LPE - Locality Planning Energy Holdings

[System]

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]

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

 

[Dona Ferentes]

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]

Interesting little business, picked up a parcel this week.

 

[galumay]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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

 

[Klogg]

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]

Braver than me.

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

 

[Klogg]

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]

I'll raise you, my SGH holding.

Yep, from Tony.