Energy One Limited

ASX:EOL

Energy One Limited

ASX:EOL
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$5.51 (-5.7%)
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#18
Rank
33
Held by
60
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Reports (8) My Report Forum Investors
Forum Topics EOL EOL ASX Announcements

Pinned straw:
Scott
Added 9 months ago

Key points

  • revenue increased 23%
  • NPAT dropped from $1.2M to loss of $508k
  • organic growth is strong. They used to rely on one or two big projects per year. This is changing as they get cross-sell opportunities in Europe. Customers starting to see them as an integrated provider of multiple solutions
  • restructure will save $2M/year starting FY25
  • Labour costs increased substantially because salaries grew substantially and they wanted to invest for growth. Salaries were high in Australia because of the volatility of energy prices and profits on offer to other market participants in trading and operations.
  • learnt a lot from the STG 'mooted' acquisition. Close scrutiny of business helped them identify some changes to make.
  • Full year revenue is forecast to be $51M with $45M recurring.
  • Confident of return to material profitability but no forecast given.

Their summary of costs

On a statutory basis EBITDA of $3.3M was $1.7M lower than the comparative period. Whereas revenue was up $4.6M (on pcp), we experienced additional costs in the half, primarily related to:

  •  Investment in both existing and new staffing of $3M.
  •  Acquisition costs related to the mooted STG transaction of $0.4M
  •  Restructuring costs (explained below) of $1.1M
  •  Cyber incident (non retrievable) costs of $0.3M.
  • From a profit / (loss) perspective, additional finance costs of $0.2M and depreciation and amortisation of $0.3M impacted that result. 

Whilst the result is unwelcome, this hasn't changed my thesis or confidence in management. I just read the Half Year Reports and accounts. It carries the same, usual, frankness in their view of the business. It's not a glossy presentation. It is a CEO report. A few pages of text providing some detail. I'd encourage anyone interested to read it.

HELD
Slomo
Added 9 months ago

Agree with the sentiments and take-aways from the 1H 24 Result covered here by @Scott, @Seymourbutts and @Mujo.

Fortuna spins her wheel

Simplistically this is a business that has had a few recent setbacks in the shape of:

1)   An opportunistic but thankfully failed M&A tilt from STG @ $5.85, dropping to $5.15 on their way out the door

2)   A cyber attack that fell short of reaching or impacting EOL customers.

It was a shame to lose long serving, aligned board member Vaughn Busby in the process of the M&A deliberations (especially as he opposed it).

A feather in their trousers

But good to see Vaughn has been replaced with some (much needed?) Cap Mkts experience in the shape of Mike Ryan – an old sparing partner of @Solvetheriddle per his character ref here - https://strawman.com/reports/EOL/Solvetheriddle?view-straw=25104&inc=23131

Also great to hear management talk candidly of the lessons learnt from the M&A and cyber incident.

Their humility, and alignment is the best way to turn a black eye in to a feather in their trousers (to borrow an old Roy and HG phrase).

While still a small business in a big and growing market, EOL seem to be maturing nicely.


Disc: Held.

23
Seymourbutts
Added 9 months ago

Agree with your comments @Scott. Whilst the result is not the greatest, much of this was flagged in previous communications to shareholders and therefore these results were largely expected.

This, combined with the typical frankness and clarity of reporting has yet again strengthened my view of management and Energy One. There are no buzz words here, there's no spin, no 'moonshot' statements - what you see is what you get, which is also reflected by the way in which it has been displayed in the announcement. It is genuinely a word document with a bit of a header and footer and there you go.

I see this as being a long-term compounder, so I was happy the previous takeover offer did not proceed. From Shaun's statements it appears that they've learnt a lot over the last 6 months (re: takeover and cyber attack) which should only strengthen the business moving forward.

I also Hold, and will likely add on continued weakness.

18
Mujo
Added 9 months ago

Think another high-quality company on the back burner for a while - at least 12 months.

Still not convinced CQ is high quality company - big pay rises all round for some temporary market dysfunction. That said probably adds to the overall selling point to customers.

I do like how they are integrating it all into the one brand, hopefully this resonates across Europe.

15