Leclanché: Brakes Off
Edison | Oct 10, 2018 08:32AM ET
Now that it has solved its financing issues, Leclanche SA (SIX:LECN) has started delivering on its pipeline of projects to supply battery energy storage solutions for utility-scale, microgrid and e-transport applications. Revenues more than doubled during H118. However, some significant contracts that were pending at end June have been delayed while third parties await project funding, so we revise our FY18 estimates downwards and cut our indicative valuation from CHF2.51/share to CHF2.33/share.
Revenue growth driven by utility-scale generation
Group H118 revenues (including other income) more than doubled to CHF22.3m as access to finance enabled the company to start delivering against the pipeline of contracts already received for delivery during FY18. These total over 50MWh of capacity, primarily for utility-scale projects. Stripping out exceptional costs, normalised EBITDA losses widened by CHF7.5m to CHF17.1m. Management continued with its financing programme, which resulted in convertible loans (excluding CHF20.0m that has yet to be provided) reaching CHF46.6m, all of which are now owned by majority holder FEFAM. While this is potentially highly dilutive (see below), management notes that it now has sufficient funding to fully finance the company through to FY20, when it expects to be EBITDA positive.
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