The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Agreed, and I have topped up too.
As a recent investor (March24) in this stock I see value here too, that is in Sound, not in this BB...
I took mainly positives from the RNS so I've topped up, albeit it a small nibble as there are clearly some risks here.
gla.
Hi Shandy- I fully agree with your sentiment and I did the same, trading down some volume in the mid 7s, and I have recently bought back in..
I would be hopeful to see at least one decent win/RNS in the next quarter, but if not then the mid year results could be underwhelming. Considering the aggressive growth plans the BOD had (buy and build etc), I can't help but feel the EML sale put them back a bit, and that the remaining business might be sold also. That might be the only way we get an attractive exit on this stock in the near to mid term. We will see, gla.
It looks like 7p is the new floor, which is one positive we can take from this stock in recent months. I am not sure an RNS of a decent contract win will supercharge the SP, we will likely need something more profound than that.
Leaky ship. ;)
8p has been a firm resistance line for a while now. It looks like we will test that today and if we can push past 8p and it holds, we are on our way.
good luck all.
Simon Thompson article posted today.
https://www.investorschronicle.co.uk/ideas/2024/03/05/a-smart-energy-firm-that-could-double-its-revenue/
Technology-enabled energy services provider eEnergy (EAAS: 7.2p) has secured a £40mn project funding facility with NatWest over 12 years.
The group helps organisations achieve their net zero goals by designing, funding and implementing energy-efficient projects. The new facility will be deployed through a newly formed special purpose vehicle owned by eEnergy, which will become the operator and retain ownership in each completed project for public organisations. It gives eEnergy a unique, compliant off-balance-sheet solution for public sector customers, strengthens its competitive position in tendering for large multi-site contracts, lowers cost of capital, and delivers an attractive financial return on the retained project interests.
It’s a high-growth business. Analysts at Equity Development forecast a surge in eEnergy’s annualised revenue from £17.5mn (2023) to £30mn (2024), rising to £34mn in 2025. On this basis, expect cash profit (pre-central overheads) of £1.6mn (2023), £3.8mn (2024) and £5.1mn (2025). The transition away from ageing fluorescent light bulbs to energy-efficient LEDs is a key driver and one that is being accelerated by the 2023 ban on new fluorescent light bulbs. Analysts note that up to 20,000 schools have yet to implement the change, representing an addressable market of £1bn. The business is also benefiting from the rapid growth of eSolar projects, which account for 40 per cent of group revenue.
Last month, eEnergy sold its fast-growing energy management business to Flogas, a division of support services group DCC (DCC), and should end this year with net cash of £11.3mn. In addition, contingent deferred consideration (payable in two instalments) could add £10mn (capped at £20mn) to the cash pile within 18 months. Effectively, it means the operational business is in the price for £6.9mn as a standalone entity, or 1.8 times 2024 cash profit estimates (pre-central overheads). That’s harsh given that the energy management division was sold on a multiple of 6.5 to 8.5 times forecast 2024 cash profit to enterprise valuation.
I suggested buying the shares at the current price in my 2024 Bargain Shares Portfolio, and they continue to rate great value on a deep discount to my sum-of the-parts valuation (14.5-15p). Buy.
Fingers crossed Jsmyth. If the SP can stay north of 7.5p this week, a good presentation should hopefully see us punch past 8p and exhaust any final short sellers. We should then be off and running. hopefully... good luck all.
I suspect frustrated shareholders of legacy acquisitions are cashing in, muting the upside potential that the RNS deserves. eEnergy bought a few businesses on cash+ share deals with lock in periods, but those shareholders no doubt became unlocked when the SP was much lower. The decent uptick is maybe too tempting for some to hold on much longer. We have had a constant 'unknown' seller at 8p on the nose for some time now.
I think we will need another great RNS to really shake the tree further, otherwise I predict range bound movement of 7-8p over the coming months as these legacy holders offload completely. This has been the pattern (6-7p) over recent months, I just hope a 7p floor holds to stop new entrants looking for quick profits.. good luck all.
Hi K3v, "The presentation could very easily have been pulled due to this deal with NatWest coming to fruition, in which case, I forgive Harvey." Agreed. The BoD are experienced so the communication vacuum didn't make sense, and now we know why. Looking forward to the presentation. good luck all.
KTF, Davefrench post, Today 14:51.
Recent Sound investor here, averaging in at 0.8p, so I am happy so far. I am interested to understand why people think the SP will get close to 30p anytime soon? I see potential in this stock, hence my investment but surely 30p is a pipe dream (no pun intended...).
Exactly Shandy. Any shortfall in the YE EBITDA target will surely be more than made up for by the ongoing incentive plan, even if they don't reach the lower end of the £8-10m range!
They will be cash rich for a stock of this size, we just need to know what they are going to do with it. Then hopefully the AIM market might give this a more sensible SP. Anything
I agree Shandy. YE results lower than expected but this doesn't mean bad. I fully expect to really good growth again, once they publish their results... Also, there is another £8-10m due if EML hit their targets so on the face of it, it looks like a good deal all round. We just need some communication from the BoD on the plan going forward.
Yes I agree hught, I still think there is a lot of upside here. my curiosity on the metering shouldn't be seen as negative, moreso I am trying to understand what is left in the business to determine my exit plan. I am well invested here and as keen as anyone for this stock to prevail. BoD just need to communicate better and provide clarity and direction. Good luck all.
Absolutely Growthman, it is a key detail that investors like us shouldn't be unsure of. the metering is a key differentiator and whatever the reality, it is important that eEnergy still have access to it, either via outright ownership or through a CLA.
It isn't correct I'm afraid. The below extract from the RNS confirms the Company (eEnergy) has entered in to an agreement with EML (the disposed division) to allow them to licence My Zero. Why would they do that if they owned the metering company.
"The Company and EML will also enter into a cross-referral and licensing agreement (the "CLA"), under which the Company and EML shall cross-refer the other party's services to their own client base with a referral fee being paid for successful referrals. EML shall licence to the Company the use of MY ZeERO, including the right permit the Company to sell up to an agreed number of MY ZeERO eMeters per year to its client base. The CLA is for an initial period of two years, following which it may be extended further by mutual agreement."
This has been bothering me Hught so I have spent some time researching this, as you make a valid point about the metering business. If this remains part of the group then I agree with you and K3V that they have a USP.
I believe eEnergy insights is the ltd company of the metering business, and if correct, this has changed ownership to Flogas. I could be wrong though and if anyone can shed clarity on it I would be interested.
https://find-and-update.company-information.service.gov.uk/company/13286210/filing-history
Was the metering business not sold as part of the energy management division? If not, then I would agree with you.
Thank you K3V, you raise some interesting points. A couple of thing I need to respond to;
-I didn't say it failed, I said the buy and build strategy hadn't worked. Not just mere semantics, but facts. By offloading the higher margin EMaaS business, it suggests to me cross selling EaaS services to the acquired businesses didn't work. The primary reason for acquiring complimentary businesses. Indeed I think Harvey cites in the RNS that the sale is a simplification of their core business. This smacks of washing their hands of an unwanted division, imho.
-There are a number of lighting as a service providers operating in the UK, none of which had a energy management division underpinned by a credible software solution. eEnergy has now sold the family silver in my view and are lack real differentiators. I do not believe they will not be able to compete head to head with the bigger players in the sector. So I disagree with you that they have a USP.
This is what leads me to believe they will sell the services business also. Either that or they will delist.
As an investor in this stock, I hope I am wrong as you claim I am. Good luck all.