It's no secret the UK is expected to face an energy-supply shortage over the next few years. Independent gas-to-power producer Alkane Energy (ALK) plans to capitalise on this by rapidly growing production organically and through acquisitions, in anticipation of higher prices in the coming years.
Alkane's installed generating capacity rose 19 per cent to 83 megawatts by the end of 2013, thanks in large part to the £7.5m acquisition of the Maltby colliery operation in May. This drove a substantial increase in turnover and a 17 per cent increase in adjusted pre-tax profits year on year, although EPS was flat, reflecting dilution from equity-funded acquisitions.
Still, average power prices were flat on 2012 and market rates have actually been falling gently over the last few months. That's partly because coal-based power generation has increased to take advantage of the hydrocarbon's tumbling market price.
Alkane's capacity growth nonetheless looks set to continue apace in 2014, judging by the £1.5m acquisition of a power-response site this year. Broker VSA Capital forecasts adjusted pre-tax profits of £4.1m this year, giving adjusted EPS of 3p - up from £3.4m and 2.6p last year.
ALKANE ENERGY (ALK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 42p | MARKET VALUE: | £52m | |
| TOUCH: | 41-43p | 12-MONTH HIGH: | 52p | LOW: 28p |
| DIVIDEND YIELD: | 0.5% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 27p | NET DEBT: | 38% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 6.3 | 2.1 | 2.2 | nil |
| 2010 | 6.6 | 1.3 | 1.9 | nil |
| 2011 | 9.5 | 1.7 | 1.9 | nil |
| 2012 | 14.7 | 2.3 | 2.4 | 0.1 |
| 2013 | 20.6 | 2.7 | 2.4 | 0.2 |
| % change | +40 | +17 | - | +100 |
Ex-div: 23 Apr Payment: 30 May | ||||
