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ERM Power (EPWX)

Business description

ERM Power is an Australian commercial and industrial energy retailer and trader. It operates an electricity supply business and two gas-fired generation plants. A key area of growth is energy solutions, while the company recently announced the sale of its US business.

Investment summary

ERM Power is refocusing its business on the core Australian activities, with the recent announcement of the sale of the US business for A$38m and the completion of the acquisition for up to A$16m of Out Performers, a provider of energy services to large energy customers. We recently revised our estimates, raising our forecasts for FY19-21 underlying net income from continuing operations by 6%, to reflect earnings accretion from the acquisition of Out Performers and cash inflow from the sale of the US business.

Last updated on 29/11/2018

Y/E Jun Revenue (A$m) EBITDA (A$m) PBT (A$m) EPS (fd) (c) P/E (x) P/CF (x)
2017A 3127.0 78.4 14.7 (10.5) N/A 2.5
2018A 2047.0 97.5 43.1 12.0 13.2 N/A
2019E 2074.0 96.7 39.2 11.2 14.1 3.2
2020E 2133.0 107.1 49.4 14.5 10.9 3.9

Last updated on 21/11/2018

Latest video

Executive interview - ERM Power

Industry outlook

While electricity supply activities in Australia remain very competitive with limited growth opportunities, ERM Power has experienced significant positive momentum which led to a double upgrade to Australian medium-term profit guidance over the last 18 months. The energy market in Australia (and globally) is undergoing significant transformation as a result of the energy transition, the emergence of new technology and customer demand for higher energy efficiency and sustainable solutions. We expect the growing Energy Solutions business to take advantage of these changes.

Last updated on 29/11/2018

Key management

Jon Stretch, CEO
James Spence, FD
Olga Alexandratos, Investor Relations

Company address

Level 52, 111 Eagle St,
Brisbane
QLD 4000
Australia
+61 7 3020 5100
View website