Negotiating shorter payment terms with its energy suppliers meant that Utilitywise (UTW) significantly enhanced cash generation last year. Operating cash flow grew to £12.4m during the 12 months to July, compared with a £2.5m outflow the previous year. This supported a generous dividend increase and almost eradicated the energy procurement specialist's net debt. Management is now pushing for 85 per cent of revenue from supplier contracts to fall due on the signing of an extension - up from 80 per cent - to match the group's own revenue recognition policy.
Despite growing its energy consultant numbers slower than management hoped, the core enterprise division increased its UK and Ireland order book by more than a third to £85m. This pushed cash profits up a fifth.
In the corporate division, which caters to larger customers, sales were up 7 per cent to £15.6m. A full-year contribution from t-mac Technologies, a cloud-based energy monitoring and controls provider, helped. However, lower-margin work related to the Energy Savings Opportunity Scheme - which mandates a certain number of energy audits for some organisations - meant that cash profits declined almost half to just £2.7m.
Analysts at house broker FinnCap are forecasting adjusted pre-tax profits of £19.3m and EPS of 19.8p for the year to July 2017, up from £17.8m and 18.5p the previous year.
UTILITYWISE (UTW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 130.5p | MARKET VALUE: | £102m | |
| TOUCH: | 130.25-131p | 12-MONTH HIGH: | 207p | LOW: 112p |
| DIVIDEND YIELD: | 5.0% | PE RATIO: | 6 | |
| NET ASSET VALUE: | 76p* | NET DEBT: | 0.3% | |
| Year to 31 July | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 14.7 | 3.8 | 5.2 | 1 |
| 2013 | 25.3 | 6.2 | 7.5 | 2.6 |
| 2014 | 48.9 | 11.7 | 13 | 4 |
| 2015 | 69.1 | 14.1 | 14.9 | 5 |
| 2016 | 84.4 | 18.4 | 20.5 | 6.5 |
| % change | +22 | +30 | +38 | +30 |
Ex-div: 24 Nov Payment: 19 Dec *includes intangible assets of £34m, or 44p a share | ||||
