# LPE - Locality Planning Energy Holdings



## System (11 October 2011)

Stratum Metals Limted (SXT) has entered into agreements to acquire a 100% interest in four metals projects in the Yilgarn Region of Western Australia (Yilgarn Projects):

• the Gidgee Project in the East Murchison region,
• the Pinyalling Project in the South Murchison region,
• the Bannockburn Nickel Project in the Wildara area south-southeast of Leinster, and
• the Laverton Project in the vicinity of the township of Laverton in the Eastern Goldfields of Western Australia.

These Yilgarn Projects are focused on regions prospective for gold, copper and/or nickel mineralisation. Recent geophysical interpretation of the Yilgarn Projects has provided new insights and highlighted the potential of the tenements that may have previously gone unrecognised.

In addition to the Yilgarn Projects, Stratum Metals has entered into agreements with State Resources Pty Ltd to acquire and earn an interest within the coal prospective Canning Basin, Western Australia.

The Company has the right to acquire 100% of exploration licence applications E04/2124 and E04/2125 (subject to grant of the exploration licence applications to State Resources).

Stratum Metals has also entered into an option agreement to farm-in up to 80% of exploration licence application E04/1993 (subject to grant of the exploration licence application to State Resources and to Stratum Metals meeting minimum expenditure on the tenement).

Following completion of tenement acquisitions, Stratum Metals' tenement portfolio will consist of a 100% interest in six granted exploration licences, and subject to the grant of applications 100% interest in two further exploration licences and, subject to both grant and meeting expenditure commitments, up to an 80% interest in a further third exploration licence.

http://www.stratummetals.com.au


----------



## System (24 December 2015)

On December 24th, 2015, Stratum Metals Limited (SXT) changed its name and ASX code to Locality Planning Energy Holdings Limited (LPE).


----------



## Dona Ferentes (11 January 2016)

System said:


> On December 24th, 2015, Stratum Metals Limited (SXT) changed its name and ASX code to Locality Planning Energy Holdings Limited (LPE).



LPE have HQ in Qld, on Sunshine Coast; it has been around for a few years, and recently listed. Recent ASX announcements have documented a number of contract wins for bulk electricity supply to apartment developments in Brisbane.

Interesting business model, as per the website (esp. point 3):
_1. Bulk electricity supply is the strata community aggregating their electricity, creating one single large energy profile at one connection point
2. With LPE as your energy retailer we can generate savings of up to 35% from a typical residential consumer’s annual bill
3. If we are not successful in achieving significant savings for you and your strata community then our services are free_


----------



## galumay (6 October 2017)

Interesting little business, picked up a parcel this week.


----------



## galumay (17 January 2018)

I have continued to build a position in this business, I believe they will show that they have become profitable with the Jan. 4C and the result of moving to cash flow positive should see a rerate. I also understand they are close to doing a deal on finance to help fund the growth of the business going forward.


----------



## PZ99 (17 January 2018)

They used to do a monthly update of how many GWH they captured (usually around 6% a month) but they haven't reported since November but the next report of a double figure % gain as well as being cash flow positive should kick the SP along.


----------



## galumay (17 January 2018)

PZ99 said:


> They used to do a monthly update of how many GWH they captured (usually around 6% a month) but they haven't reported since November but the next report of a double figure % gain as well as being cash flow positive should kick the SP along.




Agreed, the reasons for not doing the monthly update were explained recently, basically its simply not possible to provide accurate info on a monthly basis so it will likely be bi-monthly or quarterly going forward.


----------



## PZ99 (24 January 2018)

Cash flow positive for the quarter.



Spoiler



Cash balance at end of quarter $2.647 million
Consistent growth and steady operational costs.
Positive cash flow expected to improve in coming quarters.
Debt facility in advanced stages of finalisation

The positive net cash from operations for the quarter were modest, yet management is pleased with the result when considering one off unbudgeted business expenses of ~$40K that added capacity through the Embedded Network Manager (ENM) opportunity via the establishment of Locality Embedded Networks Pty Ltd (LEN). An additional amount of ~$160K was partly un-receipted but would normally be paid during the quarter and partly due to metering adjustments. This was a migration problem with AEMO (Australian Energy Market Operator) reforms that caused some meter data and meter adjustment issues as of 1st December 2017. These are one off occurrences.
Without these one off items, LPE would in effect have had a material cash flow positive quarter.
LPE’s CEO Damien Glanville stated “Our operating performance in achieving cash flow positivity for the quarter was in line with management expectations despite the costs in LEN and some metering adjustments that were unavoidable. We continue to see our strong cash flows being able to support expansion and improved product offerings. We look forward to better supporting strata communities and improving profitability.”
The Board has deemed it an unnecessary burden on management to provide monthly updates on GWh due to the complexity and time in getting an accurate reconciliation to the market. The Company will continue to make ASX announcements in line with its continuous disclosure obligations, and will also be providing appropriate investor updates outside of quarterly reporting. Management are working to provide an operational update for GWh to close out the FY half year encompassing November and December, the metering issues to date have not made confirmation of these volumes possible.
LPE is nearing the finalisation of its debt facility. The Company anticipates updating the market soon with regards to the details of the debt facility and the Company funding structure.



Topped up on the retrace yesterday.


----------



## galumay (24 January 2018)

Yes, I thought it was a good announcement, we already knew about most of the issues anyway and the really significant thing is finally making it to cash flow positive. Now it all really just becomes a question of how quickly and efficiently they can scale the business.


----------



## PZ99 (30 January 2018)

Since the ann we've had a 10m buy order at 2.0, another 10m at 2.1 and 8m at 2.2 today.

Don't know if this constitutes a potential breakout or not but if there's any stock that's justifiably overdue for one it's LPE.


----------



## galumay (30 January 2018)

I am waiting patiently! I think now its cash positive the waiting is a lot more comfortable, it will get noticed sooner or later.


----------



## PZ99 (7 June 2018)

Change of business plan for LPE... they're now going beyond the embedded networks and targeting individual accounts whilst maintaining similar profits. Interesting 

NEW PRODUCT LINE ADDS $1.7 BILLION OF ELECTRICITY OPPORTUNITIES



Spoiler



Locality Planning Energy Holdings Limited (ASX: LPE) (the Company) is pleased to announce the expansion of its product offering to Direct Market Customers (DMC) adding $1.7 Billion worth of electricity opportunities for the Company. The initial DMC uptake over the past month has been strong adding 4GWh alone to LPE’s energy Under Management (UM).
Highlights
• New product line increases LPE’s addressable strata market by 180% to $2.7 billion per annum
• DMC offering is tailored to those communities where an LPE embedded network is not viable
• Easy switch over with no upfront capital costs or lock in contracts
• The new product is open to anyone living in Southeast Queensland, with expansion to all states in coming months)
• Margins to the Company are similar to an LPE embedded network
• LPE expect significant growth through its one-to-many sales model leveraging on its existing relationships
DMC is the normal mechanism for the supply of electricity to individual consumers in the market. They are standard retail offerings that are available to all consumers and do not require any infrastructure build-out or upfront costs. LPE’s DMC offering is unique in that it is a specialist strata community supplier with its agreements, terms and services tailored towards strata communities, but is not limited to them.





Gross retail margins to LPE under its DMC offering are similar to embedded networks. While other retailers opt for a high headline price and a discount when a customer pays their bill on time, LPE offer a flat low kWh price. As energy and network costs move, LPE will continue to adjust its DMC pricing to remain competitive.
Direct Market Customers have a faster and simpler sales cycle. Unlike other retailers who employ a one-to-one sales strategy in this segment, LPE will maintain its one-to-many sales cycle by targeting only (smaller) strata customers for its DMC business.
LPE projects ~4,000 service points (equivalent to approximately 27GWh) will be added by the end of 2018. This is estimated to grow to more than 27,000 service points by the end of 2020.

CEO Damien Glanville said, “This expansion into DMC marks an exciting milestone for the Company. Not only can we continue to provide a competitive product through our LPE embedded networks, we can now provide an alternative for smaller strata communities and individuals.


----------



## galumay (12 June 2018)

Investor presentation out today which gave the SP a bit of bump. Not much in it we didnt already know. Wondered if they were prepping for an aquisition??


----------



## galumay (19 October 2018)

LPE up nearly 16% this morning on notifying they had secured funding with Blackrock. Such a high profile creditor will increase confidence in management and implies a good 4C result is pending. 

My only question is around the performance rights for Blackrock as I cant quite understand how they work from the announcement and am not sure what the net, dilutive impact might be.


----------



## PZ99 (19 October 2018)

Beat me to it. You still holding? They should be able to hit their 450GWh target with that funding.

Blackrock's the real deal.


----------



## galumay (19 October 2018)

Yes, I have quite a decent holding in both my personal portfolio & SMSF. One of my high conviction positions.


----------



## Klogg (19 October 2018)

galumay said:


> Yes, I have quite a decent holding in both my personal portfolio & SMSF. One of my high conviction positions.




Braver than me. I have a 5% position here (one of my smallest). 
I was reluctant at first, but conversations with Ben and Damien answered a few things

Sydney market, here we come.


----------



## galumay (19 October 2018)

Klogg said:


> Braver than me.




No, just less experienced and less skilled. Hopefully I can learn, though!


----------



## Klogg (20 October 2018)

galumay said:


> No, just less experienced and less skilled.




Doubtful. For the record, I've had fairly sizable positions in IQE and VOC...

Tony gave me the idea for LPE, I'm assuming that's where you got it from too?


----------



## galumay (20 October 2018)

I'll raise you, my SGH holding.

Yep, from Tony.


----------



## PZ99 (20 October 2018)

Klogg said:


> Braver than me. I have a 5% position here (one of my smallest).
> I was reluctant at first, but conversations with Ben and Damien answered a few things
> 
> Sydney market, here we come.



The Sydney market is way overdue. Competitors with their own embedded networks are picking the low hanging fruit when it should be LPE doing it. IMO. This latest funding deal might facilitate that.


----------



## kenny (21 October 2018)

What's the consensus here on the Blackrock facility at 10% interest? Is it a game changer allowing LPE to grow as it intended?


----------



## galumay (21 October 2018)

Personally I prefer it to CR, but they would have struggled with CR at the moment probably anyway. Its a pretty sweet deal for BR, 10% plus plenty of upside with the options, but I guess thats the price when you are an unprofitable, growth business! 

What I think is going to be much more of a deal is the next 4C, if LPE is cash flow positive and the growth has continued to accelerate then the BR deal will look very good.


----------



## PZ99 (20 November 2018)

50:1 consolation on the cards. Thoughts?



Spoiler



One of our resolutions this year was that of Share Consolidation. In considering how to structure this a report of peer ASX listed companies was sought, 70 in total. On benchmarking by market capitalisation and revenues, of the sample the mean share price was $1.54 and the median was $0.74. It was therefore decided to take a 50:1 consolation to the shareholders. This will have the benefit of placing LPE in a larger investor market along with meeting mandates of higher calibre investor groups.


----------



## Klogg (20 November 2018)

PZ99 said:


> 50:1 consolation on the cards. Thoughts?




Don't see how it matters either way. I still get the same percentage of the company for the same dollar value.


----------



## galumay (20 November 2018)

I have seen them go horribly wrong, oddly and irrationally it creates more downside. I would prefer they just focussed on actually getting the business cash flow positive.


----------



## PZ99 (21 November 2018)

They're not mucking around. It's on next week.

Effective Date Monday November 26, 2018

Record Date Tuesday November 27, 2018

Issue Date Tuesday December 4, 2018


----------



## galumay (21 November 2018)

Yes, I see that. Oh well, its another red mark for management IMO, they are nearly out of cash, still not cash flow positive and should be focussing on running the business, not messing around with capitalisation and worrying about share price.


----------



## PZ99 (6 February 2019)

Looks like it's gone badly wrong. Down to one cent on the old money and no support.



Spoiler


----------



## galumay (6 February 2019)

You are right PZ99, just shows how bad management can be very capital destructive even if the underlying business is travelling OK. A series of very incompetent actions by management have destroyed a lot of shareholder value. 

The consolidation was a stupidity, I know at least one fund recommended management not consolidate and warned of the dangers. Then the release to market, well after close, of a factually incorrect announcement, on the eve of a long weekend followed by a delay of nearly a full days trading before LPE 'fessed up to the error in the announcement.

I think now the market has no confidence at all in management's ability to execute with any level of competence. 

The underlying ggod news is that despite the fall in wholesale prices which then flowed through reducing revenue and profit, LPE remain cash flow positive - the business will always be lumpy due to wholesale energy pricing volatility so thats at least one sign of some resilience.

They will need several strong quarters with no further stuff ups by management before the share price recovers.


----------



## Smurf1976 (16 April 2019)

As a heads up for those following this - it's going up significantly but on very low volume over the past few days.

Just an observation - do not hold.


----------



## PZ99 (16 April 2019)

Noticed that. Let's hope it continues. A lot of holders will be in the red until it hits $1.50

Sold out just before the consol at 80c (1.6c at the time)


----------



## galumay (16 April 2019)

Maybe there has been a bit of interest as a result of them presenting at the Coffee Microcaps Conference?

I still hold, but have grave concerns about management competence to execute. (Only deepened by feedback from the conference.)


----------



## Klogg (1 July 2019)

This has been very quiet. They've hit FY19 customer numbers and have put out a super bullish target for FY20. By their numbers, Gross Profit should hit about $25m (run-rate) by those numbers.

This will be worth multiples of current market cap if they come anywhere near those customer numbers.


----------



## galumay (1 July 2019)

Klogg said:


> This will be worth multiples of current market cap if they come anywhere near those customer numbers.




Agreed, my niggling concern remains Management's ability to execute. At least there are a couple of funds on board now who are sending management strong messages about expecatations around capital management, shareholder communications and cost control.


----------



## Klogg (1 July 2019)

galumay said:


> Agreed, my niggling concern remains Management's ability to execute. At least there are a couple of funds on board now who are sending management strong messages about expecatations around capital management, shareholder communications and cost control.



I actually think they're very good at executing. Distractions and investor relations seem to be the bigger problem.

Their results have not been bad, even though they've missed forecasts. But they do set some audacious targets...


----------



## PZ99 (1 July 2019)

SP now higher than prior to consolidation and LPE is leading the tipping comp. Good to see


----------



## Klogg (1 July 2019)

PZ99 said:


> SP now higher than prior to consolidation and LPE is leading the tipping comp. Good to see




When they first released that market update, there was a line of about 100k shares available. I didn't take it and now am kicking myself. The end result was obvious.

I did buy a fair bit, but not enough. It's only a 6% position right now... As usual, mistakes of omission hurting the most


----------



## PZ99 (1 July 2019)

Klogg said:


> When they first released that market update, there was a line of about 100k shares available. I didn't take it and now am kicking myself. The end result was obvious.
> 
> I did buy a fair bit, but not enough. It's only a 6% position right now... As usual, mistakes of omission hurting the most



It's still historically cheap. Most patient holders from the pre consol days would break even at around double the current price. I should have bought some when they were 50c though


----------



## galumay (1 July 2019)

Klogg said:


> I actually think they're very good at executing.




You maybe right with the actual sales side of it, but things like the extremely stupid consolidation and what I have seen of management's atitude to suppliers, customers and employees concerns me - but I have a fairly large position because I do think the downside risk is heavily outweighed by the opportunity.


----------



## galumay (1 July 2019)

PZ99 said:


> Most patient holders from the pre consol days would break even at around double the current price.




I started buying a couple of years ago at = to $1.30 precon. I have averaged down to an average of $1 so not too far off being in the black!


----------



## Klogg (1 July 2019)

galumay said:


> You maybe right with the actual sales side of it, but things like the extremely stupid consolidation and what I have seen of management's atitude to suppliers, customers and employees concerns me - but I have a fairly large position because I do think the downside risk is heavily outweighed by the opportunity.



I don't get it. What's wrong with consolidating the number of shares?

For the sake of calculation it made things much easier. I for one appreciated it


----------



## galumay (1 July 2019)

Klogg said:


> I don't get it. What's wrong with consolidating the number of shares?




Because more times than not the price falls heavily (as it did in this case), whether its just an anchoring thing I dont know, but a much higher SP seems to give it much more room to fall!



Klogg said:


> For the sake of calculation it made things much easier. I for one appreciated it




What calculation is easier? You own x number of shares at Y price regardless. If nothing else its a PITA because you have to reprice all your existing parcels and change the size of the parcels.


----------



## kenny (1 July 2019)

re Anchoring or human nature; In the same way oddly enough, it seems like a share split often drives the SP upwards.


----------



## Klogg (1 July 2019)

galumay said:


> Because more times than not the price falls heavily (as it did in this case), whether its just an anchoring thing I dont know, but a much higher SP seems to give it much more room to fall!
> 
> 
> 
> What calculation is easier? You own x number of shares at Y price regardless. If nothing else its a PITA because you have to reprice all your existing parcels and change the size of the parcels.



Calculating based on 251m shares was a larger denominator, lol.

Not doing something because the price goes down is a bad reason not to do it


----------



## PZ99 (1 July 2019)

I think they should've done it much earlier in 2016 when people were buying the promise rather than the result.


----------



## galumay (1 July 2019)

Klogg said:


> Not doing something because the price goes down is a bad reason not to do it




Ok, I will play, because I am bored! Your comment seems much less thoughtful than your usual high quality content Klogg!! 

So, you are saying doing something because the price goes down is a good reason to do it?!

Fraud, lowering profits, raising costs, over paying for an aquisition, lowering quality control....!


----------



## Klogg (1 July 2019)

galumay said:


> Ok, I will play, because I am bored! Your comment seems much less thoughtful than your usual high quality content Klogg!!
> 
> So, you are saying doing something because the price goes down is a good reason to do it?!
> 
> Fraud, lowering profits, raising costs, over paying for an aquisition, lowering quality control....!




You don't commit fraud because it's illegal. Nothing to do with share price reactions.

Just like expensing something rather than capitalising it if given the choice. You lower reported profits, which lowers the share price, but you improve cash flow (less tax paid).

Similarly with acquisitions - they usually get the investment community existed and temporarily raise the price. But again, the share price is a bad reason to do it.

It should be purely about the business, regardless of what the price does.


----------



## galumay (1 July 2019)

Klogg said:


> It should be purely about the business, regardless of what the price does.




Ok, that gives your original comment a context that makes more sense! I can agree that there are some actions that drive share price down in the short term, but improve the business in the longer term. 

On face value your comment just made no logical sense to me.


----------



## Klogg (1 July 2019)

galumay said:


> Ok, that gives your original comment a context that makes more sense! I can agree that there are some actions that drive share price down in the short term, but improve the business in the longer term.
> 
> On face value your comment just made no logical sense to me.




Fair. It was very badly explained lol. I would have picked it up too, had somebody else written it.


----------



## PZ99 (4 July 2019)

It's been a long time since I've seen LPE doing this - is this a breakout ?


----------



## galumay (4 July 2019)

Its a change in price! From my perspective I am happy to see a convergence between price and value, if the results for the full year are consistent with expectations then LPE will probably attract significantly more attention as it beds down profitability and growth.


----------



## Klogg (4 July 2019)

galumay said:


> Its a change in price! From my perspective I am happy to see a convergence between price and value, if the results for the full year are consistent with expectations then LPE will probably attract significantly more attention as it beds down profitability and growth.




When companies are just becoming profitable at very high rates of growth, there's a wide range of possible outcomes. So the valuation one comes to can vary hugely.

In my mind, this is still a no-brainer. At $45m and a fairly sticky customer base (average contract length about 7 years from memory), it'd be hard for these guys not to provide an earnings yield of at least 10%.

Then, if you strip away the extra sales staff, etc., your margins grow. Not that I'm suggesting it's worth doing, but the 'maintenance' level of spend is lower than the last 4C suggests. (Remove any M&A investigation expenses too)

Add to that, the company is proposing growing revenues (run rate) by over $100m (using AER revenue figures per customers quoted by the company), and GP by about $15.4m. They're growth figures, not absolute, using the company's forecast (see recent Market Presentation). FYI, total revenue (run-rate) is forecast at ~170m and GP at ~36.4m (using same Market Presentation and revenue/margin figures quoted by the company).

Even if they miss those targets by 20%, they're still in a very strong position. And recent sales suggest they won't miss them (SME growth for the quarter has been ridiculous).

Low cost provider coming through with the goods.


----------



## galumay (4 July 2019)

Management competence remains the biggest risk IMO.


----------



## Klogg (4 July 2019)

galumay said:


> Management competence remains the biggest risk IMO.



Interesting. What makes you say that?


----------



## galumay (4 July 2019)

We touched on it on the previous page. I have also seen some of the CEO's behaviour and commentary about suppliers, employees and competitors - not consistent with my values! Also shareholder communications have been poor at times and poorly timed. There is history in the early days of the business which other investors tell me stops them from being invested. (before my time). Finally I was less than impressed with the response I received when I raised some of my concerns. 

Regardless its still a significant position for me both in my personal portfolio & the SMSF because I think the risk/opportunity spectrum is asymmetrically biased to the opportunity side.


----------



## Klogg (4 July 2019)

galumay said:


> We touched on it on the previous page. I have also seen some of the CEO's behaviour and commentary about suppliers, employees and competitors - not consistent with my values! Also shareholder communications have been poor at times and poorly timed. There is history in the early days of the business which other investors tell me stops them from being invested. (before my time). Finally I was less than impressed with the response I received when I raised some of my concerns.
> 
> Regardless its still a significant position for me both in my personal portfolio & the SMSF because I think the risk/opportunity spectrum is asymmetrically biased to the opportunity side.



Would love to know more about supplier and employee treatment that you mentioned.

Agree totally on the comms. They need help here. Then again, any of Lev Mizikovsky's companies have the same issue, but his ability to deliver shareholder returns is not in question.

This is now a 6% position. Consider I have 8 positions on total and it's not very big. But then again, ANO makes up about 60%...


----------



## galumay (4 July 2019)

I will PM you.


----------



## Klogg (5 July 2019)

Klogg said:


> *In my mind, this is still a no-brainer*. At $45m and a fairly sticky customer base (average contract length about 7 years from memory), it'd be hard for these guys not to provide an earnings yield of at least 10%.
> 
> Then, if you strip away the extra sales staff, etc., your margins grow. Not that I'm suggesting it's worth doing, but the 'maintenance' level of spend is lower than the last 4C suggests. (Remove any M&A investigation expenses too)
> 
> ...



The language I used there is a little scary (bold). Opening myself up to missing important details.

I revisited the thesis and it checks out from what I can tell. Concerned that SME forecast went from 850 to 3500 for FY19, and there was no market sensitive announcement to state as much.

Cost to simply operate (i.e. not sell) is still a little hazy. Hard to split out what costs are M&A, sales and what is operations.


----------



## galumay (5 July 2019)

Well caught, Klogg! Its always a battle to keep those heuristics at bay.


----------



## galumay (30 July 2019)

Pretty disappointing 4C today, missed targets, still cash flow negative (I have track FCF, not OCF.).
It doesnt really make sense but guidance is for cash outflows of $16m next Q - which would be disastrous if true.


----------



## PZ99 (31 July 2019)

LOL > When that's done / dusted / digested by the market.... I'll re-invest


----------



## Klogg (31 July 2019)

galumay said:


> Pretty disappointing 4C today, missed targets, still cash flow negative (I have track FCF, not OCF.).
> It doesnt really make sense but guidance is for cash outflows of $16m next Q - which would be disastrous if true.




Not sure I agree on that... 35 of the 60ish staff are sales focussed. That's over half your staff (excl. Damien/Ben) spent acquiring customers. This is what enables 12%+ customers (greater in terms of revenue) per quarter. You could quickly trim that to 5 sales staff and save $3m annually.

Perhaps (likely) the $12m outflow for operating/product costs are energy and network related. When you onboard that many SME clients, you have to buy energy to sell... and there's a lag from when you buy it, to when it's paid by the customer.

I think their forecasts on cash intake are silly. They can't control usage by clients, but they can control (to a degree) number of additional clients. Just forecast client numbers, that's more than enough.
But that doesn't take away from their ability to (overall) run a lean, high growth energy retailer with locked in customers. Nothing significantly wrong in my view.

Even if they hit 80% of their 20000+ new customer target in the next year, it's still very impressive. On a run-rate basis, this could be very cheap.


----------



## Klogg (31 July 2019)

PZ99 said:


> View attachment 96481
> 
> 
> LOL > When that's done / dusted / digested by the market.... I'll re-invest




I don't see how this is a problem. This isn't like a typical retailer that increases working capital in the hope of selling stock... That $12m expense is directly related to the amount they sell.
They're estimating they'll need to sell $12m worth of energy and network usage, which they bill to their customers. The higher this number is, the higher the cash intake for the next quarter...

Also worth mentioning that last 4C they forecasted $7.2m for this item, ended up spending $5.4m. They usually over-estimate this figure.


----------



## PZ99 (31 July 2019)

I don't think it's a problem either. But historically the market hasn't been kind to LPE and those numbers will kill the SP in the short term. 

One predicts a hot summer will be the ultimate panacea for this company, so that's when I'm looking for a re-entry


----------



## Klogg (31 July 2019)

PZ99 said:


> I don't think it's a problem either. But historically the market hasn't been kind to LPE and those numbers will kill the SP in the short term.
> 
> One predicts a hot summer will be the ultimate panacea for this company, so that's when I'm looking for a re-entry



Getting anywhere near the forecast customer numbers should do the job.


----------



## galumay (31 July 2019)

You are more optimistic than I, Klogg. Mind you I still hold plenty, but I should probably cut my losses and run given how little conviction I have in management. I am much more concerned than you by the escalating cash outflows, that will send them deeply cash fllow negative, and thats OCF too. I also hate the loan facility, 10% plus fees for share price growth. Anyway, I guess I better stop my grumbling and either sell or shut up!


----------



## galumay (30 August 2019)

Another year of consistent underperformance by LPE, losses up by 100%, cash flow still very negative, funny how they had no commentary on the abject failure to meet any of the targets in their guidance. I continue to be a reluctant holder, low conviction, suspicion around management competence.


----------



## Klogg (30 August 2019)

galumay said:


> Another year of consistent underperformance by LPE, losses up by 100%, cash flow still very negative, funny how they had no commentary on the abject failure to meet any of the targets in their guidance. I continue to be a reluctant holder, low conviction, suspicion around management competence.



They didn't mention the 32m cash guidance, I agree on that.
But the rest is not a failure. They didn't indicate being cash flow positive in fy19(from what I remember).

Look at the last 4c. If they have 850k in receivables that weren't received due to change in billing period (as they mention), they're already cash flow positive.
Add that half the work force is sales, not operations, and the existing operation is well and truly cash flow positive.

Margin compression (this time around) is the result of accounting rule changes (AASB 15). No change in cash flows from this.

The business is actually progressing well, they're just too bullish on their forecasts. I don't expect they'll hit an extra 20000 customers, but even 15000 means the current market value is undercooked.


----------



## galumay (30 August 2019)

Thanks Klogg, you are not the only one more bullish than I, Tony Hansen obviously has confidence too. I have long ago made the decision to stick it out, but I simply dont have the level of conviction I would like. I think having a vent each time they release results allows me to then have the patience to continue to hold!


----------



## Klogg (30 August 2019)

galumay said:


> Thanks Klogg, you are not the only one more bullish than I, Tony Hansen obviously has confidence too. I have long ago made the decision to stick it out, but I simply dont have the level of conviction I would like. I think having a vent each time they release results allows me to then have the patience to continue to hold!



Tony and I chat a lot about this holding. Mostly because we both speak to Damien fairly frequently, so there's a bit to pass to and from.

If management actually laid out the investment case properly (outlined the cash flows), this would be trading at a much higher valuation.


----------



## galumay (30 August 2019)

Yes, I also had a dialogue with Damien, it didnt inspire any more confidence in management for me! 

I am hoping that they slowly execute and I slowly gain conviction at the same time!


----------



## Klogg (13 November 2019)

One for you @galumay



Interesting response to the question at 24m 5s...


----------



## galumay (13 November 2019)

I will believe it when I see it!!


----------



## PZ99 (13 November 2019)

Pretty vague response there if you ask me. 

I noticed prior to that they were saying Victoria has less sunshine for solar panels than QLD.

Not in summer fellas  : And that's when power usage peaks...

Now how many strata plans has Melbourne got again ?


----------



## PZ99 (22 January 2020)

Things looking rather crook here. Two directors leaving and a guidance review...

Down 17% in two days and a nearly empty list of buyers. 

It's probably a buy if there's nothing wrong with the company.


----------



## galumay (23 January 2020)

If you think thats bad, wait till you see the 4C! They will miss their ridiculously high guidance on revenue by a large amount. Take up on solar has apparently been much slower than they boasted.

The good news is the resignations, but 2 is probably not enough, management is structurally dysfunctional.

I reckon you will be able to pick them up much cheaper soon, the turnaround if it comes, is years away.

Its my hair shirt.


----------



## rcm617 (31 December 2020)

Has been bouncing around in the low 20's for most of the year after falling from 70c. The last few days has been rising steadily on high volume. Customer numbers have been rising steadily all year, maybe 2021 will finally be the year that their optimistic predictions come true.


----------



## galumay (1 January 2021)

rcm617 said:


> maybe 2021 will finally be the year that their optimistic predictions come true.




LOL! I wish.


----------



## djones (4 January 2021)

galumay said:


> LOL! I wish.




Tough to argue with their customer and cashflow growth.

Unless they are selling the energy and equipment at a loss there has to be a point they become cashflow positive..the next quarterly will be telling.

As a longterm, underwater shareholder though “next quarter” has been said a few too many times!

I will continue to hold whilst the impressive revenue growth continues.


----------



## galumay (4 January 2021)

djones said:


> Unless they are selling the energy and equipment at a loss there has to be a point they become cashflow positive..the next quarterly will be telling.




There is an excuse for every quarter of failure! I hold a small parcel still to remind myself of the lessons here. Management showed an inability to allocate capital intelligently, they were also serial over promisers and very full of hype & spin. I should have sold a couple of years ago when I saw and commented on the warning signs. I would have lost a lot less capital! 

My real mistake was buying someone else's conviction - it rarely works and I am guilty of doing it with the same investor more than once. I have hopefully learnt my lesson.


----------



## galumay (29 January 2021)

As expected LPE increased customers & revenue, but still managed a -'ve OCF quarter in their 4C released today. A perpetually hopeless management with no ability to execute.


----------



## greggles (20 July 2021)

FY21 Trading Update and Preliminary Results announced today and LPE turning a profit, albeit a small one of $900,000.

A much better result than FY20, especially the 163% increase in gross profit to $14.9 million.


----------



## galumay (20 July 2021)

Its not nearly as good as it looks, almost all the improvement is due to hedging, I can see why they released the FY results before the 4C - the cashflow statement will show us the true situation. In this case Gross Profit is vapour ware. Its a continuation of the lack of integrity this management team has displayed for a long time.

Its in the fine print, always read the fine print!


----------



## peter2 (20 May 2022)

From the *LPE* website (after reading a report in the AFR)






What happens to* LPE *if all customers go elsewhere?


----------



## PZ99 (22 June 2022)

peter2 said:


> From the *LPE* website (after reading a report in the AFR)
> 
> View attachment 141938
> 
> ...



They've been forced to go back to basics which is the embedded network in strata buildings.

Getting their "on-market" customers off the books gives them access to their hedged cash security of around $30m all up which they can use to retire their debts and be around $6m in the black.

The market liked it (for around 5 minutes) but it's a get out of jail free card for the business with a market cap of just $10m.

_* bullish... not holding but worth tipping *_


----------

