Energy Action Limited (ASX: EAX), Australia’s leading energy firm, announced that it would be repositioning its Project & Advisory Services (PAS) division in order to enhance the operating model of the company as well as improve the financial performance, following the comprehensive review.
The focus of the newly positioned Advisory Services (AS) division will be on optimizing energy efficiency for commercial buildings. They will also be focusing on environmental reporting as well as the NABERs rating services for property portfolio clients. The company will also be engaging itself into embedded networks implementation.
All those activities that were related to head contracting on projects, project management, independent commissioning agent and engineering contracts including the upgrades which were often underperforming areas of the former PAS segment will be ended.
The company at present expects to execute the existing order book related to these activities by 30 June 2019. Post 30 June 2019, it will be referring to the partners for the remaining/outstanding work.
The company will be maintaining a specialist advisory services team. However, any changes in the operating model will be after the closure of the dedicated Canberra office of the company as well as the staff redundancies in Canberra and Melbourne.
As per the company’s estimation, a significant one-off item in relation to PAS repositioning will be around $0.7 million and will be expensed in the financial results for the period ended 30 June 2019. It will include the redundancies, lease termination for the Canberra office, provision of contracts linked to discontinued services as well as the cost related to restructure.
The change in the operating model will help the company in supporting the long-term objectives to focus on its core expertise in the energy market, data management and reporting services. Through these businesses, the company would be able to deliver more consistent, and higher-margin, recurring revenues. The company has maintained a lower cost base, and its platform is closely aligned to its Metrics reporting services. Based on it, the company believes that its Advisory Services is well placed to drive its future growth.
On 27 February 2019, Energy Action Limited declared its half yearly results for the period ending 31 December 2018. During the period, the operating NPAT reported a downfall of 63% to $0.89 million. The revenue during the period declined by 25% to $13.55 million. The operating EBITDA for the period was $1.76 million. The operating cash flow during the period was $1.94 million with the EBITDA to cash conversion of 111%. The company did not declare any dividend in the 1HFY2019.
In the previous six months, the shares of EAX has generated a negative return of 58.28%. However, in the previous one month, the stock has given a return of 5%. By the end of the trading session on 2 April 2019, the closing price of the stock was A$0.315, down by 3.077% as compared to its previous closing price. Today, the stock is trading flat at A$0.315 (as at 1:55 PM AEST, 3 April 2019). The company has a market capitalization of ~A$8.18 million with approximately 25.95 million outstanding shares.
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