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Please don't ramp other sticks in here
Wrong board
Hi Nims,
With more and more acquisitions will the bubble burst?
I often ask mysef will the bubble burst?
And what is the end game?
Check these out Yu Energy if your into Energy very good money to be had!
Hi all, you all have put in some great posts to help me understand this company better. Sustainability is a huge thing and will get bigger as more companies start focussing on their ESGs. For me the continuous growth in revenue and asset value makes this a good investment. I have been sitting on the fence for a while with this one but with some good cash ins this year now I have cash to burn.
Good luck all but the fundamentals look good. For me any company that makes over £50m in revenue which I think INSE will hit during covid is a great company. GLA
Have they published 3 or 5 year profit targets?
It still should be higher. Even just based on next year earnings using sector PE of 17 and not factoring in obvious growth in green energy sector this should be at least 25p today. And thats with no future growth factored in beyond next year so could argule PE should be far higher than 17 even commensurate with a growth stock. To buy recent acquisition at PE of 6 looks cheap. So 25p min and when model sures up 30 to 40p in 12 mths?
Interesting interview with the CEO of this week's latest acquisition (Licker, in reply to your post INSE have already risen some 50% from the late 2020 lows, so it's begun to bounce nicely. It was seriously affected by the first lockdown, but as business gets back to normality there should be a lot more to come imho):
Https://businesscloud.co.uk/from-kitchen-table-to-potential-30m-sale-ceo-says-the-journey-goes-on/
Extracts:
“We’re delighted to join the Inspired Energy plc group,” he said. “Being part of the UK’s largest commercial and energy advisors will bring clear advantages of scale.”
The founders will remain with the business and the company will continue to operate independently under the Businesswise Solutions brand, with the same senior management team and under the leadership of CEO Durris."
"“Furthermore, we now have at our disposal, market-leading energy management tools and energy buying products, plus access to Environmental, Social and Governance (ESG) solutions.
“This range of solutions will allow our clients to deliver long term year-on-year sustainable energy management improvements and utility cost reduction for their businesses."
"Our capability has now been strengthened by access to a wider range of products, deeper level of resources and enhanced market position through volume of energy procured.
....Businesswise Solutions has over 340 customers, including Graham & Brown, DFS and Burnley Football Club."
This stock should be flying. Its in the right green sector with huge growth and investment plus tough gov targets. It PE is lowish on just next year. Its growing, landing contractsa and frameworks building a broad product offering. Its cut its cost base Everything seems right so why isn't it flying
A new interview with the CEO about yesterday's acquisitions FYI:
Https://www.proactiveinvestors.co.uk/companies/news/942856/inspired-energy-acquire-businesswise-and-general-energy-management-to-expand-customers-and--units-of-opportunity--942856.html
"Inspired Energy acquire Businesswise and General Energy Management to expand customers and 'units of opportunity'
Inspired Energy PLC's (LON:INSE) chief executive Mark Dickinson talks to Proactive London's Katie Pilbeam about their acquisitions of BWS Holdco (Businesswise) and General Energy Management (GEM).
Dickinson says this expands their number of customers and metres, which are 'units of opportunity'.
The firm's corporate order book has risen above £73mln as a result of the acquisitions, which are expected to enhance earnings in fiscal 2021."
Most good deals have deferred consideration. The fact that so much is deferred and so contingent makes it a good deal especially when they only pay 6 times earning if the hight targets are met. Inspired are valued at over 12 times sney other listef business into high 20s so it looks a great deal. Payout 6 times but get over 12 times on shareholder value!!
I did ‘get it’ earlier. Just seems a rather odd arrangement. £6 million now and maybe a further £23 million in 2023. If you loan me a quid I’ll give you a fiver on Friday. Hopefully it will work out for everyone but just looked a bit Iffy at first sight.
Shore Capital have now increased their forecasts - they now see 1.27p EPS this year.
The current year P/E is now only 12.99 at 16.5p, with a decent 2% or so divi yield:
Https://www.proactiveinvestors.co.uk/companies/news/942811/inspired-energy-announces-complementary-acquisitions-942811.html
Extract:
"Inspired’s house broker Shore Capital estimated the transactions, based upon a 10-month contribution, will enhance Inspire’s adjusted profit before tax this year by about £1mln and increase earnings per share (EPS) by roughly 7%.
As a result, it has pencilled in 1.27p for its EPS forecast this year, up from 1.19p previously.
“As the economy recovers from the impact of the Covid pandemic, Inspired is trading on a revised FY2021F PER [price/earnings ratio] of 12.4x (EV [enterprise value]/EBITDA 9.0x), offering a progressive dividend yield of 2.3%. With recovery out of the pandemic set to emerge, Inspired is poised to benefit, in our view, delivering essential services in energy assurance and optimisation as well through its emerging ESG based compliance platforms,” Shore said."
OT : apologies if this is posted twice - the first one isn't appearing on my timeline for some reason!
Shore Capital have now increased their forecasts - they now see 1.27p EPS this year.
The current year P/E is now only 12.99 at 16.5p, with a decent 2% or so divi yield:
Https://www.proactiveinvestors.co.uk/companies/news/942811/inspired-energy-announces-complementary-acquisitions-942811.html
Extract:
"Inspired’s house broker Shore Capital estimated the transactions, based upon a 10-month contribution, will enhance Inspire’s adjusted profit before tax this year by about £1mln and increase earnings per share (EPS) by roughly 7%.
As a result, it has pencilled in 1.27p for its EPS forecast this year, up from 1.19p previously.
“As the economy recovers from the impact of the Covid pandemic, Inspired is trading on a revised FY2021F PER [price/earnings ratio] of 12.4x (EV [enterprise value]/EBITDA 9.0x), offering a progressive dividend yield of 2.3%. With recovery out of the pandemic set to emerge, Inspired is poised to benefit, in our view, delivering essential services in energy assurance and optimisation as well through its emerging ESG based compliance platforms,” Shore said."
Pe ratio of 6 on 5m profit 30m paid so seems good deal
Please give yourself a little education on earn out deals instead of making youself look a bit silly through your ignorance
Have you never heard of an earn out deal before? They are very common. Read up on them you might learn something
The acquired company Businesswise "would be required to generate EBITDA of £5.0 million for the year ending 31 December 2023 and have a closing order book in excess of £19.0 million" to achieve the full consideration.
Which would make the acquisition a bargain even at the full consideration.
Did I read correctly ? A challenging target by 2023 I’m sure, but up to £23 million in cash. Maybe Businesswise know something INSE doesn’t or perhaps the deal was concluded in a Blackpool Wetherspoons.
Excellent news - two new acquisitions which are expected to be earnings-enhancing this year....
These will add almost £1.4m to PBT, and bring the Corporate Order Book up to a whopping £73m. Importantly, most of the consideration is deferred to encourage future performance.
And of course there are big opportunities for cross-selling too:
Hhttps://uk.advfn.com/stock-market/london/inspired-energy-INSE/share-news/Inspired-Energy-PLC-Acquisitions-of-Businesswise/84481893
Strategic Equity Capital state in their H1 results today that they have bought into INSE as a new position in the period, and INSE have now become one of their top 10 holdings:
Https://www.investegate.co.uk/strategic-equity-capital-plc--sec-/prn/half-year-report/20210302070000PE8C7/
"Inspired Energy
Description
Is a leading UK B2B corporate energy 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 Energy 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; we believe these deals will be attractive financially and strategically. Although the company's revenues remain depressed due to lower corporate energy usage in 2020, there is significant opportunity for a rebound in revenues, and in the share price, when there is a return to a more normalised environment.
Developments in the period
Interim results were in line with expectations, although trading remained weak due to Covid restrictions over the period weighing on corporate energy usage. The core corporate division experienced a modest 5% organic decline in revenues as a result, although cash conversion and order book progression was good. The non-core SME-focused division, which represented less than 10% of group revenues was weaker, and in November the company announced that they had sold this part of the business to the management team for £10.5m. Strategically, this is a positive development and is in line with our investment thesis. The company remains well capitalised and well positioned to drive growth and execute further M&A once market conditions normalise."
Strategic Equity Capital state in their H1 results today that they have bought into INSE as a new position in the period, and INSE have now become one of their top 10 holdings:
Https://www.investegate.co.uk/strategic-equity-capital-plc--sec-/prn/half-year-report/20210302070000PE8C7/
"Inspired Energy
Description
Is a leading UK B2B corporate energy 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 Energy 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; we believe these deals will be attractive financially and strategically. Although the company’s revenues remain depressed due to lower corporate energy usage in 2020, there is significant opportunity for a rebound in revenues, and in the share price, when there is a return to a more normalised environment.
Developments in the period
Interim results were in line with expectations, although trading remained weak due to Covid restrictions over the period weighing on corporate energy usage. The core corporate division experienced a modest 5% organic decline in revenues as a result, although cash conversion and order book progression was good. The non-core SME-focused division, which represented less than 10% of group revenues was weaker, and in November the company announced that they had sold this part of the business to the management team for £10.5m. Strategically, this is a positive development and is in line with our investment thesis. The company remains well capitalised and well positioned to drive growth and execute further M&A once market conditions normalise."
They really need to be on CCS framework then they can sell to any government funded org
INSE have won a place on a £510 million framework contract running for the next two years, as one of 19 suppliers.
Per this morning's Contract Notice, the framework is for Coventry & Warwickshire NHS Trust for energy related consultancy, energy management etc until Feb'23.
There should be quite a lot of work to go round, even between 19 companies!
Https://bidstats.uk/tenders/2021/W08/745472040
I cant work out if it's a big buyer or a big seller in the market here.
Lots of small(ish) sells then up pops a big buy every now and again. On balance, I reckon there's more likely to be a big buyer as all those sells aren't having a detrimental effect on the sp.
Interesting times, anyhow.......
Encouragingly, online I can now sell a large amount of shares at a big premium to the bid price at 15.95p, whilst I can only buy shares at 16.44p, almost the full offer price.