Worth a look, page-9

Greeting everyone,

I've been carefully considering LGI as an investment opportunity and thought I would add to the great discussion so far.

Management:
Founder led management team.
Large insider ownership, 62.99%.
Skilled and experienced management team.
Management team is passionate about the problem, the CEO has been working to reduce landfill's impact on the environment since they were 19 years old.
Senior management team have been at LGI for a minimum of 6 years

Finances:
Revenue projected to increase by ~14% in FY24 from pre-existing contracts (using FY23 projected revenue per unit prices), with potential for further upside from new projects and contracts.
Dynamic Asset Control System (DACS) has the potential to increase revenue further; it achieved a 5% increase in weighted average electricity prices during its trial, which would have added an additional $900k to the projected FY23 revenue for minimal ongoing cost. (potentially, see Unanswered questions below).
Long, 10+ year contracts in place.
Safe revenue source, >85% of customers are local governments

Risk Mitigation:
Mitigating electricity market fluctuation risks with their Dynamic Asset Control System (DACS).
Mitigating electricity market fluctuations with their behind-the-meter projects (potentially, see Unanswered questions below).
Mitigating breakdowns with Preventative Maintenance, 6 generation plant engineer overhauls in HY23.
Mitigated spare part supply chain issues and reduced down time with an increase in critical spares of $400k.

Operations:
High attention to employees' safety, with Zero Lost Time Injuries (LTIs) or reported incidents in the past 35,782 hours (as at HY23)
Attracting new staff in the tight labour market, with 7 new hires in HY2023.

Projects:
Projects delivered on time.
Pipeline of projects.
Completed Front End Engineering Design (FEED) for Bunya upgrade, reducing future engineering costs and project timelines.

Concerns:
Low liquidity (3-month average volume, $63.5k).
Dividend payment after IPO, essentially paid themselves.
ACCU price fluctuations.
Electricity pricing fluctuations.
Projects that touch the main grid require network approval.
Current valuation (not finished)
Single supplier of generators

Unknowns / Unanswered questions:
How long does it take for rubbish, once buried, to break down enough to produce methane at a level worth extracting?
How do they price the behind-the-meter contracts, and are they still subject to market risks?
DACS only tested for 2 weeks in May; potential could be over or understated.
How long does it take to upgrade a plant to DACS?
Are all sites going to be upgraded to DACS?What is the DACS rollout strategy and timeframe?
How much does it cost to install the DACS system at a site?
Does reducing the lead times of the batteries by 8-12 for the Mugga Lane upgrade move the completion date forward by those amounts?
How do they handle pricing in the multi-year contracts?
What are their current generation plant utilisation rates and what are they aiming to achieve?
What is stopping LGI from ramping up the roll out of flares to earn more ACCUs?
How much demand is there currently and into the future for ACCUs?
What does the ACCU market look like, how big is it, how many players, what level of risk is there for new entrants to reduce the ACCU price, what level of risk is there for current purchasers of ACCUs to stop or reduce?
Competitive landscape
What does LGI do better than its competitors?

How hard is the methane to burn in a generator, can any generator do it or does it require a special generator or an additional fuel source?
Have they looked at alternative generators in case their current supplier has supply issues?