Intelligent Energy Holdings: Strategic Transformation Being Delivered
Edison | Apr 24, 2017 07:15AM ET
During H117, Intelligent Energy Holdings (LON:IEH) was reshaped to focus on driving sales of commercially ready B2B products. The group has won contracts in two of its three target segments: stationary power and drones, withdrawn from its Indian energy management business and realised substantial cost savings. However, product roll-out has been slower than originally anticipated, with management in financing discussions with key convertible loan note holders and we have reduced our estimates.
Cost reduction programme on track but insufficient
The cost reduction programme implemented during H216 has enabled management to maintain underlying cash burn at £1.6m/month including finance charges and capex. Our model shows that if costs are maintained at these levels, the group has sufficient cash to support the expected growth in commercial products through to calendar 2018, but not afterwards. Management is in discussions with key convertible loan note holders, who are also substantial shareholders, regarding potential financing. It is also considering reducing costs associated with being a listed company, estimated at £1.2m pa.
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