Those who are regular readers of mine (I am being facetious) will know that I am not a great fan of MO. I have been to a few of these presentations and have always left feeling a little underwhelmed. Credit where it is due todays presentation had much more direction and an idea where the opportunities lie. The guy who gave him a going over hit the nail on the head when he said we need to see the revenues now. Without mentioning CETO look at the potential contracts that could be coming out way:
Defence base contracts – we have won 3 already – upgrades in the works for both Delamere and garden island – and obviously the more the defence department moves towards this model the more bases we would be at the forefront of winning. With a quick Wikipedia search I counted 20+ potential microgrids
CSIRO array – 18 more need to be built – it being so technical and having won the first then surely we must be front runners for a large proportion of these
Aboriginal Communities – with the relationship already in place we must surely be at the front to deliver the next projects. The IBA is a government department so it will move slowly but the amount of communities would be dozens if not hundreds.
Pipeline of 200MW of BOO (of which I suspect 100MW is one project)
80 stand alone power systems going out to tender soon. Given that CCE has done all 12 already I think it fair to say we could get at least half of these. And long term if they move to 15,000 then that is a significant market. As he gave a 10 year time frame we are looking at 1500 a year.
They are all fairly concrete and I would be confident that they will materialise into fairly substantial revenue. I liked the “blue sky” opportunities. The fact that Lend Lease needs to be educated on what CCE can offer provides further potential growth. The Indonesian/overseas market place could potentially be huge and if Mauritius finally delivers what a great model to demonstrate CCE capabilities. The changes in the Mining industry, along with the cost savings, is another significant potential area and not just in Australia.
All of this without mentioning wave. I remember a quote attributed to Fitzpatrick saying that the company has the structure right it now just needs to execute.
I can’t see the share price sky rocketing in the next six months. What I would say is that if they can build these projects the share price will slowly build momentum that it will one day pop IMO. It is just how long will it take?.
CCE Price at posting:
3.0¢ Sentiment: Hold Disclosure: Held
