• New product line increases LPE’s addressable strata market by 180% to $2.7 billion per annum
• DMC offering is tailored to those communities where an LPE embedded network is not viable
• Easy switch over with no upfront capital costs or lock in contracts
• The new product is open to anyone living in Southeast Queensland, with expansion to all states in coming months)
• Margins to the Company are similar to an LPE embedded network
• LPE expect significant growth through its one-to-many sales model leveraging on its existing relationships
DMC is the normal mechanism for the supply of electricity to individual consumers in the market. They are standard retail offerings that are available to all consumers and do not require any infrastructure build-out or upfront costs. LPE’s DMC offering is unique in that it is a specialist strata community supplier with its agreements, terms and services tailored towards strata communities, but is not limited to them.
Gross retail margins to LPE under its DMC offering are similar to embedded networks. While other retailers opt for a high headline price and a discount when a customer pays their bill on time, LPE offer a flat low kWh price. As energy and network costs move, LPE will continue to adjust its DMC pricing to remain competitive.
Direct Market Customers have a faster and simpler sales cycle. Unlike other retailers who employ a one-to-one sales strategy in this segment, LPE will maintain its one-to-many sales cycle by targeting only (smaller) strata customers for its DMC business.
LPE projects ~4,000 service points (equivalent to approximately 27GWh) will be added by the end of 2018. This is estimated to grow to more than 27,000 service points by the end of 2020.
CEO Damien Glanville said, “This expansion into DMC marks an exciting milestone for the Company. Not only can we continue to provide a competitive product through our LPE embedded networks, we can now provide an alternative for smaller strata communities and individuals.