TPC Consolidated is an electricity retailer which also has a prepaid mobile phone simcard business. Last year the electricity retailer component of the business earned 95% of the revenue, so I’m not going into the telecommunications side of the business much further.

TPC operates in as an energy retailer under the CovaU brand, and has typically focused on the Chinese Australian community. SME’s are their main focus, but also sell to households and have also recently launched an embedded networks business IGENO.

Management provide the bare minimum information to shareholders – the required reports plus an annual investor presentation which looks extremely similar each year. The directors owns 46% of shares on issue. The stock is very illiquid and does not pay a dividend.

As TPC do not generate electricity they must buy it on the market – and the Australian electricity and gas markets have been very volatile over the last few years. They hedge their electricity purchases using derivatives and over the past few years this has caused big changes to their profits for each year. FY2017 had a profit of 800K, but then lost $3.5M due to hedging, leaving a $2.7M loss. FY2018 had a profit of $3.6M, and gained another $1.2M from hedging.

Their HY report for 2019 didn’t give investors much to look forward to with only $200K profit (plus $300K hedging wins), due to decreases in retail prices and increases in wholesale energy costs. iGENO reported a bleak outlook due to poor property markets in NSW and VIC.

This outlook caused shareholders to put this in the tax loss sell basket for the remainder of the financial year. The share price dropped from $0.90 to a low of $0.30 (with a market cap of under $4M – almost that of a shell company). With the tax loss selling over some game bargain hunters moved in.

No outlook has been given for the full year so it’s a bit of a lottery. I do note that CovaU has a decent score on Product review, and is punching above it’s weight in the number of reviews. They may be offering incentives to their customers to give a review, which may help them win more customers.

https://www.productreview.com.au/listings/covau

I live in Victoria and have used the Electricity Compare service to see how CovaU stacks up for my household electricity or gas bill – they don’t make top 10 in terms of price for both. However if I change my address to Sydney they do perform better on the price front, especially for gas.