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.

Utilities equity research

27 Jun 17

Machinations

We recently hosted our annual Industrial Technology dinner with 14 companies, many of which are active in the materials science arena; having focused previously on composite materials in the aerospace sector, in this edition of Machinations we focus on graphene, with its unique and potentially game-changing qualities and potential applications. Investments in this area remain fairly early stage, but could potentially reap huge rewards. Graphene is well represented in the UK small-cap market by several players.

Companies: SIXH DSCV AXS AMPH ALU AEP AVG CAPD CAR FENR FLO GINV GHH HDD HAYT IOF MPE RE/ RED RNO RBN SOM SCE TRI VANL ZAM TRT

24 May 18

Strong performance from quality – 11 focus stocks

We have refreshed our quality style screen for the second time and report on style performance since the last refresh in October. Performance has been very strong, outperforming the small-cap index by c.1600bps (weighted basis) and c.1000bps (unweighted). There has been volatility with the market and this style has yet to be tested in a concerted down market, but in a flat or rising market quality appears to be a successful investment style in small-caps. We have highlighted 11 focus stocks in the new screen and will report back again on performance when we next refresh the screen in about 5-6 months’ time.

Companies: LIO GHT AMO CHH ZYT DOTD GTLY RIV FCRM TAM PAM

02 Jul 18

H1 Review

Best Ideas - 2018 H1 Review

Companies: SAA VP/ GLE AMO IOM HSP CVSG EKF PGIT VRP RLM AVG SOG DNLM SFR YU/ CBP

27 Oct 17

Machinations

Highlights this quarter: Economics: Generally, the data points to modest growth continuing, with a more positive trend in PMI surveys suggesting decent m manufacturing momentum over the next six months. Currency weakness continues to be a double-edged sword for U K manufacturers, with exporters gaining competitiveness while input prices have risen. There has recently been a divergence of sterling’s performance against the euro and the USD. Those in commodity or competitive product areas may well have seen margin erosion, while many in intermediary goods have already passed on price increases to their customers. With low unemployment, the prospect of tighter labour markets post-Brexit and public sector pay caps starting to come off also signals the potential for some labour inflation, long absent from the UK industrial scene. Topic of the quarter: We believe that powerful macro and sectoral pressures will drive further significant changes to the manufacturing supply chain over the next few years. We investigate some of these pressures, with the move to outsource suppliers to low- cost centres, like China, now seeing a slight reverse flow with some restoring to shorten complex and often inflexible supply chains. We see systems technology facilitating greater supply-chain control and efficiency. Brexit will present challenges to the UK supply chain with price and time to market barriers likely to rise, presenting challenges to the UK’s highly integrated and time-sensitive supply chain. Slick distribution infrastructure and greater information sharing with suppliers are likely to prove winning strategies in optimising logistics and gaining stock efficiencies. Sector valuation: The industrials sector has continued to exhibit strength, with small-cap industrials outperforming by 2 % on last year and larger cap industrials by 17%. Currency and improving economic data have been a positive for the sector. While some other sectors have seen a pick-up in profit warnings over recent months, industrial technology companies have announced generally positive or in-line trading updates that have helped to drive the small-cap Industrials to an EV EBITDA of 8.4x and a P/E of 16.7x with the traditional small-cap discount narrowing.

Companies: SIXH DSCV AXS AMPH ALU AEP AVG CAPD CAR FENR FLO GINV GHH HDD IOF MPE RE/ RNO RBN SOLI SOM SCE TRI VANL VEL ZAM TRT

29 Jun 18

Delivering further strong profit growth

We update our forecasts for the FY18 results, leaving our PBT forecasts unchanged. We also introduce a new FY21 forecast, which implies EPS growth of 9%. Fulcrum’s shares have performed well since our detailed initiation note on 10th May, increasing by 11%. The shares are trading on an FY’19 P/E rating of 18.3x (assuming a normalised tax charge), 11.7x EV/EBITDA. We believe that there is more to go for, with a positive outlook and continued growth in the order book. We are forecasting a PBT CAGR of 19% and an EPS CAGR of 7% (normalising tax charge) and expect ROE to be >20% p.a. over the forecast period. We retain our Buy recommendation and nudge our target price up to 81p.

Companies: Fulcrum Utility Services

04 Jul 18

Initiation and FY results

AMP is rapidly developing a unique portfolio of diverse operations across the distributed power market where market forces and regulation are positive drivers for growth. We resume coverage of AMP on the publication of its FY results, confirming a significant year of change for the group with trading seeing a strong step forward. Strategically, it has cemented its market position in the supply of wood fuels. In biomass project developments, the link with AMPIL provides annual development fees and a progressively rising carried interest. The recent investment in IncubEx is also exciting with other new opportunities being evaluated in a rapidly changing market sector. We introduce a price target of 135p with 28% upside providing a strong potential investment return.

Companies: Aggregated Micro Power

19 Jul 18

Calmer winds, higher gas and fiercer retail competition trim £80m off Q1 earnings

SEE released a disappointing set of Q1 results, hampered by poor wind conditions in early June, higher gas prices and warmer weather. The 97.5p dividend has been confirmed. The demerger of SSE Energy Services is still expected to be completed by year end.

Companies: SSE

08 Jun 15

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

12 Jul 16

finnCap - Initiation of coverage, Fulcrum

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26 Oct 16

Armadale Capital - 85% strike rate from drilling Tanzania

25 Nov 15

Armadale Capital - Update on the development and expansion of the Mpokoto Gold Project

24 Sep 15

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

10 Sep 15

Armadale Capital - Interim Results

10 Oct 16

Armadale Capital - Project Update

12 Jan 17

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

23 Nov 16

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

15 Feb 16

Armadale Capital - Update at 121 Mining Investment

03 Aug 15

Developed process route for gold recovery

07 Jul 15

Armadale Capital - Andrew Tunks: Key to a successful gold operation

27 May 15

Executive Interview - KTG Energie (German version)

09 Jul 15

Armadale Capital - Landmark agreement

Latest Content

ACP COG IOF SAV SSY

Morning Note – 20 September 2018

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20 Sep 18
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PTY PEG MWG

MORNING COMMENT

Inline H1’s generate double digit profit growth; drivers strong | Interim results illustrate a good performance and strong visibility | Interims – progress continues; FY expectations unchanged

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20 Sep 18
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Small Cap Breakfast

Green Man Gaming—pure play e-commerce and technology company in the digital video games industry. revenue CAGR growth of 26.7% in the last three years to £47.5m. Due 28 Sep. EBITDA Profitable. Offer TBA Crossword Cybersecurity PLC* (NEX:CCS)—the technology commercialisation company focusing exclusively on the cyber security sector is exploring its options in relation to a potential move to the AIM market of the London Stock Exchange which, if it were to proceed, would likely take place over the next few months. Kropz PLC-Intention to float by the emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa and exploration assets in West Africa

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20 Sep 18
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ACSO CLL ECK EKF EKT ERGO FUM RENE YU/

Morning Song

accesso Technology (ACSO LN) Positive first half, full year expected to be in line | Cello Health (CLL LN) Health driving performance | Eckoh (ECK LN) A good start to the year | EKF Diagnostics (EKF LN) Interims slightly ahead, outlook positive | Elektron Technology (EKT LN) H1 19 in line with recently upgraded forecasts | Ergomed (ERGO LN) H1 results: in line with June trading update | Futura Medical (FUM LN) Business update highlights increased focus on MED2002 | ReNeuron Group (RENE LN) Exclusive hPRC discussions stopped: talks renewed with other parties | Yu Group (YU LN) Continuing strong, sustainable growth and cash generation

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19 Sep 18
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ERM Power

ERM Power - Acquisition strengthens Energy Solutions

ERM Power has announced the acquisition for up to A$16m of Out Performers, a provider of energy services to large energy customers. This is consistent with a refocusing on core Australian activities, following the recent announcement of the upcoming US business disposal. We estimate the acquisition implies a P/E multiple at a large discount to ERM Power and <5% EPS accretion on a full-year basis.

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07 Sep 18
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United Utilities

PR19 business plan's first presentation

UU released and briefly commented yesterday on its PR19 business plan covering the 2020-25 period, which will be further detailed on 27 September at an analysts meeting/conference.

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05 Sep 18
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ERM Power

ERM Power - Upcoming US business disposal is positive news

In the context of the FY18 results (23 August), ERM Power announced its intention to sell US supply activities, which we view as very positive, as we expect this business to continue to generate significant negative profit and cash flow. On an underlying basis, FY18 EBITDA was 12% better than expected, while net income was in line with our forecast. On the negative side, the company moved from a net cash position to a net debt position as a result of cash outflows related to derivatives variation margins. Overall, we see the announcement of the US business sale as a major positive catalyst and expect the stock to reverse the negative share price performance since the US outlook downgrade at the end of May.

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30 Aug 18
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Armadale Capital Orchard Funding Group

Morning Note – 29 August 2018

Armadale Capital (ACP): Corp Progress update at Mahenge Liandu graphite project | Orchard Funding Group (ORCH): Corp Pre close progressing in line

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29 Aug 18
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BOOT IHC BRD PANR VRS PREM EQT PURE CDM KEFI

Small Cap Breakfast

Path Investments (PATH) -RTO of a 50 per cent. participating interest in the producing Alfeld-Elze II gas field located 22 kilometres south of Hannover in Germany. Offer TBA. Due late Aug. Kropz PLC-Intention to float by the emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa and exploration assets in West Africa

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