gretel
08 Aug 2017
New all-time highs now Looking good winningstreak!OT : agreed re IQE, a wonderful stock. I too own some OPG (in much smaller amounts!), but it does look extraordinarily cheap. I suspect that at some point it will re-rate substantially over the course of just a few days - assuming results are as expected of course.
winningstreak
04 Aug 2017
Re: Looking very strong online Well don't expect me to sell my shares to help you get some more.I am well invested and feel good with my INSE holding. 2nd biggestin my portfolio, recently overtaken by IQE which is another favourite of mine.A currently somewhat disappointing stock for me is OPG Power, but I expect that one to become a winner in the end. Very cheap at the moment I would say.Cheers,ws
gretel
04 Aug 2017
Looking very strong online I can currently buy a maximum of just 100 shares at 19.5p, whilst I can sell 75,000 at 19.03p.
Willow67
02 Aug 2017
Re: New highs today Excuse the long postGiven the issues at UTW with generous revenue recognition, I have copied the revenue recognition policy of INSE at the bottom of this post. I would have a slight concern with the non-COTS agreements where they recognise revenue for the life of the whole contract upfront based on an estimate of future energy usage and adjust the p&l later if actual is higher or lower than the estimate. The process with the COTS SME contracts seems fine since revenues are not linked to future energy and crucially with the Corporate division (which is 80% of group revenues) where revenues are recognised based on actual usage over the contract. It would be nice if it was consistent I guess.Paul Scott’s post on the UTW board is worth reading (reported profits without cash on the b/s). I tried to make a vaguely similar point on this board 18-5-16, though nowhere as clearly as he has. You need to look at the cash flow statement & balance sheet of companies like this and figure out where the money is from the profits they have reported in the past years. It is either in the bank, in the bank then spent, owed to them (it may or may not eventually come in or a different amount might come in) or recorded as an intangible asset on the b/s. If you look at their 2016 FY results, they generated an operating profit before accounting adjustments of £7.5m of which £2.8m ended up in receivables, i.e. they haven’t yet been paid for it. The cash they did receive was spent, principally on acquisitions. So their same-year profit conversion to cash is 61% (in 2015 just 37%). I’m not suggesting anything is untoward here. If you look at the b/s at the end of 2016, their trade receivables are now >£12m but in fact 3/4 of that represents accrued income, i.e. revenue agreed on but just not yet settled by Corporates. Of course it may not come in or only some of it might come in and if so it would be a bad debt and hit p&L, but we can probably assume it is likely to come. Just £3m is trade receivables, i.e. profit recognised based on estimates of future customer energy usage.For me, I think it is healthy to adjust down their reported profit by something like 50% of the trade receivables on their balance sheet and see if the valuation still makes sense to you as an investor. Based on £4.8m of operating (real, ongoing) profit and this £1.5m downward adjustment, thats £3.3m and current year multiple of 35+, which doesn’t look that great. I still hold the shares but will be trimming down that holding and exiting fully if the shares go up much more. I don’t have a view on anything unpleasant happening here, I just think there is risk with a stretched balance sheet which has no cash, lots of receivables, rapidly increasing profits and what appears on the face of it (i.e. PER) a crazily cheap valuation. Too good to be true maybe? GLAREVENUE RECOGNITION POLICYCorporate division: Commissions received from the energy suppliers are based upon the energy usage of the Corporate customer at agreed commission rates with the energy suppliers. Commission income is recognised in line with the energy usage of the Corporate customer over the term of the contract, which is considered to be the point at which commission income can be reliably measured. This is due to the impact of the observed variability of actual to estimated energy usage on Corporate customer contracts on the substantial order book of the Corporate Division. The majority of contracts are entered into as 'direct billing' contracts, whereby commissions are received in cash terms in line with the billing profile of the ultimate customer, which can be on a monthly or quarterly basis. For a minority of suppliers, 'up-front payment' contracts are entered into, whereby the supplier pays a percentage of the commission on the contract commencement date, with the remaining percentage on contract reconciliation at a future specified date. Accrued income for the Corporate Division rep
gretel
31 Jul 2017
New highs today Moving up nicely to new highs, yet still only on a current year P/E of 12 and a forward P/E of10.5.And today's appalling news flow from sector rival UTW will only help. Amazing to see UTW's m/cap now at just £29m. Their name must be mud in the sector, and with nervousness about their covenants and financial health this is a golden opportunity for INSE to pick up even more business.
gretel
20 Jul 2017
Re: Panmure raise target price to 23p Moving nicely upwards on today's Panmure upgrade. I realised I forgot to include the 2019 forecast in my last post, so in summary the new forecasts are: this year : 1.5p EPS 2018 : 1.8p EPS 2019 : 2p EPS
gretel
20 Jul 2017
Panmure raise target price to 23p Panmure Gordon have today increased their target price to 23p and say Buy in a new post-acquisition update note.They've also increased their forecasts for next year, which are now:this year : 1.5p EPSnext year : 1.8p EPSAt the current 17.62p INSE are on a single-figure forward P/E.
gretel
11 Jul 2017
News : partnership with GMCC Nice 78k buy at 19.13 reported late last night.And some good news - the GMCC is the "largest chamber in the UK, with around 4,800 member businesses"....[link] Energy Announce Partnership with Greater Manchester Chamber Of Commerce10th July 2017Inspired Energy PLC have been announced as the latest major patron supporting the Greater Manchester Chamber of Commerce (GMCC), offering a wide range of energy and utility services to Chamber members.Inspired Energy will become the official recommended energy and utilities advisor to GMCC members, supporting them with expert advice from their market-leading team of energy specialists.As part of the agreement, Inspired Energy will provide tailored services through their newly formed GM Chamber Utilities arm, offering bespoke support for members of the Chamber. This includes a free utilities ‘Health Check’, providing an impartial review of member’s billing and energy usage as well as advising on effective cost saving methods. This impartial service provides an in-depth analysis of their energy usage, billing, efficiency measures and procurement.etc"
gretel
10 Jul 2017
Looking for new highs now Almost there, and looking strong - moving up on almost every buy this morning, with buying now at 18.5p.
winningstreak
04 Jul 2017
Re: Canaccord increase their forecasts It is becoming increasingly clear that the share price deserves to be in the mid twenties if not higher, so a good bit of head room here at current 17.25p.ws
Willow67
03 Jul 2017
Re: Acquisition Thanks a lot, I didn't see that and thought it very odd it appeared omitted! The multiple looks decent doesn't it. I'm amazed the Horizon owners would sell at just x6.5 2016 but perhaps the greater scale of the combined group is attractive enough for them.
gretel
03 Jul 2017
Canaccord increase their forecasts Canaccord have now increased their forecasts to:this year : 1.55p EPS, 0.5p dividendnext year : 1.81p EPS, 0.6p dividendThat's a current year P/E of only 11.2, dropping to 9.6 next year (when the divi yield will also be 3.45%).
gretel
03 Jul 2017
Re: Acquisition Great finish on Friday, and looking solid this week too...Willow, all the financial details of the acquired company are in the RNS:[link] you scroll down to para 4 you'll see they made 1.4m euros PAT last year. So for a basic consideration of £10m euros for the whole business this will indeed be very earnings-enhancing.
winningstreak
03 Jul 2017
Re: Acquisition I take Earnings Enhancing to equate EPS enhancing, and I am pretty sure this to be the case here at INSE.WS
Willow67
02 Jul 2017
Re: Acquisition It is impossible to judge this acquisition because they haven't disclosed any information about the company they are buying so we don't know if they are buying it for a decent price or what the forward guidance is. Telling us the acquisition is "earnings enhancing" is meaningless. We need to know whether it is EPS enhancing and by how much, given they are diluting the company's equity, or put another way, asking us to pay for it. It may or may not be a good move but its a very weak RNS.
