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PowerHouse Energy (PHE) is an AIM listed company which is pioneering waste-to-hydrogen technology via its proprietary Distributed Modular Gasification (DMG®) process.
- Revolutionary waste-to-hydrogen technology
PowerHouse’s proprietary Distributed Modular Gasification (DMG®) process can convert high calorific value waste material such as tyres and plastic into a clean Ecosynthesis© gas. This “syngas” contains a high percentage of hydrogen that can be cleaned up to 99.999% purity using off-the-shelf technology to produce a road quality hydrogen fuel. DMG allows for distributed electrical generation, distributed waste elimination, and distributed hydrogen production allowing each to be used at the point of engagement.
- Significant technical and commercial progress made
PowerHouse has been operating a process demonstration unit at the Thornton Science Park, Chester, since May 2017. A string of positive announcements have been made since then, culminating last month in the successful independent assessment of the feasibility of its Commercial Design by industry-leading technology assurance group, DNV-GL. Powerhouse has also made significant commercial progress over the course of 2017 and 2018, including a Heads of Terms agreement with Peel Environmental to locate an initial commercial DMG® System.
- Market drivers put the company in a sweet spot
PowerHouse’s technology has the potential to solve increasing issues associated with global waste management, to take advantage of higher demand for clean “green” power generation and to supply a growing worldwide demand for road quality hydrogen fuel.
- DCF valuation suggests significant upside potential
Our DCF analysis suggests an NPV(20) of £47.4 million, or 2.45p per share, some 6 times the current share price. However, we use very conservative assumptions in our model and see significant further potential upside. We re-initiate coverage of PowerHouse Energy with a Conviction Buy stance.
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Table: Financial Overview
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Year to Dec
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2014A
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2015A
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2016A
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2017A
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Revenue (£m)
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-
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-
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-
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-
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Pre-tax (£m)
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(2.55)
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(0.78)
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(1.33)
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(1.87)
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EPS (p)
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(0.65)
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(0.2)
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(0.19)
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(0.24)
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Source: Company accounts
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