Adam Davidson, CEO of Trident Royalties, discusses offtake milestones and catalysts to boost FY24. Watch the video here.
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so why no movement in share price?ok its been over £1 but just as quick returned to where we are now
I have to agree with the NT's summary.
SUR is on an extremely low P/E, has a very healthy Balance Sheet with a £13.5m cash pile after the post year end CorEnergy acquisition, high revenue visibility from 3-5 year contracts, with a huge and fast-increasing order book....and there's huge ESG potential as the cherry on the cake.
As Shore Capital say, the valuation is "compelling" to say the least.
The Naked Trader said in his overnight update last night that he'd bought more SUR - and that it's now his largest holding.....here's what he said:
"I was amazed to see one of my biggest holdings Sureserve head down on results. I hadn't intended getting any more but the price was just too tempting.
This social housing energy services group is on a roll from results this week.
Operating profit is up 40% and net cash has grown to over £16m.
I think this is a great hold over the next 2-5 years. It is going to benefit from the current
energy transition agenda.
It looks like it will continue to use cash to acquire others and also has a high debt facility.
The downside is the lack of dividend. But seems to me this is fine and I would prefer it to use its cash to buy others. Given my new topup this is now my biggest holding.
For those of you who use researchtree, there is an in depth broker report on SUR today which reckons the shares are well undervalued and something I hadn't thought of which is a switch to hydrogen or other power sources could bring many new opportunities."
Capital Access have a new note out today:
They state consensus forecasts of 8.13p EPS to this September and 8.7p EPS next year. That's cheap enough, but there will almost certainly be more earnings-enhancing acquisitions from their £16.5m cash pile:
"Sureserve trades on an unchallenging 11.3x FY22(cons) PE, and 8.3x EV/EBITDA, which means we still think the shares are undervalued"
"Outlook
The outlook is underpinned by a large proportion of long-term contracts and frameworks in the mix, “blue chip” local authority clients, and growing trends towards use of regulatory services. Management is “confident for the year ahead”, and is “well positioned for further organic growth in a fragmented market”. Whilst
not quantified here, the opportunity to make acquisitions was once again re-iterated.
Sureserve is participating in 81 frameworks totalling £346.5m, and encouragingly, FY22 trading has had a strong start. 73% of expected FY22 revenue is covered by the order book, which is currently worth £527.1m, up from £335.8m at the start of FY21 and £333.2m at the start of FY20"
Good to see Investors Champion are very keen in their AIM market update this morning:
Https://www.investorschampion.com/channel/blog/upgrades-in-the-aim-sell-off
"Sureserve: impressive results
Sureserve (AIM:SUR), which now calls itself a social housing energy services Group, having previously been a compliance energy services group, announced excellent results for the year ending 30 September 2021.
Revenue rose c25% to £244.0m, pre-tax profit was 77% higher at £13.8m and basic earnings per share up similarly to 7.1p.
Operating cash inflow was an impressive £14.1m and the free cash inflow £12m, equating to a free cash flow yield of 8.1% at the current 90p share price and £148m market capitalisation, leaving year-end net cash a highly supportive £16.5m (2020: £9.8m).
Having experienced a near death experience three years ago, Sureserve’s swift recovery in the middle of a pandemic has been nigh on miraculous.
Despite the strong cash flow, we also like the company’s decision not to pay a dividend and conserve cash to invest in growth and acquisitions – if only other AIM companies would do this.
73% of 2022 revenue is covered by the order book, worth £527.1m at the start of the financial year, providing excellent visibility.
Broker forecasts for the financial year ending September 2022 were lifted to pre-tax profits of £16.4m and earnings per share of 8.2p (growth c14%). The 11x current year PE multiple therefore looks very modest (and there don’t appear to be any adjustments in forecasts), although prospective investors would probably like to know more about the make-up and risk in the current order book.
Look out for more 'bolt-on' acquisitions and disposal of non-core operations."
Cheers buysell!
Shore Capital have - they say "possibly conservatively" - raised their forecasts to:
this year : 8.2p EPS
next year : 8.9p EPS
On a P/E of barely above 10 SUR are "compelling" value per Shore.
To back this up Shore have also raised their forecasts for the cash pile - they now see £21.4m net cash at September'22 rising to £32.1m cash at 9/23.
Plenty of headroom for further earnings-enhancing acquisitions. And much better to go (in a responsible way) for growth than pay a 1% or so dividend which really doesn't impact half as much as profit growth will on the share price.
Yes very good indeed the results.
Thought for a minute you had left us.
Always nice to read you posts rivaldo
Terrific results ahead of expectations, and excellent prospects.
The adjusted 7.2p EPS (per Note 13) is hugely ahead of Shore Capital's 6.4p forecast.
The £16.5m net cash is also ahead of forecasts, and is around 9% of the m/cap in itself.
And this was achieved in a period when Covid restrictions were still in place......
73% of 2022 revenues are already in place - and the order book is up almost 50% year on year to £527m.
Great stuff.
I believe Monday should be an interesting day in the markets, prior to results. Hopefully it will sustain, 100p buy and sell. There is much positive news about new contracts and recurring business. One to tuck away for a while, IMHO.
at 104.5p and looking very strong before next week's results.
100p being paid to buy now.....
Here's the link to a contract award win for Aaron Services and Sure Maintenance from Wednesday - they're 2 of 32 suppliers for a North of England procurement framework worth £800M over 4 years:
Https://bidstats.uk/tenders/2022/W02/766705824
since the company became Sureserve.
But still very cheap imho - see posts below.
Andrew Hore, "interactive investor's award-winning AIM writer", has just revealed his five AIM share tips for 2022.
SUR is the first one on his list.....
Https://www.youtube.com/watch?v=gWSYmq3EJEs
"Interactive investor
21.3K subscribers
After some great success in 2021, interactive investor's award-winning AIM writer Andrew Hore reveals his best small-cap stock ideas for 2022."
Hopefully this consolidation phase is setting things up nicely for an upwards breakout in the run up to the prelims next month.
Christopher Mills (Harwood Capital etc) is very positive about Sureserve (30:05) here:
www.linkedin.com/feed/update/urn:li:activity:6879354290515841026/
www.youtube.com/watch?v=cG7_82WZdmc&t=2135s
More likely work in Sheffield for Sure Maintenance and Aaron Services amongst 38 named suppliers on these huge frameworks - a potential £150 million framework award and a further £65 million added as well:
hTTps://bidstats.uk/tenders/2021/W50/764805123
hTTps://bidstats.uk/tenders/2021/W50/764936205
There's a new Capital Access note out today.
Excluding last week's CorEnergy acquisition they forecast 7.7p EPS for the current year. But they have an interesting "rough and ready" calculation incorporating CorEnergy (which is a tad complicated to follow).
This indicates a combined 10p EPS for this year to 30/9/22 - a P/E of just 9.4.
Https://www.capitalaccessgroup.co.uk/research-portal#/portal/capital-access-group/
Great news for SUR's Everwarm in partnership with ScottishPower:
Https://www.dailyrecord.co.uk/special-features/scottishpower-ready-bring-smart-home-25648324
"ScottishPower ready to bring smart home solutions nationwide
New energy solutions like solar power, batteries and air source heat pumps, will transform the way we live
15:08, 8 DEC 2021
ScottishPower has become the first energy company to deliver smart home solutions to anyone in the country, wherever they live.
The energy company, the first integrated UK energy company to generate 100 per cent green electricity, has pledged to make it easier for customers to become greener.
With a raft of new energy solutions on offer, including solar power, batteries and air source heat pumps, ScottishPower hopes to help households take control of their own carbon emissions at a time and pace that suits them.
Chris Carberry, Smart Solutions Director at ScottishPower, said: “We want to help every household make the switch to greener, smarter energy solutions.
Being able to offer these new technologies, whether in combination or on their own, to eligible homes across the country is another step towards achieving Net Zero emissions.”
Partnering with Everwarm, one of the UK’s leading energy services provider, the energy company will provide an end-to-end service for customers taking them from consultation all the way through to installation.
As part of the initial consultation to evaluate the best solution for a household, potential new customers will also be provided with estimates on future energy bills, impact on their carbon footprint and made aware of the different finance options available.
As this new service begins to take off, with first installations expected in early 2022, it is estimated that the initial roll-out of these new green technologies could help support up to 300 new jobs before the end of 2025 as more people begin to train to become qualified installers and engineers.
etc"
'Sustainable energy solutions'.... clearly a growth area.....looks to be a good move
The company continues to be on the front foot, progressing nicely
Excellent - an immediately earnings-enhancing, and material in size, acquisition, bringing in £1m EBITA for just £5.9m initial consideration plus £1.6m deferred.
Plus it's hugely ESG-friendly, "providing multi-disciplinary capabilities across a range of energy efficient products, including: LED lighting/controls, solar PV, EV charging, battery storage and renewable heating solutions."
And senior management are staying with the group post-acquisition too. Looks very good news to me:
Https://uk.advfn.com/stock-market/london/sureserve-SUR/share-news/Sureserve-Group-PLC-Acquisition-of-CorEnergy-Limit/86752697
With their stake now above 15% it's great to see Slater continuing to buy as the share price rises, having added around another 900,000 shares:
Https://www.investegate.co.uk/sureserve-group-plc--sur-/rns/holding-s--in-company/202111191601330222T/
Good to see K&T Heating Services are one of the suppliers for two contract awards worth up to £145 million.....
hTTps://bidstats.uk/tenders/2021/W45/762708504
hTTps://bidstats.uk/tenders/2021/W45/762708468
And this morning we learn that Octopus Investments have been buying. They now have over 4%, with 6.6m shares....
Https://uk.advfn.com/stock-market/london/sureserve-SUR/share-news/Sureserve-Group-PLC-Holdings-in-Company/86565750
Shore Capital have today issued a 20 page note on "10 small cap winners from decarbonisation".
SUR is one of the stocks picked (alongside INSE, which I also hold).
Shore Capital forecast 7.8p EPS this year, rising to 8.4p EPS next year - with 2p and 2.5p dividends respectively. They conclude:
"In our view, Sureserve, which provides safety compliance services and improving energy efficiency for social housing clients, has increasingly strong ESG qualities including: Group activities being focused entirely on carbon reduction or health & safety; the Group itself became ‘carbon neutral’ in FY2020A, due to subsidiary Everwarm’s carbon credits; it employs 166 apprentices and has active community outreach initiatives."
The IC have just run their GARP (growth at a reasonable price) share screen across the entire AIM index.
Only five companies on AIM pass all seven tests. SUR is one of them. The tests are:
"? A PEG ratio in the bottom quarter of all stocks screened.
? EPS growth forecast for each of the next two financial years and an average
growth rate over the period of more than 10 per cent and less than 50 per cent
(i.e. high, but sustainably so).
? Either a return on equity (ROE) of over 12.5 per cent or an operating margin of
over 15 per cent (i.e. an indicator of a quality business that may have a sustainable
advantage).
? Either three-month share price momentum better than the median average or
earnings upgrades of 10 per cent or more over the past three months (i.e. recent
reasons to feel positive).
? Operating cash conversion of 90 per cent or more.
? Net debt of less than 1.5 times cash profits.
? A market capitalisation of more than £10m (i.e. not severely illiquid)"