Locality Planning Energy Announces Strong Financial Performance and Share Buyback Plan
LPE (LPE) Share Update July 2024 Monday 22nd
Locality Planning Energy Reports Positive Cash Flow and Announces Share Buyback
Locality Planning Energy Holdings Ltd (ASX: LPE) has reported a successful quarter ending 30 June 2024, with positive cash flow and plans for a share buyback.
Instant Summary:
- Positive cash flow for FY24 June Quarter and full FY24.
- Net profit guidance for FY24 between $1.95m and $2m.
- Expectations for FY25 profitability to significantly exceed FY24.
- Commencement of share buyback in Q1 FY25.
- New CEO Scott Taylor has joined LPE.
Quarterly Performance
Locality Planning Energy Holdings Ltd (ASX: LPE) has reported positive cash flow for the FY24 June Quarter and the full fiscal year 2024. The company funded all capital growth works in FY24 through working capital and plans to continue this strategy into FY25. Subject to the completion of their audit, the Board maintains its guidance for FY24 net profit to be between $1.95 million and $2 million.
The Board expects profitability for FY25 to significantly exceed the levels achieved in FY24. Additionally, LPE plans to commence a share buyback in the first quarter of FY25, which will be funded by cash flow and cash reserves.
Leadership and Strategy
Scott Taylor has commenced his role as the new CEO of LPE. The Board is confident about the company's future under his leadership, given his extensive industry experience. The Board will share its revised strategy for the future of LPE in detail with the release of its Annual Report, prior to 30 August 2024.
Financial Metrics
During the quarter, LPE reported cash inflows of $10.4 million, comprising $9.5 million in customer receipts and $0.87 million from closing the electricity hedge book. Product manufacturing and operating costs were $7.5 million for the quarter, a reduction of $1.7 million compared to the third quarter of FY24. All other costs totaled $2 million, which included an extra pay cycle over the third quarter of FY24.
Takeover Offer
On 19 July 2024, River Capital Pty Ltd announced that it would not be extending its unconditional takeover offer beyond the scheduled close of the Offer Period. The Offer will expire on 26 July 2024. The Board of LPE has consistently advised shareholders to reject the Offer, believing that the revised offer price of 10.5 cents per LPE share significantly undervalues the company. LPE shares continue to trade above this revised offer price.
The announcement of positive cash flow and a planned share buyback is likely to boost investor confidence in LPE. The expectation of higher profitability in FY25 and the leadership of the new CEO, Scott Taylor, are positive indicators for the company's future. The rejection of the takeover offer at a price deemed too low by the Board also suggests confidence in LPE's long-term value.
Investor Reaction:
Investors and analysts have reacted positively to the news of LPE's strong financial performance and the planned share buyback. The new CEO's industry experience is seen as a valuable asset for the company's future growth.
Conclusion:
Investors should keep an eye on LPE's upcoming Annual Report for detailed insights into the company's revised strategy. The positive financial performance and share buyback plan indicate a strong outlook for LPE. Staying informed about LPE's developments will be crucial for making informed investment decisions.