Inspired Energy reveals potential

Inspired Energy made more money than expected last year and the firm which helped clients save on energy costs says that momentum has carried over into the current financial year. Earnings upgrades are possible when full-year numbers are made public in March, and the shares were chased as much as 15% higher in early trade.

Set up almost 15 years ago and listed on AIM in 2011 at 3p, Inspired's raison d'être is to buy companies in the UK energy services sector capable of rapid growth. It's completed a number of them already and now manages and negotiates gas and electricity supply agreements on behalf of about 6,500 customers.

"The board is pleased to announce that adjusted profit before tax will be slightly ahead of market expectations and that group revenues will be above market expectations, over 35% ahead of the previous year," the company said on Wednesday. "Trading throughout the group was strong throughout the year and the board is pleased to see that this trend has continued into the start of the new financial year."

Order book sales at the corporate division jumped by 14% to £10 million, driving the division's contracted order book up by 27% to £14 million. And despite heavy investment during the first half, the SME unit was cash positive in the second half of 2014 and profits are tipped to keep improving through 2015. Order book sales more than doubled to £3.3 million, pushing the group total up by 30% to £13.3 million. Net debt will edge up to £3 million.

"We believe that the energy market remains very active, stimulated by price falls led by global oil; clients are seeking to take advantage of this situation, fixing supply and price as required against potential contract flexibility," says Robin Speakman, an analyst at house broker Shore Capital.

"We retain our current forecasts for FY2014F and the current year for the present; we will assess potential upgrades in detail with the information on the expanded order books with the full year results in a few weeks' time."

Shore Capital is looking for adjusted pre-tax profit of £4.06 million for 2014, giving adjusted earnings per share (EPS) of 0.71. It currently estimates 2015 profit of £4.98 million and EPS of 0.87p. There's a small dividend, too. At 10.62p, up 6%, but off its intraday high of 11.5p, Inspired shares trade on a modest 12.2 times forward earnings.

Results for the year ended 31 December 2014 on 24 March 2015.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.