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Pod Point charges ahead on home front

EV charging infrastructure company saw revenue jump but losses deepen
Pod Point charges ahead on home front
  • Company has an 18 per cent market share of installing chargers at people's homes
  • Commercial clients include CBRE, Lidl and Tesco

Looking at shares in a loss-making company such as Pod Point (PODP) requires some suspension of disbelief.

The London-based provider of charging points for electric vehicles made solid progress in generating revenue, which increased by 86 per cent over the course of last year to £61.4mn. However, its pre-tax loss widened by a further 11 per cent and after 12 years in business it remains some way off making a profit. Although the company declared a positive adjusted earnings figure for last year, broker Numis does not expect the company to make a pre-tax profit – even after discounting amortisation – until 2025.

Clearly, investing in a company that seems so far from profitability requires faith, especially if it’s in a sector with a range of well-backed competitors. Some of these, such as BP’s Pulse and Shell’s Recharge, also have the added advantage of owning large existing networks of refuelling points, also known as petrol stations.

Yet Pod Point has its own competitive advantages. Its business selling charge points to people’s homes almost doubled in size to £40mn last year and the company said its share of this market grew by two percentage points to 18 per cent.

It also has a 4 per cent share of the market installing charging points for commercial customers – like parcel delivery firm Hermes, property manager CBRE and supermarket chains Tesco and Lidl.

A third arm of the business rents space from site owners to install charging points at other locations, then charges customers for the electricity they use.

Pod Point raised £100mn through its stock market flotation in November last year, with the bulk of the proceeds earmarked to fund growth. It plans to spend about £47mn rolling out charging points and £20mn on product and software development. 

Charging electric cars at home can lead to hefty increases in household energy bills, so it is developing software allowing customers to more efficiently manage tariffs. The rollout of charging points, meanwhile, will include more investment in rapid charging points for apartment buildings and other busy spots. Both of these should add to its recurring revenue stream.

PodPoint’s shares are trading below the IPO price of 225p and its current market capitalisation of about £315mn works out at roughly five times revenue. Although nowhere near as bullish as broker Numis, whose 385p target price implies a valuation approaching £600mn, we think this is a reasonable price to pay for a business that has established a firm foothold in a fast-growing market. Speculative buy.

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POD POINT (PODP)   
ORD PRICE:207pMARKET VALUE:£319mn
TOUCH:206-207p12-MONTH HIGH:292pLOW: 188p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:130p*NET CASH:£91.5mn
Year to 31 DecTurnover (£mn)Pre-tax profit (£mn)Earnings per share (p)Dividend per share (p)
2017nananana
2018**11.9-7.1-0.03-
2019**17.3-6.9-0.02-
202033.1-13.0-0.12-
202161.4-14.3-0.13-
% change+85---
Ex-div:-   
Payment:-   
*Includes intangible assets of £107m, or 70p a share ** Figures for Pod Point Holding Ltd