Just Energy -the best is yet to come
Just Energy reported it's third quarter results and it had a pretty good quarter.EBITDA was up 31%over the same quarter last year and funds were up 10%.Two weeks ago the price was about $7.50 per share and now it is almost $9.00 per share.It had a convertible debenture issue priced at $9.37 per share and it looked like there would be no conversions.Now Just Energy is on the way to $10.00 per share and most of the debentures will be converted.
Just gave guidance of EBITDA of $220 million for the full year.This translates into $1.53 per share and earnings per share will be $1.12 per share and produce a P/E ratio of about 8 times and well below the average for the T.S.X of 15.Sales were up 15% from the same quarter last year.
Not so good last year
Last year things were not as rosy; the price of natural gas was hovering around $3.20 per thousand cubic feet and Just had thin margins.Just had to cut it's dividend from $1.24 per share to $.84 and was in jeopardy of cutting it's dividend alltogether.It's payout ratio was at 272% and fell to 114% on an annual basis but now after the third quarter it is only 80%.The dividend looks safe now as natural gas has moved up again.
A new winner
Just has gotten some new subsidiaries in both the United States and United Kingdom.It is not clear that they contribute to the bottom line.But gradually Just has found a new winner called Home Services.They install water heaters,air conditioners,thermostats, and furnaces.This is a stable source of revenue once there is an installation.Now Home Services account for 45% of the gross margin and there was a 33% increase in installations in 2013.Just Energy added 300,000 new customers in the quarter and will bring more Home Services revenues.
In addition, Just has reduced it's debt; as it's debt to EBITDA has fallen from 5.4 to 5.1 and it's target is 3.5 to 4.0 for 2016.
The best is coming
The price of natural gas has acted to increase it's margins on all product sold.The price was about $3.00 to $3.25 per thousand cubic feet in the summer and moved up to an average price of about $3.50 for the fall and since September appears to be an average of about $4.50.The present price is above $6.00 per thousand cubic feet and even if it falls again will likely ensure that the best is yet to come for Just Energy.
Just gave guidance of EBITDA of $220 million for the full year.This translates into $1.53 per share and earnings per share will be $1.12 per share and produce a P/E ratio of about 8 times and well below the average for the T.S.X of 15.Sales were up 15% from the same quarter last year.
Not so good last year
Last year things were not as rosy; the price of natural gas was hovering around $3.20 per thousand cubic feet and Just had thin margins.Just had to cut it's dividend from $1.24 per share to $.84 and was in jeopardy of cutting it's dividend alltogether.It's payout ratio was at 272% and fell to 114% on an annual basis but now after the third quarter it is only 80%.The dividend looks safe now as natural gas has moved up again.
A new winner
Just has gotten some new subsidiaries in both the United States and United Kingdom.It is not clear that they contribute to the bottom line.But gradually Just has found a new winner called Home Services.They install water heaters,air conditioners,thermostats, and furnaces.This is a stable source of revenue once there is an installation.Now Home Services account for 45% of the gross margin and there was a 33% increase in installations in 2013.Just Energy added 300,000 new customers in the quarter and will bring more Home Services revenues.
In addition, Just has reduced it's debt; as it's debt to EBITDA has fallen from 5.4 to 5.1 and it's target is 3.5 to 4.0 for 2016.
The best is coming
The price of natural gas has acted to increase it's margins on all product sold.The price was about $3.00 to $3.25 per thousand cubic feet in the summer and moved up to an average price of about $3.50 for the fall and since September appears to be an average of about $4.50.The present price is above $6.00 per thousand cubic feet and even if it falls again will likely ensure that the best is yet to come for Just Energy.
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