Investment summary

While delays in negotiating terms with contractors affected the first half of the current financial year, delaying the company's sales push and depressing revenue, Fulcrum’s interim figures nevertheless demonstrated an improvement in the gross margin and a reduction in the loss at the underlying EBITDA level. New contractor relationships concluded since the half year should provide a robust platform for growth and margin expansion and we expect a break-even performance in H2. We believe Fulcrum’s current market rating stands at a discount to other utility infrastructure providers and utility companies and fails to take account of the recovery potential.

Last updated on 23/04/2012

Industry outlook

We expect the market for gas connection services will remain flat. However, connections provided by distribution network operators and suppliers could be outsourced to a credible independent operator such as Fulcrum.

Last updated on 23/04/2012