$ EAAS eEnergy Group ......(which reversed into Alexander Mining plc) and today listed on AIM with an approx £10m market cap.
Energy as a service model……..financing the switch to LED.
Earlier today I met with Harvey Sinclair, the CEO of eEnergy Group. The PLC has just reversed into the shelled Alexander Mining quote and was listed on AIM this morning, opening the LSE. Shares worth £6.6m were issued to the owners of the assets ahead of the listing. eEnergy is an established "Energy Efficiency-as-a-Service" business currently focused on providing "Light-as-a-Service" to commercial customers through eLight in the UK and Ireland. eLight helps businesses and schools switch from traditional lighting stock to LED lighting resulting in reduced energy consumption and bills. A fixed monthly service fee is charged over the life of a 5-7 year LED installation contract and the customer avoiding any upfront capital payments. The energy savings are greater than the monthly service fee charged (guaranteed), allowing the user to unlock free cash-flow from day one as well as improve the quality of their lighting environment and importantly reduce carbon emissions and be regulatory compliant. 40% of a building’s carbon footprint comes from energy usage and around 80% of UK commercial buildings do not have LED lights. eLight procures (direct sourced, major players), funds (financial partnership), installs (7 regional contractors in the UK) and then maintains the LED lighting, meaning the customer has no risk. At the end of the contact an extended warranty will be offered.
Financial risks involved with the contract are minimal with funding for the fit out is available from 3-4 institutional sources, one being a dedicated sustainability fund. Installation costs pre-determined in a survey, helped by the use of technology and dedicated regulatory needs. The fit-out contracts are underwritten (blue chip insurer) and equipment failure almost zero. Margins are currently 35% but with an aim to increase to 45% the CEO stated as group LED product providers give better discounts for order size. An app is to be launched to help smaller businesses contact eLight and to be licensed to the contractors. Technology is used in the survey, design and invoicing with the need for only a small sales team,. The Board's strategy is to develop eEnergy as a broader energy services company and acquire other businesses in the energy management sector such as meter management and cross sell.…
