eEnergy Group (AIM: EAAS ), has signed its largest single contract to date worth £1m.
eLight U.K., its wholly owned operating subsidiary, has secured a contract to install LED Lighting at four schools for a UK multi-academy trust.
The revenue will be recognised as the projects are installed, which is expected to be completed by 31 December 2020.
This contract win further underpins the Board’s FY21 revenue growth expectations for the whole financial year to 30 June 2021.
The Board is therefore also confident it can meet market expectations of achieving breakeven, at the adjusted PBT level, for 1H21 ended 31 December 2020.
Harvey Sinclair, CEO of eEnergy, commented: “We are delighted to have secured our largest contract willows of 6.13p in n to date. In addition to the strong momentum experienced in the first quarter, this new contract further underpins the Board’s revenue expectations for the full year to 30 June 2021 and reinforces our position as the leading provider to the UK education sector. Given their low level of conversion to LED lighting, schools continue to represent a substantial growth opportunity for eEnergy.”
Shares in eEnergy have performed extremely strongly over the past three months rising from 6.13p in September to close at 9.65p on Friday, prior to this contract win.
3 Reasons to Follow eEnergy
eEnergy was admitted to AIM in January 2020 with a declared strategy to develop eEnergy as a broader energy services company (Energy Efficiency as a Service “EEaaS”) and acquire other businesses in the energy management sector. The business is currently focused on providing ‘Light-as-a-Service’ (“LaaS”) to commercial customers and helps businesses and schools switch to LED lighting, typically for a fixed monthly service fee, avoiding any upfront payments.
For businesses and schools, the energy savings are greater than the monthly service fee, allowing them to unlock free cash-flow from day one as well as to improve the quality of their lighting and reduce carbon emissions. The Group procures, funds, installs and maintains the LED lighting, meaning the customer has no risk.
Rapidly Expanding Markets
The market in the EU for energy efficiency services was approximately €25 billion in 2017 and is expected to double by 2025.
In November 2020, eEnergy launched the ‘Green Energy Initiative’, a scheme focused on helping more UK schools, which are eligible for part but not full Government funding, to reduce carbon emissions and save money by switching to cheaper, efficient LED lighting.
The Initiative has been set up by eEnergy to work in conjunction with the Public Sector Decarbonisation Scheme ("PSDS"), a UK Governmental entity which provides grants for public sector bodies in order to fund energy efficiency and heat decarbonisation measures.
eEnergy believe only 20% of schools have upgraded to date, and expects to be able to increase its addressable market as the ‘Initiative’ will either make up any shortfall or fully fund the switch, using just its Funding Partners.
Advanced Supply Chain Logistics
In November 2020, eEnergy signed an exclusive OEM partnership with Venture Lighting Europe Limited ("VLE") to provide eLight-branded LED technology.
Chosen after a tender process which included some of Europe's leading OEM manufacturers, with a 35-year heritage, VLE forms part of Advanced Lighting Technologies, a US-based group which has 600 employees and an annual revenue of over $130m.
eEnergy believes an integrated supply chain for eLight will maximise operating efficiencies and is a significant market differentiator. In particular, it will hold dedicated stock lines for eLight, ‘significantly’ reducing the time that it takes to complete installation projects.
ESG Merger and Acquisitions Strategy
eEnergy has an active ‘Climate Action Initiative’ with energy efficiency marked as the #1 solution for many commercial buildings to reduce their energy consumption.
The Company has a declared M&A strategy in this space, which it expects to complement its core business and lead to an exciting ESG Investment Case for Investors.