VivoPower International — COVID-19 financial impact vs operational progress

VivoPower International (NASDAQ: VVPR)

Last close As at 01/03/2024

1.84

−0.03 (−1.60%)

Market capitalisation

6m

More on this equity

Research: Industrials

VivoPower International — COVID-19 financial impact vs operational progress

COVID-19 shutdowns and associated additional costs affected VivoPower’s Australian critical power business and hence group profitability, especially given the remaining divisions are primarily in investment mode. These nascent activities are critical to value creation, primarily the Tembo EV business and the potential from the recently announced crypto mining business.

David Larkam

Written by

David Larkam

Analyst, Industrials

Industrials

VivoPower International

COVID-19 financial impact vs operational progress

Interim results update

General industrials

28 February 2022

Price

$1.86

Market cap

$38.3m

Net debt (US$m) at 31 December 2021

21.9

Shares in issue

20.6m

Free float

42.2%

Code

VVPR

Primary exchange

Nasdaq

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(22.2)

(61.0)

(80.5)

Rel (local)

(22.7)

(58.2)

(83.0)

52-week high/low

$10.59

$1.86

Business description

VivoPower International’s strategy is to provide sustainable energy solutions on an international scale. Key activities at present are electric vehicles, critical power, sustainable energy solutions and solar development. Its primary operations are in Australia, Europe and North America.

Next events

Full year results

TBC

Analyst

David Larkam

+44 (0)20 3077 5700

VivoPower International is a research client of Edison Investment Research Limited

COVID-19 shutdowns and associated additional costs affected VivoPower’s Australian critical power business and hence group profitability, especially given the remaining divisions are primarily in investment mode. These nascent activities are critical to value creation, primarily the Tembo EV business and the potential from the recently announced crypto mining business.

Year end

Revenue ($m)

PBT*
($m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

06/20

48.7

(1.0)

(12.0)

0.0

N/A

N/A

06/21

40.4

(5.2)

(31.0)

0.0

N/A

N/A

06/22e

42.3

(15.2)

(69.8)

0.0

N/A

N/A

06/23e

60.1

(13.5)

(62.2)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

H122 interim results in brief

Sales declined 11% to $18.9m in H122. Operating losses widened to $7.3m (H121: $0.4m) due to COVID-19-related delays and costs including a $1.1m loss on a solar installation contract with operational investment in the Tembo EV business (loss $2.5m vs $0.2m). The loss before tax was $10.3m before exceptional items. Net debt increased to $21.9m (cash $3.3m) from $14.5m at the year end.

Operational progress

A new company called Caret has been established to develop the group’s solar assets including a cryptocurrency mining operation. In electric vehicles, Tembo is moving to a new facility in Eindhoven, doubling the current footprint, and Vivo has announced the planned acquisition of GB Auto in Australia (subject to due diligence and customary conditions being fulfilled, the timing has been affected by COVID-19). Current global auto supply chain issues are delaying the ramp-up timetable.

Forecast changes

The consequences of prolonged and strict COVID-19 lockdowns in key markets, especially Australia, led to softer than expected H1 results. These issues and costs are expected to continue for much of Q3, limiting the H2 recovery. The nascent businesses are expected to remain loss making, while the global automotive supply chain shortages suggest c 12-month delays in volume ramp-up at Tembo. In addition to the above operational effects, the interest charge is expected to be higher due to the opening net debt position. We have increased our FY22 loss before tax forecast from $0.9m to $15.2m and FY23e from $1.4m to $13.5m.

Valuation: Tembo EV division remains key

The key to our discounted cash flow valuation remains the success of Tembo. Assuming a cost of capital (WACC) of 14% and 2,500 units delivered in 2025 (previous expectation 5,000) suggests a valuation of $10.4 per share (from $19/share previously). Note that we have not ascribed any value to the new crypto mining business given the limited details available or taken into account any potential impact from additional funding that may be required.

Interim results

Overview

Continued COVID-19 restrictions in key markets, particularly Australia, continued to affect the ability to deliver contracts and led to additional costs. Sales declined 11% and losses widened to $7.3m due to costs and a $1.1m loss on a contract in Critical Power Services. Strategic progress has been positive, particularly for the Tembo business and development of the solar strategy, after taking full control of its US assets with a realisation of $20m within a new digital currency mining venture (these are reviewed later in more detail). Vivo also successfully passed its B Corp reassessment.

Exhibit 1: Profit and loss summary

$000s

2020

H121

H221

2021

H122

Group turnover

48,710

22,656

17,755

40,411

18,945

Operating profit

Critical Power

3,351

2,562

119

2,681

(690)

Electric Vehicles

 

(184)

(1,983)

(2,167)

(2,535)

SES

 

 

 

 

(445)

Solar

1,083

(893)

498

(395)

(22)

Central costs

(-2265)

(1,860)

(3,041)

(4,901)

(3,620)

Underlying operating profit

2,169

(375)

(4,407)

(4,782)

(7,311)

Exceptionals

 

 

 

 

 

Reorganisation costs

(3,410)

(364)

(1,856)

(2,220)

(514)

Other

 

(1,536)

876

(660)

 

EBIT (reported)

(1,241)

(2,275)

(5,387)

(7,662)

(7,825)

 

 

 

 

 

Financing charges

(3,149)

2,259

(2,670)

(411)

(3,021)

PBT reported

(4,390)

(16)

(8,057)

(8,073)

(10,846)

PBT before exceptionals

(980)

1,884

(7,077)

(5,193)

(10,332)

Source: Edison Investment Research, VivoPower International

Critical Power

Critical Power’s H122 results were significantly weaker than the corresponding period in 2021 due to the COVID-19 restrictions and associated additional costs. A comparison with H221 when similar restrictions were in place suggests improvements in the top line but there was a decline from a $119k profit to a $688k loss. This was due entirely to the one-off $1.1m COVID-19 related loss on the BlueGrass solar project, suggesting underlying improving performance. Note that Australian peer Mayfield has reported similar trading difficulties, and released a profit warning. Critical Power’s strong order position, heads of terms up 72% year-on-year and expectation for pent-up demand should see the performance improve in H2, although with COVID-19 restrictions in place for the third quarter (Australia’s international borders only opened in February although Western Australia delayed opening until March) full recovery is not expected until FY23.

Exhibit 2: Critical Power divisional results

$000s

2020

H121

H221

2021

H122

Sales

48,638

22,196

16,636

38,832

18,007

COGS

(40,865)

(17,581)

(15,211)

(32,792)

(17,222)

Gross Profit

7,773

4,615

1,425

6,040

785

G&A costs/other income

(2,745)

(1,208)

(249)

(1,457)

(569)

EBITDA

5,028

3,407

1,176

4,583

216

D&A

(1,718)

(845)

(1,057)

(1,902)

(904)

Underlying EBIT

3,310

2,562

119

2,681

(688)

Gross margin

16.0%

20.8%

8.6%

15.6%

4.4%

EBITDA margin

10.3%

15.3%

7.1%

11.8%

1.2%

EBIT margin

6.8%

11.5%

0.7%

6.9%

-3.8%

Source: Edison Investment Research, VivoPower International

Electric vehicles

Electric vehicles’ turnover increased to $0.9m from $0.4m, although activity was curtailed by COVID-19 restrictions. Losses widened from $0.2m to $2.5m due primarily to increased opex, including investment to increase battery unit power from 28kWh to 72kWh. Expansion of the distribution network continues in line with plans (double over 12 months) and Vivo has announced a move to new premises in Eindhoven, which will permit capacity of up to 5,000 kits a year. Although the effects of COVID-19 should start to recede, supply chain issues in the automotive sector look set to be more protracted.

Exhibit 3: Tembo key agreements

Date

Partner

Region

Contract

Technology

Minimum volume

Timescale

Value

Jan-21

GB Auto

Australia

Definitive agreement

Conversion kits

2,000

4 years

$250m

May-21

Acces Industriel Mining

Canada

Heads of terms

Conversion kits

1,675

5.5 years

$120m

Jun-21

Arctic Trucks

Nordic

Heads of terms

Conversion kits

800

5.5 years

$58m

Jun-21

Toyota

Global

Letter of intent

Technology partnership

-

5 years

Jul-21

Bodiz

Mongolia

Heads of terms

Conversion kits

350

5 years

$29m

Sep-21

GHH

Global

Definitive agreement

Conversion kits

3,000

5 years

Source: VivoPower International

SES, solar and central costs

Sustainable Energy Solution (SES) is a nascent business and hence marginally loss making as it looks to develop its products and end-markets. Solar business reflects the lack of disposals as Vivo took control of the US assets and looks to develop the portfolio. Central costs increased to reflect the increased development of the group.

Cash flow and financing

The operating loss and finance charges led to a cash outflow in the period of $7.4m, with net debt increasing to $21.9m. Management reports that cash of $3.3m has increased since the period end as COVID-19 restrictions have eased. Key to the funding of the group remains the $21.1m loan from AWN Holdings, the group’s largest shareholder, with bank debt of only $0.3m. Management expects working capital to unwind and increased activity in Critical Power to assist cash generation in H2. Additional financing is expected from UK R&D tax credits and European Investment Council grants and equity investments.

Exhibit 4: Cash flow

$000s

2020

H121

H221

2021

H122

Operating profit (pre exc & g/w)

2,169

(375)

(4,407)

(4,782)

(7,311)

Depreciation & amortisation

1766

889

1367

2256

1173

EBITDA

3,935

514

(3,040)

(2,526)

(6,138)

Net change in WC

(3,145)

(5,686)

(4,675)

(10,361)

2,099

(Profit)/loss on sale of fixed assets

(1,589)

324

71

395

 

Charge for share schemes

 

704

374

1,078

 

Restructuring

(3,410)

(2,259)

2,259

 

 

Other adjusting items

 

(343)

(3,306)

(3,649)

(755)

Operating cash flow

(4,209)

(6,746)

(8,317)

(15,063)

(4,794)

Returns & servicing of finance

(515)

(3,135)

(2,161)

(5,296)

(84)

Total tax paid

(477)

(366)

(354)

(720)

 

Net capex

(452)

(313)

(588)

(901)

(2,888)

Free cash flow

(5,653)

(10,560)

(11,420)

(21,980)

(7,766))

Acquisitions & disposals

746

(1,053)

(728)

(1,781)

 

Shares issued / (repurchased)

 

26,358

5,689

32,047

135

Net cash flow

(4,907)

14,745

(6,459)

8,286

(7,631)

Exchange rate differences

(3,100)

100

 

 

(81)

Other non-cash

(381)

 

150

150

300

Net cash/(debt) b/fwd

(14,557)

(22,945)

 

(22,945)

(14,509)

Movement in net debt

(8,388)

14,845

(6,309)

8,436

(7,412)

Net cash / (debt)

(22,945)

(8,100)

 

(14,509)

(21,921)

Source: Edison Investment Research, VivoPower International

Recent strategic developments

Formation of digital asset mining business

Vivo took full control of its US solar development activities in 2021 and formed a new business unit called Caret to provide focus and future commercialisation of these assets. The first development is a letter of intent to create Caret Decimal Inc (CDI), a renewable-powered digital asset mining business. Initial expectations are for mining bitcoin, Ethereum and Litecoin, but CDI will be able to develop other blockchain opportunities.

CDI was created in partnership with an experienced New York-based crypto mining team. Caret will inject 206MW DC of fully permissioned solar assets in Texas in exchange for US$20m in equity. Further financing will be raised at the CDI level, including the potential for an IPO. Commissioning is expected to take 24 months and for the three sites to have 4,398 petahash capacity from a fleet of 33,000 mining rigs. The company expects this to provide revenue potential of c US$270m pa with an EBITDA margin of c 87% based on forecast bitcoin prices.

The following brief analysis looks to verify the revenue potential of the project.

Exhibit 5: Bitcoin mining revenue calculation

Source: VivoPower

Assuming that the block reward rate remains stable, Exhibit 6 provides analysis relative to the two key swing factors outside CDI’s control: the bitcoin price and annual growth in the network hashrate.

Exhibit 6: CDI revenue potential (US$m)

Bitcoin price (US$000)

30

40

50

60

70

80

Annual growth in network hashrate

25%

182

243

303

364

425

485

50%

126

169

211

253

295

337

75%

93

124

155

186

217

248

100%

71

95

119

142

166

190

Source: Edison Investment Research

We await further details on the exact timing, financial investment and funding, which is expected to take place at the CDI level. Note that Caret has a further 1.6GW of solar assets in varying stages of development.

Acquisition of GB Auto

Vivo has signed a letter of intent to acquire GB Auto, a supplier of a services, products and technology to fleet, heavy vehicle and mobile equipment operators in the mining, construction, transport and agriculture industries. GB has five centres in New South Wales. It is also Tembo’s Australian distributor, hence full ownership is expected to provide closer alignment with end-customers, especially in mining, and accelerate adoption. In the year to June 2021, GB Auto generated sales of $22.3m and adjusted EBITDA of US$2.1m (unaudited). The cash/debt-free price of US$7.6m translates into an EV/EBITDA multiple of 3.6x and will be funded 75% in cash and 25% in VivoPower shares. COVID-19 restrictions have delayed due diligence and the deal is now expected to be completed in mid-CY22.

Forecast changes

The financial effect of COVID-19 led to softer than expected H1 results with these COVID-19 restrictions and costs expected to continue for much of Q3 limiting the H2 recovery that had been expected. The nascent businesses are expected to remain loss making, as per previous expectations, but the effect of the global automotive supply chain shortages suggests a greater impact and delays in deliveries by c 12 months would be a prudent assumption. Central costs are expected to moderate now that the required infrastructure has been put in place. In addition to the above operational impacts, the interest charge is expected to be higher due to the opening net debt position.

Exhibit 7 provides a summary of our forecast changes and initial FY24 expectations.

Exhibit 7: Forecast changes

$m

2022e

2023e

2024e

Old

New

Change

Old

New

Change

New

Revenues

52.3

42.3

(19%)

133.2

60.1

(55%)

135.5

Gross profit

5.0

2.0

(60%)

20.7

6.2

(70%)

17.2

Gross margin

9.6%

4.8%

(5%)

15.5%

10.4%

(5%)

12.7%

EBITDA

5.3

(8.2)

(255%)

11.6

(4.7)

(141%)

4.3

EBITDA margin

10.1%

(19.4%)

(292%)

8.7%

(7.8%)

(190%)

3.2%

Normalised operating profit

0.2

(10.8)

N/A

2.1

(9.7)

N/A

(2.5)

Normalised operating profit margin

0.4%

(25.5%)

(26%)

1.6%

(16.1%)

(18%)

(1.9%)

Normalised PBT

(0.9)

(15.2)

N/A

(1.4)

(13.5)

866%

(8.3)

Normalised basic EPS (c)

(4.1)

(69.8)

1603%

(6.2)

(62.3)

904%

(38.3)

Source: Edison Investment Research

Valuation

We continue to believe that a discounted cash flow (DCF) is the most appropriate valuation given that the key value creation will come through the ramp-up of Tembo. The group has commitments for 7,825 units over the next five years, which underpins expansion plans, although given the global automotive supply-chain issues, we have delayed our volume ramp-up expectations by around 12 months. Exhibit 8 provides a per-share valuation based on the number of vehicle deliveries in 2025 and the WACC. Our assumption is for 2,500 deliveries in 2025 (previously 5,000), which, using a WACC of 14.0%, suggests a valuation of $10.4 per share. Note that we have not taken into account the new crypto mining venture at this point given the limited information on structure and timing. Also, we have not taken into account the impact of any additional funding that may be required although management expects much of Tembo’s funding to come from European green grants and working capital facilities, while management has already stated that CDI will be funded separately, outside of Vivo.

Exhibit 8: DCF valuation per share ($)

2025 Tembo deliveries

1,500

2,000

2,500

3,000

3,500


WACC

18.0%

2.3

3.9

5.4

6.9

8.4

17.0%

2.8

4.7

6.3

8.0

9.7

16.0%

3.5

5.6

7.4

9.3

11.2

15.0%

4.4

6.7

8.8

10.9

13.0

14.0%

5.4

8.0

10.4

12.8

15.2

13.0%

6.7

9.6

12.4

15.1

17.8

12.0%

8.3

11.7

14.9

18.0

21.2

11.0%

10.4

14.3

18.1

21.8

25.5

Source: Edison Investment Research

Exhibit 9: Financial summary

$000s

2020

2021

2022e

2023e

2024e

Year end 30 June

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

48,710

40,411

42,280

60,144

135,547

Cost of Sales

(40,885)

(34,084)

(40,258)

(53,910)

(118,315)

Gross Profit

7,825

6,327

2,021

6,234

17,233

EBITDA

3,935

(2,526)

(8,210)

(4,698)

4,298

Normalised operating profit

2,169

(4,782)

(10,801)

(9,656)

(2,508)

Amortisation of acquired intangibles

0

0

0

0

0

Exceptionals

(3,410)

(2,880)

(1,000)

0

0

Share-based payments

0

0

0

0

0

Reported operating profit

(1,241)

(7,662)

(11,801)

(9,656)

(2,508)

Net Interest

(3,149)

(411)

(4,374)

(3,870)

(5,805)

Joint ventures & associates (post tax)

0

0

Exceptionals

3,410

2,880

1,000

Profit Before Tax (norm)

(980)

(5,193)

(15,175)

(13,526)

(8,313)

Profit Before Tax (reported)

(4,390)

(8,073)

(16,175)

(13,526)

(8,313)

Reported tax

(713)

115

809

676

416

Profit After Tax (norm)

(980)

(5,193)

(14,416)

(12,850)

(7,897)

Profit After Tax (reported)

(5,103)

(7,958)

(15,366)

(12,850)

(7,897)

Basic average number of shares (m)

13,557

16,307

20,642

20,642

20,642

EPS - basic normalised ($)

(12.0)

(31.00)

(69.84)

(62.25)

(38.26)

EPS - diluted normalised ($)

(12.0)

(31.00)

(69.84)

(62.25)

(38.26)

EPS - basic reported ($)

(37.64)

(46.00)

(74.44)

(62.25)

(38.26)

Dividend ($)

0.00

0.00

0.00

0.00

0.00

BALANCE SHEET

Fixed Assets

41,907

52,519

54,424

60,607

73,377

Intangible Assets

29,849

47,449

48,818

52,362

56,544

Tangible Assets

2,486

2,575

3,111

5,750

14,338

Investments & other

9,572

2,495

2,495

2,495

2,495

Current Assets

20,473

23,993

19,154

23,605

43,057

Stocks

0

1,537

1,338

2,592

9,557

Debtors

12,556

12,712

11,817

15,013

27,501

Cash & cash equivalents

2,824

8,604

5,000

5,000

5,000

Other

5,093

1,140

1,000

1,000

1,000

Current Liabilities

(19,679)

(13,431)

(14,655)

(20,202)

(40,135)

Creditors

(15,395)

(8,917)

(10,221)

(14,187)

(30,836)

Tax and social security

(75)

(708)

101

777

1,193

Short term borrowings

(1,312)

(1,004)

(1,000)

(2,000)

(3,000)

Other

(2,897)

(2,802)

(3,535)

(4,792)

(7,492)

Long Term Liabilities

(24,811)

(22,663)

(31,462)

(46,654)

(66,510)

Long term borrowings

(24,642)

(22,087)

(31,254)

(46,372)

(66,068)

Other long term liabilities

(169)

(576)

(208)

(282)

(441)

Net Assets

17,890

40,418

27,461

17,356

9,789

Minority interests

184

0

0

0

0

Shareholders' equity

18,074

40,418

27,461

17,356

9,789

CASH FLOW

Op Cash Flow before WC and tax

3,935

(2,526)

(8,210)

(5,568)

4,574

Working capital

(3,145)

(10,361)

2,442

2,031

(614)

Exceptional & other

(4,999)

(2,176)

522

1,000

1,000

Tax

(477)

(720)

(50)

0

0

Net operating cash flow

(4,686)

(15,783)

(5,296)

(2,537)

4,961

Capex

(452)

(901)

(4,810)

(9,711)

(19,852)

Acquisitions/disposals

746

(1,781)

0

0

0

Net interest

(515)

(5,296)

(2,774)

(3,870)

(5,805)

Equity financing

0

32,047

135

0

0

Dividends

0

0

0

0

0

Other

Net Cash Flow

(4,907)

8,286

(12,745)

(16,118)

(20,696)

Opening net debt/(cash)

(14,557)

(22,945)

(14,509)

(27,254)

(43,372)

FX

(3,100)

0

0

0

0

Other non-cash movements

(381)

150

0

0

0

Closing net debt/(cash)

(22,945)

(14,509)

(27,254)

(43,372)

(64,068)

Source: Edison Investment Research, VivoPower International

General disclaimer and copyright

This report has been commissioned by VivoPowerVivoPower International International and prepared and issued by Edison, in consideration of a fee payable by VivoPower InternationalVivoPower International. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by VivoPowerVivoPower International International and prepared and issued by Edison, in consideration of a fee payable by VivoPower InternationalVivoPower International. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

More on VivoPower International

View All

Latest from the Industrials sector

View All Industrials content

Research: TMT

4imprint Group — Moving on up

4imprint’s year-end trading update points to FY21 revenues of $787m, ahead of our expectation of $775m, up 41% on the prior year, after a strong Q4. PBT is indicated at the high end of the (wide) consensus range and we increase our estimate from $22.6m to $30.4m. Supply chain and inflation issues look set to continue, so margins will take longer to recover to the levels pre-COVID-19 pandemic, but the group has a degree of flexibility around substitution and pricing, which should mitigate the heaviest potential trading impact. 4imprint’s long-term growth record, strong cash generation and robust balance sheet underpin the premium rating.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free