Powerhouse Energy (LON:PHE): Into The Bargain Basement Zone?

The latest news regarding Powerhouse Energy is both validation and the start of a new growth phase for the waste to hydrogen technology group, after an extended timeline on the stock market.

By Zak Mir 

Today we learn that the Managing Director of Peel Environmental – a division of Peel Holdings – the multi-billion pound industrial land and buildings empire of John Whittaker – has joined the board of Powerhouse Energy.

This is an enormous vote of confidence by Peel in Powerhouse Energy – currently, a relative minnow,  that Peel has invested substantial monies in the deployment and proving of the DMG technology.

This is now a binary program, the technology is not one of R&D but an engineering hurdle – requiring 3 or 4 known technologies to work together. There is very little question or doubt, if any, that the hurdles in this endeavour cannot be overcome – and then this technology is a world-beater – with applications anywhere that waste plastic doesn’t have an end of life home to go to. This should be something that the Greta Thunberg and David Attenborough’s of this world should be happy to embrace.

Just as importantly for shareholders,  with an annual recurring royalty of £500k per system just in the U.K. from Peel- after the 2nd system the company will be profitable. After 10 systems it will be a cash cow.

Peel have talked about more than 100 systems in the U.K. within 10 years – that’s an amazing £50 million a year of virtually net income in royalties and several
million in engineering services per annum. All of this illustrates how this company is unlike any other company in the Hydrogen sector, in that is it has a robust and easily obtainable positive revenue generating model in the near term horizon. In other words it has the close hydrogen technology to a commercial model with limited R&D costs compared to all the other players.

Shares in Powerhouse Energy are currently at 0.75p, well above the 2020 support zone near 0.6p. But they were much higher earlier this year towards 1.80p when news of a supplemental agreement with Peel was revealed in February.  The latest onboarding of Myles Kitcher, the Managing Director of Peel Environmental could mark the start of a fresh run of speculative interest in the stock.

Disclaimer
Zakmir.com is a purely journalistic website – Zak Mir is a member of the National Union of Journalists. There is no intention here of providing financial advice. It is recommended you seek an independent professional opinion before deciding whether or not to take any action with regard to anything written here.


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