RE: Presentation26 Sep 2023 13:22
Sparks - all pretty much covered, can't really add anything of value. We will all have our individual ideas.
I got what I wanted "Looking for adjusted eps for the half of over 50p, 60p would be nice - hence, putting full year expectations north of 120p" Revenue was a below my thoughts (£210m - £220m), gp% held up well, and bad debt was less than I was expecting (5.5 - 6% range, despite the implied 2%). General overheads / staff a bit higher than wished. Very clear statement that full year will exceed £33m - note 'exceed'. Broker numbers now in line with that figure, but clearly room for a further revenue upgrade.
Very, very disappointed with the 'prudent' dividend. The report hints that acquisitions of other customer books now off the table, but for 'bolt ons' and Yu Smart is to be debt financed to leverage the annuity. Therefore, why hold on to the cash? Though I note a big cash outflow in cash collateral for supplies - seems in right range in total, about 1 month's worth of COS. I find this a strange decision. I like the fact they have disclosed the ROC payment number, so we know the real cash position, which is available. 58p eps, and they can't / won't even payout 10 to 20% (6 to 12p). Actually, I'm seething about the low dividend!
Share price reaction is also odd. I would expect at least a forward multiple of 10 times, even in bad market conditions. However, it is market makers who set the initial opening price, so there's a chance that if / when £10 goes an uptrend will set in over the next two months or so to lift the price to the £12 to £14 bracket. Volume is also low for a results / update day - probably due to lack of traders, due to little sp movement, circular effect. They will be waiting for the break out, ie over £10.
A lot of myths and lies around market makers, but one I perhaps believe to a degree is their ability to keep a price low or dip it, to tempt sellers in order to fill a sizable buy order. Who knows? £10 is appearing very stubborn. May be some large undisclosed sales to come later.
They are clearly re-evaluating their ambitions and targets going forwards re size of the business and margins. Organic growth in meters is very strong - but I expect the newer customers will be smaller in their usages, so don't extrapolate 50% increase in meters to 50% increase in revenue! Nonetheless, full year should be close to £500m (say £480m) and 2024 somewhere at £700m plus in revenue. Don't want to fall into the trap of too high expectations, being guilty of this in the past.
Again, a serious lack of publicity / marketing their story. However, I understand something is being planned in the near term. Hope so, with a chance to ask them direct questions - I have a few!
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