Utilities

Utilities equity research

Explore the most viewed and latest equity research and media content for companies within the Utilities sector. Companies within this sector provide services including electricity generation, water, gas and multiservice utilities.

01 Apr 20

Net cash position supports near term outlook

Today’s year end update highlights that FY20 trading was broadly in line with expectations. The Group has experienced a reduction in demand over the last week as a result of the implementation of more stringent lock down measures. In response, management has postponed all non-essential work, furloughed staff, and deferred 20% of the pay of employees who have not been furloughed, including management. These actions have materially reduced the monthly overhead. The update also confirms receipt of £16.8m of proceeds for the asset disposal, leaving the Group with a cash balance of £5.6m (pre-IFRS16) and no debt. We believe the Group is very well positioned to navigate the impact of COVID-19 and well placed to benefit from a more positive medium term outlook as the market backdrop improves.

Companies: Fulcrum Utility Services

30 Mar 20

Cenkos: OPG Power Ventures Plc -- COVID-19 Update

The Indian Government and Reserve Bank of India has announced several relief packages to combat the adverse impacts of COVID-19 and the lockdown implemented last week. The lockdown encompasses all non-essential industries and has resulted in OPG's industrial customer shutting down operations and reducing their short-term demand levels. As a result of the current market uncertainty, we are withdrawing our forecasts from the market and move our recommendation to Under Review until macroeconomic conditions stabilise. We believe OPG's strong portfolio of customers from diverse industries will enable it to quickly revert to normal operating levels once the situation improves.

Companies: OPG Power Ventures

01 Apr 20

Cenkos: Fulcrum Utility Services Ltd -- Progressing until coronavirus hit

There are signs of Fulcrum's recovery through H2/20E in today's update, but the UK's shutdown in response to Covid-19 has now put progression temporarily on hold. With the majority of projects currently delayed, trading over FY21E is likely to be adversely affected. The group's recent asset sale to ESP was opportunely timed, securing balance sheet strength to ride out the disruption. Given the current uncertainty and removal of FY21E guidance, we place our recommendation Under Review.

Companies: Fulcrum Utility Services

27 Feb 20

Powering through

Drax reported a set of FY19 results which were in line with expectations. EBITDA increased by +64% to £410m and EPS tripled to 29.9p (5% higher than the consensus at 28.4p). The proposed dividend is in line with expectations (15.9p). The main contributor to this growth was the Production division (+52% in H2) on the back of a slight positive volume effect (pellet production was up by 4%) and a reduction in the costs of production by 3%.

Companies: Drax Group

13 Nov 19

H1: increase in the EPS guidance

SSE realised a good set of H1 19 results, driven by new renewables capacity and favourable weather conditions. However, the transmission and distribution activites decreased sharply, but were partially compensated by the good results in gas distribution. The group increased by 3.6% the mid-point of the FY20e EPS guidance.

Companies: SSE

23 Feb 16

Results heavily impacted by falling power prices and LEC removal

Weak results for the group, as revenues increased 9% yoy to £3,065m but margins contracted pushing EBITDA to a 26% yoy decrease, reaching £169m, falling 2% below expectations driven by the the removal of the LEC _(Levy Exemption Certificate)_ subsidy and decreasing power prices. The adjusted EPS decreased by 52% yoy to 11.3p and missed forecasts by 8% given also that there was top-line pressure as the group had higher depreciation expenses linked to the biomass investment. On a reported basis however, EPS reached 14p (-56% yoy), being better than expected due to one-off gains on derivative contracts to hedge on forex movements and lower prices. Net debt doubled within a single year to reach £187m, which is 50% higher than forecasts as capex is above expectations, reaching £183m (although it decreased 10% yoy), despite an improvement in operating cash flows and a £134m cash position. The dividend proposed at 5.7p is in line with expectations and represents a 50% payout of the adjusted EPS. Concerning guidance, the group has confirmed a challenging outlook for 2016 driven by the continued pressure on commodity prices and the loss of LEC subsidies. The group should concentrate on cash flows rather than earnings with additional cost cutting and capex measures expected.

Companies: Drax Group

14 Jan 19

Opportunity knocks

We are introducing our Best Ideas for 2019 and also review the performance of last year’s picks. We suggest ten solidly financed stocks with good business dynamics that ought to be considered for core portfolio holdings and six UK domestically focused stocks that our analysts believe should perform strongly in the event that uncertainties unwind. We also introduce a new style of research from N+1 Singer which presents a Company’s dynamics and metrics in a clear and concise manner and concentrates on the pivotal issues affecting that Company and an investment decision.

Companies: BCA CLIN CLG CBP DNLM EAH STU FCRM FUTR GTLY INS GLE NICL SDL SPR TRI

01 Oct 19

STATE OF CHARGE - INVESTMENT OPPORTUNITIES IN EV CHARGING

Government bans on new fossil fueled vehicles in many major economies are likely to drive significant growth in electric vehicles (“EVs”) over the next twenty years. This will create growth in electricity demand from EV charging. The volume of energy to be supplied creates opportunities for both supply companies and generators and the provision of charge points is already creating a new industry. However, the timing of this demand puts pressure on local distribution infrastructure. While smart charging and vehicle to grid technology offer solutions, we believe these will only be partial given likely charging behaviour and as a result there will be demand for additional grid capacity and for other solutions. These other solutions include charger located storage and distributed generation.

Companies: CNA NG/ YU/ DRX GOOD RED SMS IKA AFC

04 Mar 20

Expectations reiterated; Asset sale unconditional

Fulcrum has confirmed that it has met all of the conditions associated with the ESP asset sale, which is expected to complete in FY20. The deal will significantly strengthen the balance sheet, generating £17m of initial proceeds, with further significant proceeds to follow as the order book is built out. The Board also confirms that it expects FY20 trading to be in line with expectations, implying a significant bounce back in H2 trading (FY20E EBITDA of £1.4m/£3.6m in H1/H2). The outlook is supported by recent contract wins (see below) and further profitable growth is expected in FY21. We expect this improvement, alongside the value generated from the ESP deal, to provide positive catalysts for the shares.

Companies: Fulcrum Utility Services

21 Feb 19

OPG Power Ventures Investors Overview

09 Dec 19

Executive interview - 2G Energy at EKF 2019

09 Nov 18

Executive interview - ERM Power

12 Jul 16

finnCap - Initiation of coverage, Fulcrum

Premium

12 Jan 17

Capital Network's Stacey: 2017 is the year Mytrah Energy will unlock value

24 Sep 15

Armadale Capital - Remains on track for commercial production in H1 2016

10 Dec 18

Executive interview – 2G Energy

03 Aug 15

Developed process route for gold recovery

23 Nov 16

Armadale Capital - Full assay results confirm exceptional high-grade graphite deposit

10 Oct 16

Armadale Capital - Project Update

26 Mar 20

EQTEC PLC's David Palumbo talks strategy and new ewerGy deal

10 Sep 15

Armadale Capital - Interim Results

09 Jul 15

Armadale Capital - Landmark agreement

08 Jun 15

Armadale Capital - Agreement to fund and develop the Mpokoto Gold Project

26 Oct 16

Armadale Capital - 85% strike rate from drilling Tanzania

Latest Content

Cenkos: Fulcrum Utility Services Ltd -- Progressing until coronavirus hit

Fulcrum Utility Services

01 Apr 20
-

Net cash position supports near term outlook

Fulcrum Utility Services

01 Apr 20
-

Cenkos: OPG Power Ventures Plc -- COVID-19 Update

OPG Power Ventures

30 Mar 20
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EQTEC PLC's David Palumbo talks strategy and new ewerGy deal

EQTEC

26 Mar 20

Resilient business model and generous dividend

The group confirmed its good progress over H2. The FY19 figures are perfectly in line with the guidance and our estimates. So good news, but expected. The group did not provide any specific details concerning the impact of COVID-19, but the overall impact should be limited as the guidance is roughly in line with our figures, and the group expects its dividend to grow by 5% per year up to 2022. Positive view confirmed.

E.ON

25 Mar 20
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The impact of COVID-19 on FY20 is expected to be limited

Good but in line FY19 figures. The positive comes from the FY20 guidance, as the group stated that the impact of COVID-19 should be limited. EBITDA and net income guidance are above our figures (which were adjusted on 12/03/19 on the back of COVID-19). Moreover, the group confirmed its dividend policy. Positive view confirmed.

Enel

19 Mar 20
-

FY19 as expected

Good growth in FY19, but in line with expectations. Growth was supported by a higher achieved price, and favourable weather with a hydro coefficient 7.4% higher than in FY18. EBITDA increased by 37% to €1.2bn. Mechanically, the adjusted net income increased by 60% to reach €0.5bn. Net debt was down by 12% to €2.2bn. In line with the 40-50% pay-out policy, the proposed dividend is €0.69, the current yield is then rather low at 2.1%.

VERBUND

18 Mar 20
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Small Cap Feast

Abal Group (formerly on AIM) to relist as Supply@Me, a growing innovative "inventory monetisation" platform, having originated more than EUR300m of prospective "inventory monetisation deals" in its first six months of operating (to June 2018). In the first half of 2019, an additional prospective EUR300m was originated. As at the date of the publication of the Prospectus and Circular to Abal shareholders, dated 4 March 2020 , EUR972m of prospective contracts have been originated. Raising £2.2m. Due 23 March. The Proof Of Trust has announced its intention to list on the Standard Market. The Blockchain based business, owns patents to a protocol which facilitates dispute resolution based upon smart contract disputes. Transaction details TBC.

ALTN EQT WSG DUKE RED IHC GRL TMO VAST BST

17 Mar 20
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Disappointing outlook

Having revised its EBITDA and net income guidance upwards, the group was able to reach the top of both. EBITDA came in at €2.1bn and net income was €1.2bn. Growth was driven by the same elements as in the first nine months: one-offs and M&A, which remain in the background given that most of the group’s valuation is based on renewables. The €2.7-3.0bn EBITDA target for FY20 is below our expectations. We confirm our negative view of the stock.

RWE