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Utilitywise – a “Strategy Update” only David Brent & major shareholder Neil Woodford are clever enough to understand?

By Steve Moore | Thursday 5 July 2018

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

“Evolving the proposition channel strategy”, “differentiated segment and channel propositions”, “technology-led efficiency proposition, adopting a more consultative sales approach”, “invest in the development of a multi-channel ‘go to market’ strategy”. Welcome to a “Strategy Update” announcement from Utilitywise (UTW). Who’s swallowed the dictionary of management bullshit?

The “utility cost management consultancy” states its March-announced targets to FY2021 (“increase in share of SME market from 2% to 7%, increase in SME customer numbers from c. 30,000 to c. 130,000, 5% share of the UK & Ireland corporate controls market”) remain in place and require “strategic initiatives” including the above bullshit and “focusing on driving inbound sales channels and providing multiple utilities to its customers”. Also “the board recognises the need to focus on driving the operating cash flow of the business in order to drive returns for shareholders”. Er… yep, that is quite important!

“In addition to the reiteration of its strategic targets as noted above, the group is therefore also introducing two new financial targets, as follows: Underlying Free Cash Flow of the group of at least £10m in FY21; and a group net cash position by 31 July 2021, with the path to that position being non-linear to allow for, in particular, investments during the year ended 31 July 2019.”

With also emphasised “the challenges the company has had to overcome during the last 12 months”, I thus suggest short-term financials aren’t going to be good, though CEO Brendan Flattery attempts to reassure that “the strategy update outlined today will enable Utilitywise to meet its two new financial targets, as well as maximising the medium term potential from the business”.

Of course though, there is no guarantee that it will – and I’ll continue to avoid at least until there is some clear net cash generation demonstration. Meanwhile, was today’s announcement written by a Mr David Brent by any chance? -

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