Ann: Half Yearly Report and Accounts, page-31

The EGP Capital Feb & Mar newsletters offers some insight into LPE

The report for Jan 31, I presume written in early Feb after the Quarterly was released offers the following insights:

Their revenue was down 25% compared with what EGP were expecting. They noted the AER website clearly shows wholesale prices had dropped, but LPE failed to quantify the impact it had on their revenue. They spoke to management at length about the poor standard of their communication, to which management agreed and vowed to improve. EGP thought the market over reacted and were actively buying shares after the Quarterly.

In the Feb 28 report, I presume written in early March, they expanded further. They noted 2H would need $20m of revenues to make their guidance of $32m. Some of this would be made up of deferred projects they were unable to complete in 2Q until their loan was in place. This 2H $20m revenue would annualise to $40m which puts them back on a solid growth profile. They nominated targets they would expect LPE to achieve, they bought at $1 and expected $2 share price within 4 years. They believe LPE is still on track to do this. You can read in the article from the links below.

In their blog, also linked below, they say the lower wholesale prices probably made a revenue shortfall of $2m last Q. They said the wholesale costs reduced by about 10%, but the network costs by around 40%. Management also put the brakes on due to lack of funds, they thought the combination of those 2 things prevented sales being $9m + The delay in the loan had a big impact as they also have to set aside prudential funds for large DMC connections as well as pay for the connections.

Interesting EGP Capital were buying more and had long conversations with the company after the price drop. The directors also bought more at 46-7 cents. If it’s good enough for them, it’s good enough for me.

https://egpcapital.com.au/wp-content/uploads/2019/02/2019jan_final.pdf

https://egpcapital.com.au/wp-content/uploads/2019/03/2019feb.pdf

https://egpcapital.com.au/update320/

https://egpcapital.com.au/update319/