Company aiming for additional 20,000 customers, on top of 21,500 existing. Their sales staff count has increased to 34, with total employees at just over 60. So half the organization is sales - probably the only way to meet targets.

If they hold to their forecast numbers, you'll have 12,500 SME and 31,500 Residential customers. 

Revenues on these (using the figures provided by the company (see this link https://www.asx.com.au/asxpdf/20190211/pdf/442hycjxn8zwh0.pdf):

SME revenues = $10500 * 12,500 = $131.25m

Resi revenues = $1300 * 31,500 = $40.95m

Total Revenues = $172.2m

Note: this is a run rate figure, as is the gross margin figure. It is not expected FY20 revenues.

And gross margins, using the same figures provided by management:

SME Gross Margin (13%) = $17m

Resi Gross Margin (23%) = $9.41m

Total Gross Margin = $26.41m

Fixed costs are currently running at about $7-8m per year. Given the number of support staff has barely changed (the only thing increasing significantly is sales staff), $10m would definitely cover the costs. Add another $1m for interest charges, and PBT should be something like $14m

There are some losses built up, but given we're using run rates, PAT of the same would be about $10m.

With 7 year contracts as the average, that's $10m p.a. for 7 years (roughly). A multiple of 10 times is probably right, maybe a little low, but allows for the inbuilt upside that Blackrock have. That puts the valuation at $100m, or a per share value of roughly $2.

Average contract length of 7 years, with termination clauses to pay for the current value of equipment plus a little extra. Very little incentive for people to move retailers

LPE are also the lowest cost provider in QLD. Run an energy comparison on iSelect/Comparethemarket, then jump on the LPE website. A fair difference in price from the lowest offer on those sites, to LPE.

Further to this, the prudential and working capital requirements on retailers are large. Building an energy retailer to the required scale is very hard, because of the up front funding required:

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.accc.gov.au/system/files/Retail%2520Electricity%2520Inquiry%2520-%2520Preliminary%2520report%2520-%252013%2520November%25202017.pdf&ved=2ahUKEwjBtcWfx6bkAhXSfSsKHZ_WAzYQFjARegQICBAB&usg=AOvVaw2fkkbxQyBLPqmm0cXp8KaM&cshid=1567030342909

The ACCC inquiry (above) outlines just how difficult this is and why there are so few retailers.

The three largest retailers hold over 60% of the business flowing through the energy network encompassing the east coast. LPE have done well to grow to this size and be able to fund their growth quite comfortably.

The interest rate on the Blackrock facility concerns me. They'll need to put up some cash for regulatory reasons, and paying 10% on that hurts.

Once they show a profit, developing the right relationship with a bank could save them a fair bit of cash.

Not the best communicators, but they really do focus on the business.

Didn't explain the revenue hit properly when QLD energy prices took a tumble, nor the transition from GWh to Customer numbers. However, they did provide a good framework to view the customer numbers and average revenues/margins for each customer type

Further, they're also very open when discussing the business (as much as the rules allow, that is).

Management also display the need to invest now and reap the benefits later. Over 50% of the employee count are sales staff, and managed rather well. They're incentivised on commissions for new clients with a low base. However, each sales member can basically double their base pay with a good level of sales.

Some small areas of concern, but overall focused on delivering shareholder value - especially because they own a large chunk of the company.