PowerHouse Energy

 


Pioneering waste-to-hydrogen tech provider now on the cusp of commercialisation & creating significant shareholder value

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.

Table: Financial Overview

Year to Dec

2014A

2015A

2016A

2017A

Revenue (£m)

-

-

-

-

Pre-tax (£m)

(2.55)

(0.78)

(1.33)

(1.87)

EPS (p)

(0.65)

(0.2)

(0.19)

(0.24)

Source: Company accounts

 

CONVICTION BUY - Price target 2.45p

 

Key data

Share price

0.38p

52 week high/low

0.825p/0.285p

Exchange

AIM

EPIC

PHE

Shares in issue

1,716.43m

Market Cap

£6.5m

Sector

Energy

IMPORTANT: PowerHouse Energy is a research client of Align Research. Align Research owns shares in PowerHouse. For full disclaimer information please refer to the last page of the full document.