Entu plc (LSE:ENTU) CEO Ian Blackhurst caught up with DirectorsTalk for an exclusive interview to discuss their share price, Flowgroup and their expectations for 2015
Q1: You’re a company who are fairly new to the market, could you just explain, to those that are not aware of what you do, exactly what you’re involved with?
A1: We specialise in the distribution and installation of products for the residential home in the UK. We improve the thermal efficiency, thermal characteristics of people’s homes, give them long term sustainable energy options and basically reduce their energy bills.
Q2: Is there any government subsidies for this?
A2: There were but we’re not a business that’s been built upon government subsidies, our customers choose to pay for the products. I think you’d be foolish to build a business based purely around government subsidies.
Q3: Do your customers get benefits, or are there benefits in that way from having insulated lofts etc.?
A3: Not in our case. There are options out there primarily for social housing but we specialise all our customers own their own homes.
Q4: We’re in the wake of the full year results at the moment, the share price has been rising since you came to market a few months ago and has risen quite well, could you explain whether the market has got it right or wrong at the moment?
A4: I think yesterday we were the top performing share on the stock market and ours shares were up at £1.32 which I think is a fair price for the business. We perform well, our results are strong and we got off to a good start this financial year, quarter one has been in line with expectations so I think the market is right to see an increase in share price. There’s a huge marketplace, I think people are starting to see the opportunity that are out there in terms of improving thermal efficiency not only in residential homes but commercial opportunities so I think the price is right, and some way to go on it still.
Q5: What I find interesting if that you’re partnered with a company called Flowgroup which a lot of private investors will be interested in. Could you explain how the deal works?
A5: Yes, we’re in discussions. It’s only an MOU we’ve signed, we’re in discussions about distribution, sale of the product and the installation of their products. Those that know the Flow boiler, it’s a fantastic product and those that don’t I would suggest they probably go on the website, it’s a conventional boiler that generates power whilst the boiler’s working, it’s not unique but it’s definitely unique in the price point it’s at.
Q6: So this would be just one of the deals you’re involved with? If you’re an investor in your company, does that mean that the risk in terms of downside is reduced and also you have multiple profit or revenue stream?
A6: Yes, we like to spread our revenues and our earnings, I think it gives you safety in case there’s a downturn in one area. The addition of the Flow boiler to our portfolio of multi products clearly puts us in a stronger position with a much stronger offering.
Q7: Do you regard that as one of the best offerings that you have or are there other one that you point investors to?
A7: I think all our offerings are powerful, ultimately brings savings to the customer, some are larger than others. The Flow boiler’s new, it’s a very interesting technology and we hope it goes well for us.
Q8: Obviously 2014 was a pivotal year for you, what are you looking to do for the rest of the year, apart from this partnership? What do you think is on offer for shareholders?
A8: More of the same, organic growth. We’re projecting growth this year which is what the shareholders are aware of. We are an acquisitive business, our history shows that, so yes there’s lots of potential acquisitions on the table, we just have to make sure we pick the right one. One that prerequisites in energy efficiency and clearly it’s EPS enhancing which we’re working hard to deliver the first acquisition hopefully sooner rather than later.
Q9: Just a side issue, the oil price obviously fell by 50% over the course of the autumn, how is this a factor in your business? Is it a positive or negative, how should people view it?
A9: In the business, it’s positive for us as it affects the fuel prices. The fuel prices will come down, we have a lot of vans on the road with our trade’s people. Does it affect energy prices, well there’s been a small nudge down but it’s pretty commonly accepted that over the climate of energy prices, they’re only going in one direction and today is a fantastic day for people to future-proof their house. There’s one thing our consumers can’t do it dictate what they pay for energy but they can dictate how much of it they use and we’re here to help them with that, to reduce their energy bills and reduce their usage.
Q10: So the problem is, even if the raw material goes down or the energy costs go down in the ground or on the ground, they’re not often passed down in a generous fashion to various households? Is that correct?
A10: Yes, I think so. I think we’ve just experienced that over the last couple of months with energy prices coming down. You look at all the analytical reports, it’s a diminishing mineral oil and gas, that we’re not making any more of it but the demand for it is increasing so you don’t need to be an analyst to work out that when demand outstrips supply, prices are going to go up and continue to go up so you need to do something about it. You need to be quick out of the blocks, future-proof the fabric of your house and be in control of your own power of generation with products like the Flow boiler, like the solar TV and other products that are coming to the market. It’s a smart move for householders to take.
