EuroSite Power On The Road to Becoming Cash Flow Positive
EuroSite Power (EUSP – $0.70), which owns and operates clean, On-Site Utility™ systems that produce electricity, hot water, heat and cooling at customers’ facilities, reached revenues of $542,973 in the second quarter, ended June 30, 2015, up more than 30% versus sales of $416,559 in the comparable period of 2014.
Although the Company reported a small net loss in the second quarter of 2015, it was cash flow positive for the first time in its history thanks to a UK tax incentive of $625,000 that it received in May. EuroSite Power will continue to receive such incentives annually, at least until 2018.
With a growing number of CHP systems in operation, EuroSite Power gets closer to becoming cash flow positive on a consistent basis. According to the management team, it needs 45 operating units to achieve that feat, while it has 36 contracts signed today. In addition, management expects to sign up several new contracts in the current quarter.
EuroSite Power truly has a compelling offer for potential clients, as it takes full responsibility for all expenses, from the cost to install a unit, gas to run it, through to maintenance. There is no impact on a customer’s overhead and no additional staff required.
The customer simply has to pay for the generated energy, which is guaranteed to be cheaper than the displaced energy from the grid. In addition, while saving money, EuroSite Power’s systems help to conserve energy, reduce emissions and improve the environment.
Based on the intrinsic value of EuroSite Power’s shares derived from our model, we issue a buy recommendation for the Company with a price target of US$2.09, which is 198% above today’s stock price.
|Download the second quarter 2015 EuroSite Power Company Report.|
|Smallcaps.us Advice: Buy||Price Target: $2.75||Latest Company Report (pdf)|
|For important disclosures, please read our disclaimer.|