earnings forecast implies a target price of 249p and a P/E multiple of 15.8x. We therefore move to Buy."
Here's Singer's new note dated 7th June - they now have a Buy recommendation, having previously been Under Review
They forecast 15.8p EPS this year, rising to 20.2p EPS next year (with 1.4p and 1.6p dividends and a £6.0m and £8.7m cash pile excl. IFRS 16 leases respectively):
"Shares rebased to attractive level
Eneraqua’s share price has rebased after the forecast downgrades at the May FY23 results. FY24 will be a reset year, with earnings reducing. However, many of the Group’s structural growth drivers are still intact and the growth story is expected to resume in FY25 (we forecast EPS growth of 28%).
Our new forecasts are supported by the order book, with 90%/47% visibility over our FY24/FY25 revenue forecasts. There is a project pipeline of £425m beyond this. Post the results, the shares now trade on a Jan. ’24 EV/EBITDA rating of 4.8x, falling to 3.6x or a P/E rating of 9.2x, falling to 7.2x. Whilst confidence needs to rebuild, we believe the shares should attract a higher rating over time, reflecting an attractive margin profile and long term growth outlook.
We target an EV/EBITDA rating of 9.2x, which drives a target price of 249p (15.8x implied P/E). This supports our Buy recommendation.
Forecasts rebased to prudent level
Post the 23rd May results, we rebased our FY24 adj. PBT forecast by 42% to reflect a reprioritising of projects in favour of typically lower margin, lower cost per unit projects. We believe forecasts are now pitched prudently. Our new forecasts are supported by a record order book and a strong pipeline. The order book provides visibility over 90%/47% of our FY24/FY25 revenue forecasts. There is a project pipeline of £425m beyond this, of which 38% is expected to be completed in FY25 so there is c.£162m of business to go after. This implies a required success rate of 34% to hit our revenue forecast vs. an historic tender win rate of greater than 50%. We consider this to be a conservative position. Management also indicates that the order book is supportive of an improving margin profile.
Long term growth outlook still intact
Eneraqua’s principal activity is the provision of turnkey retrofit district or communal heating and hot water systems, replacing end of life systems in multiple occupancy buildings (primarily social housing). It also delivers water efficiency upgrades for utilities/commercial customers. The long term growth outlook for Eneraqua’s services is underpinned by the need to improve energy efficiency, to reduce domestic energy costs and therefore reduce fuel poverty. These growth drivers remain unchanged and we expect earnings growth to resume in FY25, forecasting EPS growth of 28%."
Will move quickly when buyers come in. Less than £10m free float
I believe that’s a fair estimate. For sure it’s undervalued where it is now. It’s just a case of waiting patiently for confidence to be restored, and the share price will mirror that. This is a good solid company that is actually making a profit, and paying dividends. A rare find nowadays..
Two large sells printed from yesterday afternoon.
No sells today.
Will slowly creep up now. Massively oversold
Another low volume day, but looks like the bottom may be in, and started to move north in the last few hours of the day.
Some good buys going in today. Chose the right time to top up 👍
At just under £1.30
A £42m mcap for a company that has just posted a £9m PBT
Good luck finding another company that can boast an mcap only divisible by 5 years PBT.
Comfortably an upside of 40-50% here.
P/E under 5 is absolutely bonkers for an emerging company in a growing market.
Clearly a large seller at play - top up time again tomorrow!
Hope you are right, Mitesh Dhanak needs to build back some trust after that, and his nomad need the sack for letting that RNS go through. Sneaky, very sneaky
It was bad form, and the share price was punished. However, taking into account adjustments, this is hugely undervalued. Confidence does not to restored though, and only the bod can do that.
personally i'm a bit worried that the ceo is full of it, it's difficult to trust a word he says now.
hiding this in the bottom of the trading update was a real ******s trick, giving people who have access to the brokers report a massive advantage and opportunity to sell before the **** falls out of it.
he did well selling £1.8 million worth of shares in december before this profit warning, hidden as a positive update.
" the mix of energy
projects in fy24 are more heavily
weighted towards higher value and lower
margins with revenues to be ahead of our
expectations with high-single digit pbt
margins. based on client programmes,
we expect to revert to a more normal mix
of projects and margins in fy25. "
Must be out soon surely?
Use the market cap as your ‘p’ and the pbt as your earnings ‘e’. So as the mcap drops the ratio reduces and if there is an expectation of increased earnings the ratio drops again. Then compare to expected p/e for this sector.
You would think the Ceo would be buying down here.
Can’t buy many companies of this quality at this price
I've bought some more at 1.35
PE ratio miles away from true value here.
Normality will return.