EOL - Energy One

[Dona Ferentes]

Trading Halt pending an announcement to the ASX in relation to an equity capital raising

EOL has been every which way except up, for the last few months

 

[Dona Ferentes]

The Capital Raising will be comprised of two components being a non-underwritten institutional placement to eligible sophisticated and professional investors, which will be followed by a non-renounceable non-accelerated 1 for 62 partially underwritten rights issue .

Placement is intended to raise up to $5.5m whilst the Rights Issue will raise up to a further approximately A$2.0m at the same offer price of $4.50 per share.

Funds raised under the Capital Raising will be used to settle deferred consideration amounts payable to the sellers of Egssis NV and CQ Energy Group and fund transaction costs, with remaining amounts being used as working capital to provide balance sheet support.

.... pretty derisory scraps off the table, for existing shareholders

 

[Dona Ferentes]

I'll keep posting on EOL as I am a shareholder. As a LT exposure (first buy in 2019, and have put in $18K, average buy-in $2.40) I'm happy to hold, but there is a bit of a 'consolidation' occurring.

The recent placement and rights @ $4.50 seems to have been well priced. But market doesn't think taht short-term there's much more in it?

One matter hanging over EOL shareprice could be the recent resignation of a Director, one who has been there since the early days, 2007, and hence likely picked up a significant holding (has 1.4 million shares @ last notice). A notice at 31 Oct said that although this holding has increased, it is no longer a Significant Holding (IE. slipped below 5%). And now, no longer a Director, there is no need to disclose sales. So there 'could be' an overhang of $6million+ EOL shares if all are sold?

(the Placement in Sept at $4.50 was upsized from $5.5 million to $7.5 million in response to strong demand from new and existing institutional investors .... maybe some 'approaches' will be made for some off-market action to the same cohort)

 

[Dona Ferentes]

Wasn't shown as Market Sensitive but has seen EOL recover from earlier selling down.

SHELL TO USE ENERGY ONE FOR AUTOMATED BATTERY ENERGY TRADING
Energy One Ltd has entered into a long-term framework agreement with Shell Energy Australia to use Energy One’s solutions for its growing portfolio of battery, demand response, renewable and other generation assets.

Initially controlling battery and demand response assets, Energy One’s fully automated bidding and dispatch solution, underpinned by its technology platforms, allows Shell to operate any combination of generation assets in the Australian electricity market.

The solution also enables end users to rapidly develop, test and deploy trading strategies on an asset-by-asset basis, allowing Shell to flexibly operate its portfolio in a dynamic market with a growing proportion of distributed assets. The solution is scalable to enable roll-out of future assets and can support multiple assets within a broader portfolio.

Energy One Group CEO, Shaun Ankers, noted that, “ We are excited to be able to extend our relationship with Shell and assist with its renewable energy transition. Our global capability in both technology and services means we can support a leading renewables developer, like Shell, with cutting edge solutions”.

(Hold; thought about adding but liquidity is an issue.)

 

[Dona Ferentes]

Trading Halt ...an equity capital raising
... EOL has been every which way except up, for the last few months

and continuing to slide. Fresh money probably not too happy. But, just maybe, finding a base around $3 (buyers appearing? ) and the ex-director finally out?

 

[Dona Ferentes]

Very thinly traded, a Director got a few away the other day. :

.... and he might just be done. EoFY and all that...

 

[Dona Ferentes]

.... and he might just be done. EoFY and all that..

A bold assumption, the big seller may just have done his dash. Now it's back to sleep and low volumes, big gaps again. EOL might, just might, drift back into the 4's. Up >20 per cent in the last 2 days...

 

[Dona Ferentes]

now $3.72 ....

Energy One Limited is aware of market speculation that it will miss guidance. Energy One confirms that its prior guidance is expected to be met.

For the full FY23 year on an unaudited basis, total revenue is expected to be approximately $44.5M and EBITDA is expected to be approximately $12.3M.

Pleasingly, the Company expects that unaudited Annual Recurring Revenue growth will be 19% (constant currency: 15%) over the full year, bringing the total ARR for FY23 to approximately $44M. This is all organic growth. Given the first half ARR growth was ~3%, this confirms the strong second half predicted by management.

 

[Dona Ferentes]

EOL Cyber Incident and Update

On Friday, 18 August 2023, Energy One Limited established that certain corporate systems in Australia and the United Kingdom had been affected by a cyber-attack.

In response, Energy One took immediate steps to limit the impact of the incident, engaged cyber security specialists, CyberCX, and alerted the Australian Cyber Security Centre and certain UK authorities. Energy One’s top priorities are the safety and security of its people, its customers, and its systems.

Analysis is underway to identify which, if any, additional systems may have been affected by the cyber-attack. As part of its work to ensure customer security, Energy One has disabled some links between its corporate and customer-facing systems.

Energy One’s response to this incident, and its investigation, is continuing. Key lines of the ongoing inquiry and response include securing Energy One’s systems, establishing whether or what personal information and/or customer-facing systems have been affected, and the initial point of entry.


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[Dona Ferentes]

phew ... closed not far from where it was b4 this was disclosed
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Energy One has continued to do business with our valued customers through the cyber incident.

Our response partners at CyberCX have so far identified only activity within Energy One’s corporate systems. No malicious activity has been identified on customer-facing systems.

No unauthorised access to Energy One systems has been observed since containment activities began on Friday, 18 August 2023.

Disruption to Energy One’s business has been minimal with impacted corporate systems being restored, and links between corporate systems and customer-facing systems being re-enabled.

 

[Dona Ferentes]

Results out; also likely to open above $5

Energy One receives proposal and grants due diligence on an exclusive basis
Energy One Limited today announces that it has received a confidential, indicative, incomplete, conditional and non-binding proposal from a global investment firm, STG. STG has nearly US$10 billion of assets under management and a portfolio that includes software and software-enabled services companies. The Indicative Proposal is to acquire all of the issued shares in Energy One at an indicative price of A$5.85 cash per share by way of a scheme of arrangement. Energy One has also entered into an exclusivity deed granting STG with an expedited period of exclusivity to allow STG to complete confirmatory due diligence.

 

[Dona Ferentes]

Results out; also likely to open above $5
...Energy One receives proposal

make that now $5.50...
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The year ahead
Since my last report we have continued to win accounts with renewables and other participants for our packaged solutions, especially for physical energy players in the form of scheduling software and 24/7 services for solar and wind farms and the like, both in Australia and in UK/Europe.

Further, we have won 2 large accounts in recent months, as well as 4-5 medium accounts and numerous small accounts. Further, we anticipate winning a significant new European-based account in the coming months. This customer is in final contract negotiations with us on what would be a material contract. While there is no guarantee of a signature, we remain confident that our superior technology solution is the best fit for their needs.

We can report that customers are now returning to the market with a distinct uplift in enquiries and trade show attendance. The company has a very strong pipeline of opportunities that we expect to continue working on the year ahead.

As mentioned we are mid-way through our 2-year program of investment in building our global capability in the software and services business, thereby providing follow-the-sun, 24/7 market operations solutions. The program involves additional investments in cybersecurity; legal, contractual and technical standards; technical (systems and software) and key global personnel and expertise to shape our capability and become the leading international supplier of these types of solutions.

To our knowledge, we have an early or first-mover advantage globally, as no other vendor offers a similar global solution. Our research shows that the global Total Addressable market for these solutions is likely to be $2bn per year within 10 years, driven largely by the decentralization of the energy market, caused mainly by renewables.

Given the strength of the existing business this investment is being funded from internally generated cash flows.

Investing for growth will obviously come at the expense of short-term performance. Further, given that we potentially have a major project being signed in the first half (timing not confirmed) the Board have elected to not provide guidance (at this time) for the FY24 year. This will be reviewed at half year.

As a company we are pleased to have reached a point in our journey where we can maintain strong growth in profitability while at the same time making substantial investments to accelerate future growth.

Shareholders will be aware of the recent cyber incident. The incidence of malicious attacks on corporate systems is increasing and EOL unfortunately has not been immune. Such incidents reinforce our decision to move towards increased security in the form of ISO27001 and our investment in that remains a priority, with completion expected in 2024. We will keep the market up to date via announcements.
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....if this would all come to pass, its a shame for an approach to be made now.
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(Hold)

 

[Dona Ferentes]

make that now $5.50...
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....if this would all come to pass, its a shame for an approach to be made now.

ran up, but today may play a stay or delay. often the way.
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The Company advises it has just received news that the significant European prospect we mentioned in the 4E, has been delayed by the customer. The customer’s reasons are not related to the merits of our technology, but more to do with their internal resource and capability to undertake the project at this time. The period of delay is uncertain, but we do expect that the project will not now form part of the revenue stream.

 

[Dona Ferentes]

another one week extension granted to the suitor. ... as they say, there is no guarantee of a deal. And no-one else in the wings, so far. Now 5.26, well under the 5.85 cash offer.

 

[Dona Ferentes]

Results out; also likely to open above $5
...Energy One receives proposal and grants due diligence on an exclusive basis .

is 5 dollars a danger level ? Is there not that much conviction the proposal will proceed? Sometimes taking the money and skedaddling has its merits.

 

[Dona Ferentes]

things wuz too quiet. Trading never got near the offer price.
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Energy One advises that STG has overnight revised its non-binding proposal to acquire all of the issued shares in the Company so that is now at an indicative offer price of $5.15 per share. While STG was enthusiastic about the business and its prospects, the Board considers that the Revised Proposal does not appropriately value the Company and its prospects and is not prepared to recommend it to shareholders.

Given that, the Board does not consider that continued engagement with STG in connection with the Revised Proposal is in the best interests of shareholders as a whole and so has terminated discussions.

 

[Dona Ferentes]

trading around 4.20. AGM just held.
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As announced, the Company has experienced inbound interest in a variety of corporate transactions over recent years. About a year ago the Board formed a view following advice from advisers that we could conduct a successful sale at or about $6.00 per share. Therefore, we embarked upon a sale process. The process, which was all consuming for our small group of executives and the Board, was undertaken while the company embarked upon our innovative expansion of our global offering of our SAS business in the northern and southern hemispheres. The result of the sale process was disappointing with an offer emerging of $5.15, rejected by the Board last month.

Looking forward
The distraction of management time from running the business to dealing with due diligence etc. was very costly and the outcome was further impacted by the hacking which took place during August due to the need to protect the customer and employee data and manage the Company’s response. Now, with certain changes to management, we have resumed normal business.

The distraction of the sale process and set-back will have adverse consequences for this years result compared to our initial budget but the Board has confidence in its core management and market position. We will resume the previous upward trajectory, the benefits of which will continue to become apparent over the next 12 months. The timing of the attempted sale was unfortunate and costly with the consequence that there will be no dividend for 2023.
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hardass PE

 

[Dona Ferentes]

.About a year ago the Board formed a view .. that we could conduct a successful sale at or about $6.00 per share. ..... The result of the sale process was disappointing with an offer emerging of $5.15, rejected by the Board last month.

well, there's some upside if another suitor emerges.... $4 seems to be where it's settled.

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NLH

 

[Dona Ferentes]

well, there's some upside if another suitor emerges.... $4 seems to be where it's settled.

off its lows ... $4.24

 

[Dona Ferentes]

EOL announces a fully underwritten capital raising to raise gross proceeds of approximately A$4.3m.

Highlights
- EOL confirms that it expects to meet (or exceed) revenue guidance issued at the H1 FY2024 report.
- EOL has returned to profitability from January 2024.
- EOL is launching a fully underwritten A$4.3m Capital Raising to strengthen its balance sheet and has received credit approval from its lender National Australia Bank regarding the extension of its financing facility to be executed prior to 30 June 2024.

The Company’s Chairman Mr Andrew Bonwick said “The Company is pleased to provide an opportunity for our existing shareholders to increase their holdings in the company through the Offer. The funds will support an acceleration of debt reduction.”

Equity capital raising
The fully underwritten capital raising will be comprised of a non-renounceable non-accelerated 1
for 28 pro-rata entitlement offer at an offer price of $4.05 per share.

The Offer Price under the Offer represents a discount of:
- 8.8% to the last closing price of $4.44 per share on Friday, 24 May 2024
- 4.3% to the 5-day VWAP of $4.232 per share as at Friday, 24 May 2024
- 4.3% to the 15-day VWAP of $4.231 per share as at Friday, 24 May 2024
 8.5% to TERP of $4.427
The Offer is fully underwritten by Unified Capital Partners Pty Ltd

..........................................bit suss ....