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I see your point, but on the Corporate side this could help sway many tenders their way as many will offer similar on price, but this maybe cherry on top. yes the large ones are fewer in number but can typically earn 50k to 100k+ on the procurement side and are more sticky once signed. and even just 20 signed at 50k is an extra million in the bank etc...pricing is still too undervalued at todays 33p prices and is why i went i spent another 50k on them last week at 28p.
same here..just bought a nice chunk earlier today
Having read the full transcript here are my thoughts for what they�re worth...With current market cap of just �20mll then even when incl debt, aside from all the non-cash deductions etc if you shut up shop tomorrow the value of income still to come in, far exceeds todays value. Therefore as below zero value is being applied to a business which either as is or stripped down further, could generate say �5-8mll profit easy p/yr then 26p is a no-brainer� which is why I have spent another �20,000 this week on UTW shares. MAJOR Positives � Having the Banks relaxed is a as they know the current figures/numbers etc. � There is a large �mll+ Positive figure not included in the Figures but still to filter through. � There was a �100mll order book, which would cover all debt and share value etc and leave large surplus if stopped tomorrow. � They have high and consistent client retention rates at say 80% �.being in this industry�I can�t emphasize enough the importance of this as it again means if as a very worst case, if you only focussed on retention you would have a VERY sizeable future and predictable client list to rely on even if the rest of the business went tits up. Only negative for me is on Internet of things side, I would take that with a pinch of salt of its eventual likely added value as I can�t see this adding any noticeable difference to the EBITDA as only big users are interested and expect the margins to be very small as there are many in that area already�..I know from having dealt with major FTSE-100 energy users and so fully understand the nature of the same client types as in their Corporate Div�
i've just bought another �10k at 35p....tried to get �20k but wasn't available...which is a good sign. the 5% by SL shows it was only just under 5% before, but at least they are increasing, which is another good sign of Institutional confidence on what is now only a �25kmll market cap...more upside than down.
i thought the same but suspect they are in a closed period until full reports are published. in which case they would be legally unable to buy any until that point.... lets hope thet buy some when they can, soon after publishing. i think with much more buys than sales (minimal sold today) speaks volumes and goes back to what we have been saying...massively oversold and we have the banks on board which was for me was the biggest hurdle/risk, which has been removed.
ATTN Directors of UTW AS it is your staff who have over-egged the figures to cause this mess, it should be your responsibility to us shareholders to make good on the profits we had believed upon which we invested. Therefore UTW should cut its cloth accordingly until we as shareholders get the profits back to �10-ml+ p/yr. So the following is a fair basis for the current circumstance and is logical for the next couple of years. Aside from the 70 staff reductions already made (assume save �4,000,000 yr) then also Excl Europe and Corporate, if you removed another 170 from Enterprise that will may bring a further saving of perhaps �10,000,000 yr simply by removing layers of BDM�s, middle managers and those with the lowest retentions or sales. Assuming 170 (to cover new Sales, Eur,Corp) then you would still have 200 focused SOLELY on client retention of the 10,000 customers who renew each year..(to ave just 1 retention client each week each) and the business reduces the cost base by �14mll instead of just �4mll. Surely this alone should equate to �10mll extra profit!! This way also ensures the best staff are retained and who stand to gain from more renewals and you still have the best 50 for new sales..so until the business can afford�.FOCUS on RETENTION to get our profits back. If other shareholders agree with this logic please reply.
Because the industry is about apathy and better the devil you know. By default even if many other brokers offer a similar price they will sign via their current broker. Even when you offer lower prices they will often revert to their incumbent broker. Yes some are fickle with no loyalty and sign with whoever, but the LARGE majority will sign with the current broker and supplier. This same logic applies with the energy suppliers some have 95% retention (were they always lowest for the 95%.....of course not)..so by and large if UTW are doing the �shopping around� and providing a list of supplier choices, they will generally pick one from that list�.that�s how it works in this industry�..and if I am not best placed to answer that, then no one else will be. Therefore the value is in the client base of repeat business and it takes a whole lot less staff focussed just on retention...
as only �80k sold with more than x3 buyers to sellers, it sounds like others have my same train of though that the price was already battered to reflect it. for those who have sold, then National Grid is at the other end of the spectrum....as near to a certain FTSE business & with a 5%+ div (with yearly increases)...,,a share price bottomed with more upside than down.....and stands to benefit from any market correction as people then flock to safe havens.....so i see any bought now can bank a growing 5% yr div and a 10%+ incr in share price in next year....good luck all
with the share price dropping from 275p 3-yrs ago and from 175p just 12-mths ago, the price has already factored in shit results and restatements. it also said no impact to cashflow and even though it has �20-mll debt and covenants..it will still be making large enough profits to service debt or pay it off if taken private. so with the current valuation of �37 val with �20 debt i say they take it private and on a higher price or focus on retention so it makes �10-mll year profit with less staff (even after adjusting from the 18% to 25% in contract values.) to ge the share price back to 100p+
hi billyray.it doesnt work like that. The Estimated Annual Quantity is what the old supplier tells thhe new one....it isnt broker involved just as gas is from Transco.. so most falls into industry privided or billing related..the �7mll cock up should have been a one off from a supplier who tried that method but clearly got burnt fingers...i can only say based on my experience which is across many thousands of meters if that helps..
because suppliers don't trust brokers to estimate their own figures for this exact reason. one stupid supplier clearly did and learnt their lesson, but reconciliation happens all the time...some its mid-term, some its annually and most only pay based on Actual billed usage and so don't have a need to reconcille. in the real world you should only get caught out with lower billed usage than forecast when the has usage was based on a previous colder winter...so you end up with a lower income versus forecast...but even that is just an internal issue and just needs the estimate for the remainder to be revised downwards...but remember on recent figures they have already lowered all forecasts to 80% of the orginal deal...so it should really be covered off as they have stated..
Hi� I see your logic but they already identified back in June that 90% of est usage was based on reliable forecasts such as historical, billing etc. Also any claims or representations from other suppliers for the same logic would have been known by then and so announced by their Aug release. Independently this also makes sense as a large chunk will be for gas and that is based on Transco historical (reliable)..their Corp side will all be based on actual (reliable) and many suppliers would have paid on a �-per deal basis (so no clawback poss)..and many others based on supplier EAC (reliable). Ironically I have just picked up one of their 5-yr deal clients and whilst they still have 3-more years of comm value to come from that deal�the usage on the deal is matching what is being used�
you would also have no sudden need for non-execs if taken private......coincidence......just saying???
Hi..i didnt say they had a good model or that they hadn't made a mess of it. my point was that even with all the problems and clawbacks and all the other points you noted , the order book and deals done since then would cover all that nonsense. therefore if taken private and trimmed down the staff and focussed just on retention, you would still have a business that had the ability to generate £10-mll profit..and in just my opinion, then the min value as a worst case should be 110p. i don't doubt you know more about the sme market as we rarely touched it, but unless your brokerage was also in the top 20 largest in the uk like mine was, then it wasnt by luck to be buying for 3,000,000,000 kwhs p/yr. the 5-yr is a valid note given shorter term deals are now the norm in the industry but is only an issue if you dont have a high retention rate. is it a mess...yes...but is it worth more than 49p as a simple buyout....yes
commissions....although they indicated that the problem deals were just a small portion of the business it is likely that as this was simply down to the kwh usage estimate being too high, if they simply placed more of their target value of the deal into the standing charge then whatever £ portion is on the SC is then fully certain for the full length of the deal. on the other suppliers, they will mostly self-bill based on actual kwh usage so it is always easy to see if the forecast values are on track or off and can be easily adjusted for any remaing or accrual figures for any materially out..to bring back in line. for other suppliers that are based on set portions at key points during the deal, that will be based on contract figures but then reconcilled on an mostly annual basis..so you will rarely be to far in front even if you have over egged the usage figure for the deal. overall, their logic and findings seem consistent with how it works, which should underpin any existing or new deals as being reliable. bought some more at 50p....bargain...good luck all...
Here is my take on it for what its worth..and only my opinion., although for relevance i have though earned seven figures from this industry and still in it now with a £100k+ investment in UTW. i saw it undervalued at 90p, so i see todays price as way below any buyout price for this reason. Their own figures shows even after adjustments to 80% etc etc they had an order book of £46mll....so even if they shut tommorow that money is mostly certain. (on SME once the deal is done almost no other work is needed to get the money banked... only Corporate where added sevices such as bill validation or trading etc may be needed...but as they state the Corp side is only a small part of their pot). They have already shown they can gain value from value with less staff (625 down to 550) and so even if you simply acquired the business and assumed no new sakes staff and simply focussed on retention, then you could do that easily with say 150 staff as it is the new sales that is staff intensive...not the renewals. (also the previous churn simply cuts out the worst at sales,client relationships, people skills etc, the 150 would be the very best and you would have min churn and retention would increase)...for those doubting simply do the math, 40,000 sites with ave half being due for renewal each year..20,000 div by say 150...or even 250... its not a lot...and retention is all they would need to do...not new sales.... therefore as they seem to be adding £50mll of new singed deals every 6-mth (likely £25mll of annual comm but based on av of a 2-yr ave deal value (some will be 1-yr some will be 3-yr), then this means they could have added £36mll of new value on top of the £46mll already secured. the current value today incl debt seems to be only £60mll so i estimate that the current share price applies zero value to the business as it is now, even though it will likely have many sticky clients and likely a high retention rate, and has a stronger mgmt team who seem to have the bases covered and have identified previous failings and put measures in place etc to grow with more profit from less staff...so the share price seems to reflect zero to my worst case scenario of being taken private...even though it could easily bring in £10m++ profit each year for any new owners as a private company with no plc costs etc... have they messed up..yes...would it look better for the directors to buy some shares...yes..BUT for a value play and knowing this industry inside out and applying a worst case scenario, i can only interpret it as being a bargain price......so i am sitting back and waiting either for it to increase in price based simply on a future ebitda basis or from a buyout of some kind.