Member Info for moneyspider

Been thinking about how the election may help smaller suppliers. OVO Energy now valued at £200m and growing. Should see some short term value in TEP. Only to a max of 20% gain, IMHO. Still believe that the business model is not fit for purpose but sentiment will drive this higher.

Hi Guys, as you know I have been negative on this stock from the beginning because of the high share price. I now consider this to be a buy, especially at these levels. With a 10-20% upside.

As I have said before, I think that they have a flawed business model in todays environment. It has worked well in the past where customers have not really understood the true cost of the products that they are signing up to, but now with new entrants into this space, Government pressure, CMA review, comparison sites etc the pressure is on. Their new tariff is not competitive - I think that will massively have to reduce margin to compete, which destroys the value in the business.

Yes - the market is finally realising that their business model is unsustainable. Real push on now to get energy customers the best deal and disclosure of all the facts. I think like BG they will have a base of customers who won't churn but can't see a great deal of growth. They need now to move with the times and get more tangible products to sell - like smart thermostats, boilers etc. They might then be able to compete with BG, OVO and First.

Still waiting Goldenegg. Happy to wait a few more months and watch....

Looks like British Gas and SSE are marketing smart products to the home using their energy supply route. Does anyone think that Homeserve will build their own energy supply business - think that makes sense in the UK?

Indeed they did buy and yet the share price fell again. Now down from 1900 a year ago to 982 today. Pressure on all energy companies to reduce margins and prices. Can't see this ending well. I have always said that they need to change their business model to survive. The new entrants into this market are much cheaper on energy and will soon introduce telecoms etc (First Utility). Should move away from energy and get into smart products for the home.Looking for an entry point but would have to go much lower first.

ScottishPower have reduced their energy prices and are now cheapest in the market - you could save £250 moving from UtilityWarehouse to them. UtilityWarehouse will have to drop prices soon or lose market share. I can only see this shareprice falling as customers walk.

Sorry when I said UTW - I mean the Utility Warehouse. I do talk negative about this stock because I really believe that if you know what's going on in the energy / Telco markets then it does not take long to work out that each product they market is overprice against the competition. Elect / Gas is way overpriced. I'm am just pointing out that this stock may now be under stress as their model does not stack up for the future. The have done well building a customer base where they operate a friends & family referral concept. Just take the test go onto Uswitch.com and see where they rank for their products, I think that you will be surprised that they are not cheap. EON Energy have lowered their prices and now beat all the small suppliers, won't be long before all the big 6 are doing this. Once this happens the price promise guarantee will kick in and they will have to reduce the energy bills of their customers by £200 - effectively wiping out any margin in the business. They will need to change their business model.

Totally agree. Now that EON Energy one of the big six has launched the cheapest energy contract on the market. If you compare how much you are PAYING extra with UTW, can only see them losing market share. The margins are going out of energy and moving to consumer products.

ecovest - indeed they do. But with Margin tight in the energy market paying large commissions is not something that will last. Like the mortgage market where all commissions have to be transparent Ofgem will shortly make this a requirement for energy brokers. Once the commissions levels are disclosed customers will want to save money by going direct to the supplier. Commissions can be as high as £250 on an annual £2000 energy contract.

I agree this is an impressive set of results driven by commissions from energy suppliers. With the calls for Not for Profit websites to help customers change their contracts, the commission can only reduce. The Big Deal is running a commission free one for the residential market, it won't be long before this happens in the commercial market. I think that they need to change their business model.

Dubzy, The UW model relies on bundling of products, electricity, gas, broadband, mobiles etc. They do not own a Telco business so they are at risk to this being withdrawn from the networks as these businesses seem to want to move to a model of direct supply. If this happens then they will only have the energy business left and they are not competitive against the new suppliers, such as First Utility who now have as many customers as UW. Can't see where they go from here? The share price has peaked and has fallen back a long way, still some way to fall in my view.

With the Phones 4U administration, it's clear that major Telco's want to retail their own products - the white label is dead in the water. New energy companies now challenging - Frist Utility is over 1 million accounts and rising - also a lot cheaper. They need to find a USP.

Take a challenge - go to Uswitch, put in your details and compare all the services you have with UW. I bet you will get a massive saving by switching all services. Life is to short but Uswitch set it all up for you, so you can do this at a click of a button. Not cheaper than the big 6 - Scottishpower is cheaper. Miles more expensive than the cheapest energy provider, or broadband provider or Mobile provider. Only time will tell, but lots of new entrants in these markets and Government pressure to explain prices to customers. They will get found out!

The FD has exercised his options and sold at a price of 1400. Surely this sends a message? Why is he leaving his high paid role? Why would he not leave his shares in the company if he thought that they would go up? Or at least leave some of them - he has sold his entire holding. IMHO - there is something wrong and he is leaving before the @@@@ hits the fan.

BBC News reports fire at Ferrybridge C - Hope that doesn't cause their costs to go up and generation to go down?

I think that you should be worried about cash generation and debt. Anyone can grow customer numbers in a market where commissions are paid to agents and profit can initially look good, but it really depends upon how much cash they have to service debt and pay dividends over the long term. I was surprised that their CFO is leaving - I would wonder why? I'm sure only time will tell who called this right.

I just went onto Uswitch to check my dual fuel energy bill. The results were: cheapest £1165.06 per year compared to cheapest Utility Warehouse deal at £1286.31 that's £121.25 more per year. When people realise that these UW customers can save more money elsewhere their business model will fall apart.

I would normally agree - but I do question why the Directors and especially the CEO only bought a very small amount (£10k worth). Not even the ISA limit. This looks to me like they know they have problems delivering the technology. Why haven't the partners invested - if it is so good? Spent over £100m on this and got nowhere - all talk - where are they in and working?