Ann: LPE Announces FY18 Results, page-17

The preliminary report was encouraging in most aspects but disappointed in missing revenue guidance of 22m.
LPEs business model to their credit passes on wholesale price reductions to consumers, so reducing their revenue for a fixed quantity of Gwhrs. Looking at the graph below it appears the drastic reduction in wholesale costs is the main reason for the missed guidance, but importantly worth noting the gross profit margins are maintained.

A gross profit margin of 24.5% is well above baseline predictions of 18.2% @ a commendable 34.6% above, which will have a material effect on profits if maintained.. As a minimum it confirms the 18.2% margin as conservative and fully achievable into the future.

On the loss of 1.4 m compared to the underlying 2.5m in the previous year, the 1.1m improvement is pretty good, when considering the additional resources that have gone into the new offerings, Direct Market Customers, Locality Embedded Networks Pty Limited and the soft launch of new products like the innovative solar offer. (“substantial investment in new and future product offerings” in LPEs own words)
It helps to remind that LPE is not a your typical staid electricity retailer, but more of a nimble and creative type. With a reliable and steady base income in place they can now afford to expand to where the opportunity lies.
However I am looking forward to the announcement on “funding solution to replenish cash reserves”, as the fear of a capital raise rather than debt finance is acting as somewhat of a hand break to my purchases