Demand for energy-efficient home improvements is being buoyed by a robust housing market, government incentives and rising levels of disposable income. Following significant strategic developments ahead of its Aim float last October, Entu UK (ENTU) - a supplier and installer of domestic solar panels, insulation, boilers and energy-efficient doors and windows - looks particularly well placed to benefit from these favourable trends. What's more, the low cash requirements of its business model mean shareholders can expect big dividend payouts as well as strong earnings growth, with management already promising 8p in the year to the end of October 2015, equivalent to a 6.6 per cent yield.
- 6.7 per cent forecast dividend yield
- Strong cash generation
- Low PE
- Significant growth opportunities
- Supplier risk
- Competition in fragmented market
Energy-efficient products are taking an increasing proportion of the £27bn home-improvement market and there's plenty of scope for future growth, with the Department of Energy and Climate Change estimating that 24m UK homes could benefit from loft insulation, 19m from cavity wall insulation and 27m from high-efficiency boilers.