Australian (ASX) Stock Market Forum

Solar stocks - when will Australia wake up?

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sunboy said:
New directors were announced, which want to bring Solco to the top. With the new high potential directors, Solco is now ready for the run towards a new record year. The conditions are set, now the stock price has to increase fundementally.
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Solar Pumping sales were down and Solco seem to make little profit. I don't doubt the companies ambitions and laudability, however, how can they expand rapidly without Government backing?
 
The concept of Solco is clear and there are serious objectives now with the influence of the new directors. Solco don ´t need the government, they are international wide spread and the product placement in new markets is very successful (at the moment in Africa). It ´s better to read this interview from yesterday. The stock price will increase with this management-very obvious.



12.04.2006

Solco Ltd's Directors have been interviewed by Corporatefile.com.au on Solco's corporate strategy. This is a record of the interview.
corporatefile.com.au

Solco Ltd announced last week the resignation of the Managing Director, Duncan Stone, "because of conflicts with the Board over the business direction of the Company". Can you confirm that the disagreement was over acquisition strategy?


Chairman Robin Forbes

The Board’s prime objective is for Solco to be profitable as soon as possible. Whilst Choice Electrics and the Solco Manufacturing Systems (SMS) international business are profitable, the solar pumping and hot water businesses are underperforming and require management focus. This needs to be addressed before we embark upon the next stage of the acquisition program, such as that Duncan proposed. While we have many growth opportunities, acquisitions at this time distract management and we need to get back to basics in the short term and focus on good growth opportunities in the existing businesses.

Our shareholders not only expect us to access the blue sky potential of our decentralised sustainable solar power and water solutions for underdeveloped communities, but also to deliver profits and dividends. We’re very much focused on achieving these two goals in concert and the strategic review that we’ve been undertaking for some time will help us deliver them.


corporatefile.com.au

Is the vision of becoming a global leader in the distribution of decentralised sustainable water and power solutions still a strategic growth pillar?
Chairman Robin Forbes

Yes, we continue to see significant potential to build an international distribution network for our products such as the solar pumps, water purification systems and solar lighting, from the foundation of existing relationships with our SMS licensees. However we want it to be a cautious, balanced expansion that’s focussed on the most prospective markets. We’re actively marketing in Africa at the moment.


corporatefile.com.au

How will you achieve market penetration in the underdeveloped countries of Asia and Africa? Is funding available for your products?
Chairman Robin Forbes

The key to reducing poverty in developing countries, such as those in Africa, is to give the communities control over their supply of power and water. By providing self sustainable water and power solutions that use the resources at their disposal, instead of reliance on imports, living standards can be improved. Our successful clean water purification projects in Sri Lanka and The Maldives and our water pump and home lighting projects in East Timor are proof, plus our recent visits to Africa confirm, that we have those solutions.

There is significant funding available through the initiatives of the G8 and the UN’s Millennium Development Goals programme as well as programs sponsored by the World Bank, national governments and major industrial companies to empower local communities in developing countries.

We’ll access these markets through our SMS licensees and also through new initiatives, such as selling to a government agency or a mining company that has a charter to make a contribution to the local community. Our licensee in Mauritius has good connections in Africa which will help open the market for us and has been helpful in other areas as well.


corporatefile.com.au

What scope is there to improve performance in your current businesses? What will be your operational focus?


Non-Executive Director John Beech

We’re planning to structure the business into two divisions; Power, which is the national Choice Electrics solar power products distributor, based in Brisbane, and Water, which is based in Perth. Water includes Hot Water Systems, Solar Pumping and the SMS business.

Choice, with an annual turnover of $9 million, is a disciplined, profitable business which has grown steadily over the last 23 years. While we acquired Choice in March 2005, it has not been fully integrated into the Solco businesses.

We’ve set up an executive group, including Choice managers, to manage and integrate the strategy of the two business units, to improve operational disciplines and communications. Already Choice management has had some valuable input into the West Australian Water operations.

The executive group is focusing on refining our Solar Pumping and Hot Water System business models to ensure our products are targeted at the markets with the greatest potential. Our Pumping strategy needs to be more focused on selling to industry. We need to integrate our pump and hot water sales in Australia, particularly on the east coast, where we may be able to leverage Choice’s disciplined business systems and extensive distribution network of over 150 dealers. We need to consider adopting the Choice process of selling products in kit form for customer installation which is more efficient and flexible than the customised engineering and installation of the Solco products.

The strategic review has also put group overheads, which have been too high, and working capital management, under scrutiny. We decided in late 2005 to outsource parts of our manufacturing and we may be able to make greater savings by additional outsourcing assembly closer to regional markets. We need to reduce our freight costs.

The Hot Water Systems business needs to focus more narrowly on the markets in Australia where we are most competitive, such as areas which are frost prone, have poor water characteristics and low and medium water pressures rather than competing with the leaders in the mass market across the product range. Our research indicates that the opportunities overseas are much greater and therefore our best option may be to invest more in marketing our SMS licenses and related businesses.


corporatefile.com.au

The Solar Hot Water and the Solar Pumping divisions made losses in the December 2005 half year. What factors contributed to these losses and what is the outlook for these businesses?


Non-Executive Director John Beech

Both businesses failed to reach sales budgets and our overheads were too high. The Solar Hot Water division felt the drop in government rebates to new home owners and also suffered from low margins reflecting a long term contract with a major builder that predates our acquisition of Solco. There were also redundancy costs arising from the move to outsource assembly and reduce overheads.

While there’s been an improvement in hot water sales in the March quarter and the low margin contract has finished, the world wide shortage of photo voltaic cells has been a problem. Production costs, however, will be lower in the current half year.

Solar pumping sales to the rural sector have been impacted by mild summer weather conditions.


corporatefile.com.au

Growth by acquisitions has been one of the three pillars driving Solco’s strategy. Given the recent management change, can you provide an update of your acquisition policy?


Non-Executive Director John Beech

There are a number of companies that we’ve identified that would fit well with our operations, particularly the Water Division, some of which are not big acquisitions. It may not be long before our revenues and profit base are sufficiently strong enough to justify activating a modest acquisition strategy.


corporatefile.com.au

Mr David Richardson, a former senior executive of the large engineering firm WorleyParsons Ltd, was appointed to the Board in February. What was the rationale for his appointment?


Chairman Robin Forbes

David has a strong strategic and operational business background with experience in global markets which will be important to the ongoing development and successful execution of Solco’s strategy to become a major participant in the global sustainable energy and water market. He’s very focused on the bottom line.

He has a track record of profitably managing his own start up business and growing it to be a very significant enterprise within a public company which will enable him to support our chief executive.


corporatefile.com.au

What are your plans for filling the role of Managing Director?


Chairman Robin Forbes

We need a chief executive to closely manage profit growth in our Power and Water divisions and also to develop growth opportunities, whether by acquisition or building on the opportunities to develop existing businesses. While John Cooper, General Manager of Choice Electrics, is filling the role temporarily, we don’t want him to be distracted from taking advantage of several significant short term opportunities for growing Choice. We expect to announce a replacement for Duncan soon.


corporatefile.com.au

Thank you, Robin and John.

For more information about Solco Limited, visit www.solco.com.au or contact Robin Forbes on (08) 9268 2813 or John Beech on 0400 10 3675.
 
Solco really needs a rights issue or a number of share placings to raise cash. That would help them on the acquisition front.
 
Just had a look at the Solco web site. Interesting products but the web site is VERY lacking where it comes to actually pushing sales of the product. I looked at the water heaters mainly.

To be blunt, it looks like the site was put together by a bunch of people who have meetings to "define the process" or "form a committee". In other words, people who know nothing useful in a technical sense. It's pretty basic to state things like the capacity of the water heaters as that is absolutely basic info on the product that practically any purchaser would want to know. Even those without a clue as to how a water heater actually works would generally want to know what the capacity of the storage tank is.

Lack of technical and layman's terms "product selection" info is alarm bell number 1 for me.

Number two is having the share price displayed prominently on the home page. The share price is the LEAST important thing as far as purchasers of the product are concerned and yet it is the only meaningful factual detail they are able to supply. But it's irrelevant to most.

Overall I'm very enthusiastic about renewable energy, particularly solar water heating. Some of the products made by Solco look decent and innovative (especially the polymer solar HWS). But the web site looks decidedly like the aim is to push up the share price rather than actually selling the products and run a profitable business. An awful lot of "spin" and too little detail IMO. For that reason I'm wary of the company as a long term investment (though it might be good for trading short term) to say the least.

I suggest that as far as selling water heaters is concerned, Solco ought to take a look at the web sites of rivals such as www.rheem.com.au which provide plenty of easily accessible information for consumers.
 
I want to admit, that 70% off all greater companies made the stock price visible on the homepage. That ´s normal and very informative to see this on the first sight. If you want to get informations about the technics, write an email to solco and you will get an answer within one day.
Solco will rule because renewable energy is just at the beginning in Australia and the products have a high standard and innovation. Don ´t forget, this month Solco will announce the results of the last quarter. Stay long!!
 
Read this and realize the potential of Solco:

--------------------------------------------------------------
This story was printed from ZDNet News, 21.04.2006
located at http://news.zdnet.com
--------------------------------------------------------------

Oz homeowners following the solar road
By Reuters
URL: http://news.zdnet.com/2100-9595_22-6063957.html

Australian homeowners are setting the price for the government\'s mandate to produce more green energy by snapping up solar water heaters and selling the credit they get to more reticent power firms.

With Australia resisting any cap-and-trade scheme or carbon emissions limits after opting out of the Kyoto protocol, the $100 million market in renewable energy certificates (RECs) is the closest the nation comes to trading green power.

About 120,000 Australians have registered solar hot water heaters to earn RECs, which can be sold to power retailers responsible for meeting the government\'s mandatory renewable energy target of 9,500 gigawatt hours--about 2 percent of expected generation capacity--by 2010.

The enthusiasm for solar water heaters means the target will be reached well before time, while the growing number of users, usually selling their RECs through agents, mean they have an unusual influence over spot REC pricing, now around A$25 ($19).

"It\'s quite unique to Australia that you have the small guy involved in driving the price," said David Rossiter, Australia\'s Renewable Energy Regulator. "They\'re a fast-growing group and are second only to hydro in terms of REC registration so far."

Spot REC prices have fallen about 30 percent over the past year as retailers such as The Australian Gas Light Co. and Origin Energy invest in their own renewable generation. But analysts say long-term contract prices for RECs still range between A$20 and A$40 ($15 and $30) depending on volume and timing.

The market is minuscule compared with the multibillion-dollar European carbon credits market, which this week touched record peaks as oil prices hit highs, encouraging generators to burn more emissions-intensive cheap coal and then seek credits to meet more onerous limits than Australia\'s.

About 20 percent of the 15 million RECs generated to date have come from water heaters. But they represent a proportionately higher share of certificates in the market as hydro or wind units tend to be tied to retailers looking to grow their own RECs.

The renewable energy scheme was introduced in 2001, requiring electricity retailers to include renewables in their power portfolios or buy RECs. The value of RECs has supported a mushrooming in wind-powered generation schemes in particular.

Australia\'s sunny days--an average of more than 300 per year--and expansive spaces make it a natural hotbed for solar power.

"Our climate is very conducive to solar energy," said Bill Parker of the Australia New Zealand Solar Energy Society. "There\'s a lot to be gained from harnessing passive solar potential and using the sun to heat our water and our homes."

New homes in most Australian states must now be fitted with some form of solar hot water technology, while--in addition to RECs--there are state-based price discount incentives for someone looking to install a heater in an older property.

Most systems, made by companies such as Australia\'s Solco, Edwards or Beasley Hot Water Solutions and Rheem Manufacturing Co. of the United States, use unobtrusive solar roof tubes or panels linked directly to hot water storage tanks.

Peter Meloy of New South Wales first fitted his roof with solar tubes that garner the sun\'s rays to meet all his hot water needs, and he\'s since moved up to a more advanced photo-voltaic system that, on sunny days, can help him generate a surplus of electricity that he sells back to the grid.

"I never expect to pay for power again. Photo-voltaics are more expensive so they\'re not for everyone, but it\'s a talking point when you can say to friends that you actually sell electricity back into the grid," said Meloy.

But enthusiasm from homeowners dreaming of self-sufficiency has not been matched by the power industry, which remains deeply tied to dirtier--but cheaper--coal-fired plants to generate more than 80 percent of Australia\'s electricity.

Uncertainty about the long-term policy on carbon emission caps as well as volatility in REC pricing can mean buying RECs, rather than directly investing in renewable generation, is the most feasible alternative for all but the largest retailers.

Last year the government extended its renewable energy target to 2020, but it has been criticized for its refusal to raise the 9,500 gigawatt-threshold to reflect growing energy demand.

"The mandatory scheme was innovative," said Ian MacGill, senior lecturer at the Center for Energy and Environmental Markets at the University of New South Wales.

"But higher targets are needed to show real commitment to renewable energy and the environment."

Story Copyright © 2006 Reuters Limited. All rights reserved.
 
sunboy said:
When will Australia will wake up. The solar stocks are so cheap as nowhere else I guess. The sun is our future. I hope the stock owner will now realise the chance of several stocks. My absolute favorite is Solar Energy Solco Ltd. The fair value of the stock is about 3 $. I have contact to guys from Germany, Austria and Sweden and they can ´t understand, why the solar stocks are deeply ignored. We should start a solar invasion. The best moment is now, because perhaps in the summer it would be too late. I bought 100.000 stocks of Solco yesterday and the results of the last half year will come next week. From 2004 to 2005 they increased their revenue by 358%. Incredible.
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Solco looks very much like a stock of the future. Very much a long term hold and may not do that much with new technology allowing better use of sub-bitumous coals and lignite. Holders may well have to stump up a lot more cash on rights issues to get the company into open water. Good luck anyway
 
All solar stocks are falling but solco is keeping stable and will raise further. There is a high potential, solco will now run.
 
As a logical consequence two famous stock letters in Australia have predicted a high performance for the next weeks ( market outperformer) and they predicted a stock price of 0,85$ and 1,45$ for the next half a year. The value of solco is definitely too low considering the revenue, market situation and signed contracts for delivering solar pumps and further solar technique for water clean-up and warming. The result: strong buy. I have long waited for this week but now it will start.
 
Sunboy,

The stock may well move up to those price levels - but you may also be making one of the classic trading mistakes - ie believing in a stock.
You can't will the price up. You have fallen in love with the SOO.
The value of your 100,000 shares bought in March has hardly changed.
Meanwhile, an entry on a clear ZFX breakout in March could have yielded
a %50 plus gain.

Have you worked out when you would exit if the price stays flat?

Good luck with it anyway. I'm also a fan of alternative energy stocks but would look for clear signs of strength (technical) before entering.
 
I hope we follow Germany this week. If we do so, we should reach 0,50 $ this week, then we would be on the same level as dyesol and that is justified. THis week strong buy, Australia and Germany should go side by side.
Good week solcofans
 
The first step is done. 14% yesterday, we are on the best way to 0,50. This week news should come through, for example the contract in Africa should be finished. Germany is in love with SOlco at the moment. The volume is very high and as cheap as now the stock won ´t be for the next years. This morning high orders are in the market. I guess it is the last chance on the way to 1 $. I know stocks in the same field which have a 600% higher stock price than Solco and the hype is still going go. This is the stock of July.
 
Yes, I am still holding, because I am convinced of this stock. Solco was pushed in Germany two weeks ago and than within two days the selling occured of the community of this push letter. From this actions the sell pressure appeared. Solco is a interesting company and after a normalization-we don ´t need any push action- we will reach again 0,24$. By means of a profit next year we could reach 0,60$ but it takes time. At the moment the stock price is very cheap and I will buy tomorrow again. Solar and water is still future. Several Solcofans and me are bullish. Bye
 
Solco back again.

After a recapitalisaton and hopefully a new business optimisation, we are back on the road. I think we have to find a bottom but after that, provided that revenue and profit will increase, we are on the way back to new heights. A lot of trust was lost, but we hope Mr. Richardson has done well. The current stock price shows that solco is not going towards 0,01 cent, there is future within the stock. I think we ´ll have a lot of fun with Solco after fulfilling their targets. The course is set. I will buy again tomorrow and Australia should invest and wait. Although we have a high risk, no other solar stock has such a tremendous chance for multiplication.

Make hay while the sun shines. Good luck, this is no push, only my opinion.
 
Some great ramping in this thread, i hope no one listened to you otherwise they would have got burnt. Solco trading below 10 cents atm.
 
hi sunboy, I'm a big fan of renewable energy, but lack knowledge about the investment options in solar energy in the ASX.

could you outline the stocks that deal with solar, and what makes Solco your pick of choice in this sector?
 
Caliente said:
hi sunboy, I'm a big fan of renewable energy, but lack knowledge about the investment options in solar energy in the ASX.

could you outline the stocks that deal with solar, and what makes Solco your pick of choice in this sector?
Click to expand...
Caliente, good to hear your a fan. There are a few comps on the ASX that own renewables infrastructure. VIR- Viridis group is one (who are promising a div of 10c for the coming year... 10%) they have recently done a share placement for some acquistions. They are well diversified across a few sectors (Wind, Biomass and Process gas) and locations (USA, UK and Germany) but are a pretty small player only ~160 MW combined capacity.
So I'd imagine their admin/operating costs are relatively high. Share price is done for the last 12 months, but it looks to me like it wil hit support at ~95c.

Babcock and Brown have their own renewable energy portfolio (BEI) which I know nothing about, but I'm sure it'd be bigger.

I'm also looking at investing in renewables, but I think overseas (Europe primarily) has greater opportunites at present. But, thrilled that your interested in the industry :D
 
So Solco is back. The financial report from today shows, solco got a profit of 0,37 Mio for the first three months. The recapitalisation and the new structuring of business is now working. Solco has done the right things just in time, they are back on the way. Now it ´s only a question of time when this positive news are helping the stock. We ´ll have great fun with this solar stock. I ´m buying,back to 0,40 $.
Solco is future.
Bye

The current stock price is 0,071$, for comparison reasons later.
It won ´t get cheaper. :) :) :)
 
sunboy said:
So Solco is back. The financial report from today shows, solco got a profit of 0,37 Mio for the first three months. The recapitalisation and the new structuring of business is now working. Solco has done the right things just in time, they are back on the way. Now it ´s only a question of time when this positive news are helping the stock. We ´ll have great fun with this solar stock. I ´m buying,back to 0,40 $.
Solco is future.
Bye

The current stock price is 0,071$, for comparison reasons later.
It won ´t get cheaper. :) :) :)
Click to expand...

Solco reported a positive operating cashflow of 37c not profit. Solco looks like a dud to me. At least management is honest though, first line in the last annual report.

"The Group has experienced a very poor year in 2005/06. Disastrous performances in the Water Division and at the corporate level have placed the Group in a precarious financial position despite strong revenue
growth and profits in the Power Division."

Solco is yet to report a profit in its history of existence. Look for another stock Sunboy.
 
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