AIM:INSE

Stock Analysis Report

Executive Summary

Inspired Energy PLC, together with its subsidiaries, provides energy advisory, procurement, and management solutions to the industrial, public, and commercial sectors in the United Kingdom.

Rewards

Trading at 48% below its fair value

Earnings are forecast to grow 36.23% per year

Earnings grew by 124.6% over the past year

Risk Analysis

Has a high level of debt

Dividend of 3.26% is not well covered by earnings

Highly volatile share price over past 3 months

Large one-off items impacting financial results

+ 1 more risk


Snowflake Analysis

Proven track record with reasonable growth potential.

Share Price & News

How has Inspired Energy's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: INSE's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-0.3%

INSE

1.9%

GB Commercial Services

1.4%

GB Market


1 Year Return

20.0%

INSE

26.4%

GB Commercial Services

12.4%

GB Market

Return vs Industry: INSE underperformed the UK Commercial Services industry which returned 26.8% over the past year.

Return vs Market: INSE exceeded the UK Market which returned 12.7% over the past year.


Shareholder returns

INSEIndustryMarket
7 Day-0.3%1.9%1.4%
30 Day7.8%2.7%2.3%
90 Day30.8%9.2%8.8%
1 Year25.9%20.0%30.1%26.4%18.3%12.4%
3 Year72.3%55.0%30.3%19.2%23.8%8.0%
5 Year133.8%99.5%43.4%20.3%41.8%8.9%

Price Volatility Vs. Market

How volatile is Inspired Energy's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Inspired Energy undervalued compared to its fair value and its price relative to the market?

47.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: INSE (£0.2) is trading below our estimate of fair value (£0.38)

Significantly Below Fair Value: INSE is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: INSE is poor value based on its PE Ratio (31.5x) compared to the Commercial Services industry average (20.9x).

PE vs Market: INSE is poor value based on its PE Ratio (31.5x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: INSE is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: INSE is overvalued based on its PB Ratio (3x) compared to the GB Commercial Services industry average (2x).


Next Steps

Future Growth

How is Inspired Energy forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

36.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: INSE's forecast earnings growth (36.2% per year) is above the savings rate (0.5%).

Earnings vs Market: INSE's earnings (36.2% per year) are forecast to grow faster than the UK market (11.7% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: INSE's revenue (15.8% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: INSE's revenue (15.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if INSE's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Inspired Energy performed over the past 5 years?

5.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: INSE has a large one-off loss of £1.7M impacting its June 30 2019 financial results.

Growing Profit Margin: INSE's current net profit margins (11%) are higher than last year (6.1%).


Past Earnings Growth Analysis

Earnings Trend: INSE's earnings have grown by 5.3% per year over the past 5 years.

Accelerating Growth: INSE's earnings growth over the past year (124.6%) exceeds its 5-year average (5.3% per year).

Earnings vs Industry: INSE earnings growth over the past year (124.6%) exceeded the Commercial Services industry 16.1%.


Return on Equity

High ROE: INSE's Return on Equity (8.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Inspired Energy's financial position?


Financial Position Analysis

Short Term Liabilities: INSE's short term assets (£25.7M) exceed its short term liabilities (£12.8M).

Long Term Liabilities: INSE's short term assets (£25.7M) do not cover its long term liabilities (£29.2M).


Debt to Equity History and Analysis

Debt Level: INSE's debt to equity ratio (57.6%) is considered high.

Reducing Debt: INSE's debt to equity ratio has reduced from 165.2% to 57.6% over the past 5 years.

Debt Coverage: INSE's debt is well covered by operating cash flow (28.8%).

Interest Coverage: INSE's interest payments on its debt are well covered by EBIT (7.9x coverage).


Balance Sheet

Inventory Level: INSE has a low level of unsold assets or inventory.

Debt Coverage by Assets: INSE's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

What is Inspired Energy's current dividend yield, its reliability and sustainability?

3.26%

Current Dividend Yield


Dividend Yield vs Market

company3.3%marketbottom25%1.8%markettop25%5.0%industryaverage2.6%forecastin3Years4.1%

Current dividend yield vs market & industry

Notable Dividend: INSE's dividend (3.26%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: INSE's dividend (3.26%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

Stable Dividend: INSE has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: INSE's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (107.2%), INSE's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: INSE's dividends in 3 years are forecast to be well covered by earnings (41.2% payout ratio).


Next Steps

Management

What is the CEO of Inspired Energy's salary, the management and board of directors tenure and is there insider trading?

3.3yrs

Average board tenure


CEO

Mark Dickinson (46yo)

2.3yrs

Tenure

UK£408,000

Compensation

Mr. Mark Dickinson, MSc. Finance (LBS), has been the Chief Executive Officer of Inspired Energy plc since October 11, 2017. Mr. Dickinson served as the Chief Operating Officer of Inspired Energy plc since  ...


CEO Compensation Analysis

Compensation vs Market: Mark's total compensation ($USD530.52K) is about average for companies of similar size in the UK market ($USD596.47K).

Compensation vs Earnings: Mark's compensation has been consistent with company performance over the past year.


Board Age and Tenure

3.3yrs

Average Tenure

46yo

Average Age

Experienced Board: INSE's board of directors are considered experienced (3.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 14.5%.


Management Team

  • David J. Foreman (37yo)

    Corporate Development Director

    • Compensation: UK£59.90k
  • Mark Dickinson (46yo)

    CEO & Director

    • Tenure: 2.3yrs
    • Compensation: UK£408.00k
  • Paul Connor (35yo)

    Finance Director & Executive Director

    • Tenure: 5.1yrs
    • Compensation: UK£320.00k

Board Members

  • Gordon Oliver (60yo)

    Independent Non-Executive Director

    • Tenure: 2yrs
    • Compensation: UK£37.00k
  • Richard Logan (61yo)

    Independent Non-Executive Director

    • Tenure: 2.8yrs
    • Compensation: UK£40.00k
  • Mark Dickinson (46yo)

    CEO & Director

    • Tenure: 2.3yrs
    • Compensation: UK£408.00k
  • Mike Fletcher (44yo)

    Non-Executive Chairman

    • Tenure: 3.3yrs
    • Compensation: UK£48.00k
  • Paul Connor (35yo)

    Finance Director & Executive Director

    • Tenure: 5.1yrs
    • Compensation: UK£320.00k

Company Information

Inspired Energy PLC's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Inspired Energy PLC
  • Ticker: INSE
  • Exchange: AIM
  • Founded: 2000
  • Industry: Diversified Support Services
  • Sector: Commercial Services
  • Market Cap: UK£142.438m
  • Shares outstanding: 713.97m
  • Website: https://www.inspiredenergy.co.uk

Number of Employees


Location

  • Inspired Energy PLC
  • 29 Progress Business Park
  • Orders Lane
  • Preston
  • Lancashire
  • PR4 2TZ
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
INSEAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPNov 2011

Biography

Inspired Energy PLC, together with its subsidiaries, provides energy advisory, procurement, and management solutions to the industrial, public, and commercial sectors in the United Kingdom. It offers energy procurement, market analysis, bureau, historical audit, energy management, renewable energy project, public sector procurement, water deregulation, and site operation services, as well as ESOS, a technology-driven solution. The company was founded in 2000 and is based in Preston, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/18 21:30
End of Day Share Price2020/01/17 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.