All That Investors Need To Know About TPC Consolidated

TPC Consolidated Limited (ASX: TPC) is involved in providing retail electricity and gas services to residential and business customers along with pre-paid mobile and related services in Australia. Through its wholly owned subsidiary CovaU (utilities business division), the company operates in electricity and gas business in Australia with a focus on SME markets. ‘Hello Mobile’ and ‘Gotalk Mobile’ are the two brands dealing with pre-paid mobile services and delivering low rates for calls & data.

The company launched Energy retailer services in April 2014, and since then, its energy business is rapidly expanding. An authorised Australian Energy Retailer, CovaU (company’s wholly owned subsidiary) is looking after the delivery of gas and electricity to businesses and households in Australia, growing rapidly with key financial metrics trending in the right direction. In FY2018, the CovaU's energy business generated revenue of $76.8 million as compared to the revenues of $64.5 million in FY2017, being the largest contributor to the revenues and profits of the company.

As per the company, the embedded network business, iGENO, is expecting a relative downturn in take up rates within the next year due to current market conditions, which includes the downturn in the property market, particularly in New South Wales and Victoria. However, the company aims to reposition itself as a renewable energy source retailer. In its quest for progressing within the renewable energy space, the company has been taking steps to implement a power purchase agreement with a renewable energy farm in order to power its CovaU retail business, while also eyeing additional opportunities to establish its footprint in this space. The company has been in discussions with several companies regarding potential growth opportunities, where it can earn a reliable profit in the medium term.

Although with declining revenues owing to increased competition and resources diverted towards the energy business, the mobile business continues to remain profitable.

In FY2018, the revenue of the consolidated entity increased by around 16.4% to $80.2 million as compared to the pcp with the gross profit increasing by 15.2% to $14.3 million. The company’s net profit after tax (NPAT) for FY18 was $3.2 million, up by 291.1% on pcp. Over the year, the Net Assets increased by $4.4 million (up 1713%) driven by higher profits.

In its recently released half yearly results, the company reported revenue from ordinary activities of $39.28 million with net profit after tax of $0.2 million for the half year period. In its half-year report, the company has advised that its revenues are on track and it will be able to meet the expectations within the next 6 to 12 months.

The company’s Board of Directors consists of highly experienced Mr Greg McCann, a seasoned player with extensive experience with boards and senior executive roles along with 24 years of financial consulting experience with Deloitte Touche Tohmatsu. The company’s Managing Director and Chief Executive Officer, Chiao-Heng (Charles) Huang founded the company in 1996 and since then has successfully steered the company from a start-up to a public company, which was listed on ASX in 2007.

The company’s shares last traded at $0.650, with a market capitalisation of $7.3 million as on 13th May 2019.


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