eEnergy is a leading B2B energy services business in the UK, supporting c.2,000 clients with their energy strategies across public and private sectors. We believe the energy crisis has combined with the Net Zero agenda to create a tipping point for action on energy security, costs, consumption and waste. After three years of significant growth and investment since listing on AIM, eEnergy looks ideally placed to play a leading role in the Net Zero transition. This is underpinned by a compelling proposition, which delivers energy efficiency upgrades that are paid for by the savings generated.
Today’s interims to 30th June (12-month period) confirm the continuing strength of demand, which we expect to drive sustained EBITDA growth and an improvement in free cashflow (estimated 10% free cash flow yield from 2025). In our view, medium term growth prospects are highly attractive and are not reflected in a very modest £20m market cap.
A modest P/E ratio (7.7x falling to 6.3x in FY24/FY25) appears to overlook the growth trajectory, with EBITDA expected to increase by 41% in 2023 and 30% in FY24 without factoring in the potential for M&A. A 7.5x EV/EBITDA rating would suggest Fair Value of 13p per share.
