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Week Ahead: Cash collection in focus at Utilitywise

Last updated: 14:07 18 Apr 2016 AEST, First published: 15:07 17 Apr 2016 AEST

Meters

The blue-chips news flow has a heavy mining bias this week, with operational updates expected from Rio Tinto, Anglo American, Acacia Mining and BHP Billiton.

Away from the blue-chips and the mining sector, Utilitywise will be looking to follow up last week's announcement of a partnership with Dell with further good news in its trading statement.

The independent utility cost management consultancy revealed in February that trading this year had been in line with management expectations, with continued revenue growth in both of its UK divisions as well as its European operation.

The group revenue pipeline was £24.7mln as at 31 January 2016, slightly lower than at the July financial year-end (£26.2mln at 31 July 2015).

The energy consultant head-count was 625. up from 610 six months earlier, while customer numbers had grown to 29,288 from 25,976 at 31 July 2015. 

Panmure Gordon is expecting half-year sales of £36.5mln and underlying earnings (EBITDA) of £8.4mln.

“Management guided to faster expected head-count growth in H2 than in H1 – where it had been 'slightly slower than expected'. The pipeline fell by 6% from Jun 15 to Jan 16, but we would expect it to show flat to modest growth since that time,” said Panmure's Michael Donnelly.

“What we really want to see to allow us to get more bullish, is improved cash collection on NON-extension business, although we think there is little prospect of this at these results. We hope for an update on the £27mln of net accruals (o/w half are two years distant). Management usually provided such an update, and the shares have taken to reacting accordingly,” Donnelly noted.

“An improvement in customer concentration would also be welcome,” he added.

Utilitywise's joint broker Liberum notes that in the second half of the last financial year it “pulled forward” £3.6mln of cash from a top five supplier by getting them to treat contract extensions in the same way as new customers wins.

“This helps the balance sheet and accelerates the 'normalisation' of the group’s cash profile over the next two years. Similar conversations are ongoing,” it observed.

Cyber-security specialist Corero Network Security has been a star performer this year, up two-thirds in 2016, on the back of a string of contract wins.

There is a danger that the positive news flow has raised expectations too high for its 2015 results, given the numbers will be all “rear view mirror”.

 

Significant announcements expected

Monday

Finals: City Merchant High Yield Trust PLC (LON:CMHY), Cityfibre Infrastructure Holdings PLC (LON:CITY), Eleco PLC (LON:ELCO), Mayair Group PLC (LON:MAYA), Netdimensions (Holdings) Ltd (LON:NETD)

Trading statements: Centrica PLC (LON:CNA), Plus500 Ltd (LON:PLUS), Reckitt Benckiser Group PLC (LON:RB.), Rio Tinto PLC (LON:RIO)

Tuesday

Finals: Defenx plc (LON:DFX), Electrical Geodesics (LON:EGI), People's Operator PLC (The) (LON:TPOP), Saga (LON:SAGA)

Interims: Associated British Foods PLC (LON:ABF), Connect Group PLC (LON:CNCT), McCarthy Stone PLC (LON:MCS)

Trading statements: Ashmore group PLC (LON:ASHM), BHP Billiton PLC (LON:BLT), Rio Tinto PLC (LON:RIO), Utilitywise (LON:UTW)

Economic: US – Building Permits, Housing Starts

Wednesday

Finals: N Brown Group (LON:BWNG)

Interims: ARM Holdings PLC (LON:ARM), Punch Taverns PLC (LON:PUB)

Trading statements: Evraz plc (LON:EVR), Hochschild Mining PLC (LON:HOC), Moneysupermarket.com Group PLC (LON:MONY), RELX PLC (LON:REL)

Economic: UK – Earnings, Unemployment. US – Existing Home Sales, Crude Oil Inventories

Thursday

Finals: Corero Network Security PLC (LON:CNS)

Interims: Acacia Mining PLC (LON:ACA), Sky PLC (LON:SKY)

Trading statements: Anglo American PLC (LON:AAL), Computacenter PLC (LON:CCC), Go-Ahead Group (The) PLC (LON:GOG), Meggitt plc (LON:MGGT), SABMiller PLC (LON:SAB), Segro (LON:SGRO)

Economic: UK – Retail Sales. US – Unemployment claims

Friday

Trading statement: Record PLC (LON:REC)


 

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