This is part of a broader analysis of Vivopower's subsidiaries. For more, click here.
Kenshaw Electrical PTY ltd
Founded in 1981, Kenshaw has a differentiated mix of critical electrical power, critical mechanical power and non-destructive testing capabilities for customers across a broad range of industries, operating from its facilities in Newcastle, New South Wales, and Canberra, Australian Capital Territory.
Kenshaw Electrical's company structure can be declined in three main segments; Generators, Electric Motors and NDT (non-destructive test systems).
Kenshaw’s core competencies include: generator design, turn-key sales and installation; generator servicing and emergency breakdown services; customized motor modifications; non-destructive testing services including asset management of critical plant and equipment using diagnostic testing such as motor testing, oil analysis, thermal imaging and vibration analysis; and industrial electrical services.
Source: Year-end 2020 Financials
As we can see in last financials, this is how revenues are split between the three main segments.
Kenshaw saw a nice revenue growth from 2019 to 2020, led by the Generator vertical, while the two others segments saw a slight contraction.
Generators
Data centers
By far the most successful part of Kenshaw's offer. The generators sales have seen significant growth in the last two years, especially in the data center sector, in fact:
For the year ended 30 June 2020, 69% of Kenshaw’s revenue was earned from one customer and this customer is expected to continue to provide significant revenue in future years.
So who is that important costumer accounting for such a huge part of income?
We might be able to correlate this statement with this one from 2018.
"Kenshaw’s strong track record with CDC for the supply and installation of power generators has resulted in a record volume of new contracts worth US$24 million."
But, who is Canberra Data Center (CDC)?
We currently operates nine secure data centres, powered by 140 megawatts, that are interconnected by hi-speed communications across four campuses in Sydney (Eastern Creek) and Canberra (Fyshwick and Hume). This will grow to in excess of 250 megawatts across 7 campuses and 13 data centres by 2023.
We can notice here the expansion that CDC will have in the next year, especially in Sydney and Canberra.
The construction of two new data centres will commence at both Eastern Creek and Hume campuses in the 1st quarter of 2021. CDC has commenced construction of its first two campuses in Auckland, New Zealand, that will be available to support customers in late 2021.
Coincidentally, we can notice this on Kenshaw's website in news from May 2021.
Some signs let us believe that the collaboration between the two entities should last over the new installations being built until 2023. Per example, there is a pattern that can be made again from this news, announcing that:
Kenshaw’s strong track record with CDC for the supply and installation of power generators has resulted in a record volume of new contracts worth US$24 million. As a result of this increased business, Kenshaw has also announced the opening of a new office in Canberra to support CDC, as well other customers and emerging business opportunities in the region.
Because of this, we can hardly speculate that the current Sydney expansion might be, in part, to deserve:
"The construction of two new data centres that will commence at both Eastern Creek and Hume campuses in the 1st quarter of 2021."
Here we can see some case studies of the past projects.
Healthcare
I don't want to expand too much on this significant vertical, but I'll do a small overview of their recent projects.
John Hunter Hospital in 2018
Belmont Hospital in 2019
Westmead Children’s Hospital in 2019.
Goodford Hospital in 2020
They had a recent contract with a vaccination site in Australia.
NDT services
The NDT Services Group is a wholly owned subsidiary of Kenshaw, that provides independent, non-destructive testing and condition monitoring services. We pride ourselves on customer service for reliable plant and equipment which maximises profits and minimises downtime for clients.
Motor Testing
Oil Analysis
Vibration Analysis
Thermal Imaging
Laser Alignment
Dynamic Balancing
Ultrasonic Testing
Crack testing
Electric Motors
Kenshaw sources all brands of electric motors and is a proud agent of WEG and an authorized distributor of TECO and FASCO electric motors and Bonfiglioli gear boxes.
They stock a wide range of electric motors starting from 0.18kw up to and including 150kW. In addition to electric motor stocks, they carry contactors and overloads, DOL starters, variable-frequency drives (VFDs), and Vibrators.
Kenshaw is a supplier for them:
This is what they offer.
Case studies
Newcastle Coal
Arrium Mining & Materials
Rio Tinto
In conclusion
From the $48 m generated on June 2020 year-end financials, $29 m were generated solely by Kenshaw. Pointing on how important this subsidiary is to Vivopower. With impressive growth in the last years in part due to their partnership with Camberra Data Center, Kenshaw should be able to capture some interesting tailwinds if they manage to execute their transition to batteries systems. With their talent and expertise, we can wishfully hope from them to keep growing their bottom-line, just as they did year-over-year from 2019 to 2020 with a $5.7 million growth in Critical Power Services revenues.
Disclaimer: We are long $VVPR, not investment advice, not a registered professional. You could lose everything, buy at your own risks.
2021-07-22 Burlap's Gambles
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