LPE has provided a customer no. update as at 30 November 2021 which continues to show good customer growth of 30% yoy. They have changed the way that the split the customers. Previously they split the customers between residential and SME customers. Now they use "Contracted (Embedded Network / Strata Community) and "Recurring (Direct Market).

It is good to see continued customer growth, though the issue has been that while they have seen increased customers numbers, the benefits of economies of scale have yet to been seen in the financials. The new contracted customers require an initial capital outlay which has been funded by increasing debt and repeated capital raises at lower prices. This has dented trust in the management and put downward pressure on the share price as investors have lost patience and belief in the story.

The next year should show whether the business can deliver on what they have been promising for the last couple of years and improved financial and not just customer growth.

Total Customers

Nov 21 45,930 +30% yoy

Sep 21 43,500 +30% on pcp

Jul-21 41,850 +600

FY21 41,250

Nov 20 35,350

Contracted (Embedded Network / Strata Community)

Nov 21 25,740

Sep 21 23,800

Nov 20 22,052

Recurring (Direct Market)

Nov 21 20,190

Sep 21 19,700

Nov 20 13,298

Investor Update of the Sep 2021 quarter released customer no.s of 43,500 at 30 Sep 2021, an increase of 30% on sep 2020.

"LPE achieved customer growth by adding an additional 1,600 customers, consisting predominantly of high-value strata community and embedded network customers, representing long-dated durable and recurring revenue streams."

The Company expects to add an additional 10,000 customers during FY22 surpassing another strategic milestone of 50,000 customers by the end of the financial year.

LPE is contining in the right direction with these customer numbers.

LPE updated it’s customer numbers for July 2021.  Total customers rose to 41,850 with +600 new customers +30.9% on year on year.  Residential customers rose by +500 and SME customers by +100.

In FY21, total customers grew by approx +10,000.  That is an average of 830 per month.  However, there would probably be seasonality in the per month numbers.

Customer retention of strata communities has been 100% to date when initial contracts come to an end, which is an indication of customer satisfaction.

Continued customer growth is a positive for LPE as economies of scale benefits increase.  As long as customer numbers increase at the current pace and customer acquisition costs don't increase significantly, then the thesis remains intact.

LPE has also benefited from the change in fair value of financial instruments used to hedge the Company’s cost of wholesale electricity to the tune of $5.64m as non-cash profit.

I rang LPE customer line to switch to LPE as a retail customer.  I asked the customer service rep what she thought about working at LPE and she was quite positive about working there which was a positive endorsement of management.  Just 1 employee so can't build a case on it but better than if it was negative.

Strong Revenue Growth

FY16 $1.8m

FY17 $10.2m

FY18 $19.7m

FY19 $32 (forecast)