EPW (ASX) Ann: FY17 Half Year Investor Presentation

Originally posted by Strawman68 ↑

interesting abit of a difference between highest and lowest of the reports $1.05 to $1.15 to $1.28.

Anyway on another point - and please anyone correct me if I am wrong, but it seems to me to be the general consensus on here that the AUS retail business is at its cap and margins are declining probably with competition or for other reasons. I am not sure their additional services business really is going to do too much in that realm either.

However, it would appear from what I have read, everyones or most everyone, is that USA is where the growth and hopefully increase in share price will come from. Does anyone know if their market/system/retail industry etc is similar or widely different from AUS. Obviously its a much much bigger market than AUS and I suspect the players dwarf the likes of ORG and AGL etc. So would appreciate anyones thoughts on that as what EPW has said so far confuses a little bit, except I understand its a way bigger market.

I suppose both short term and long term there are impacts. Short term - well we have the Trump what appears to be circus and whilst its only been 6 weeks since he actually got in the seat, do you think he will actually deliver on his promises and if so, when, and what impact will that have on the electricity retail industry, if any, and therefore on EPW's growth and profitability over there.

Long term well that is a bit harder but I ask the question every month I see extreme weather events happening over there, more so than in AUS, like tornados, snow blizzards, flooding, fires, earthquakes whatever, it seems they are prone to more volatile weather events then we are - or maybe its just the media that portrays that. If they are more volatile - does that bode good or bad for EPW over there... As I know in AUS when there is really volatlile stuff the electricity price goes up to like $13 or $14000, instead of like $80 or $90 and I suppose if your not hedged you can take a haircut very quickly like some of the smaller retail players who went out of business a while ago. But just wondering if anyone had any idea of over there, or if maybe someone has investments in electricity businesses over there that may shed some light.

Any thoughts - and please correct me if I am wrong in that the general consensus isn't that USA is where the future lies.

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Plenty of volatility. US focus is in ERCOT so start there. Prices published as they are here and easy to find on web. 15+ days in last twelve months with peak prices over $7,000 per MW. Offsetting that though are many more demand management programs and while many are not perfect they are large scale program. While growth in the US is great we have heard that story in AUS for a long long time and only now is the market realising that ERM lead with price (i.e. margins) so now they are left with out growth and lousy margins. Recent announcement moderated both growth and margin expectations in the US.

The interesting thing about services is where retailers are pushing in down this path in the US they are driving with huge programs - programs that have take up in the tens of thousands per season or per program push. When you see that from devices in ERM that will signal they have a strategy in that delivers for the customer and hopefully for ERM and that may signal a new direction.

Until then ERM is picking up pennies in front of a steam roller.

Stock is oversold here for those that want to trade (not invest).

Ann: FY17 Half Year Investor Presentation, page-40