HVAC (heating, ventilation and air condition) systems use a lot of energy, particularly in the hot summer months when people crank up the A/C. There are many ways to help with the monthly bill, whether it is a business or residence, including proper maintenance of filters, parts and leaky ducts.
Technology can also play a big role in trimming expenses., such as that of Smartcool Systems (TSX-Venture:SSC) (OTCPK:SSCFF), a Vancouver-based provider of cutting edge energy efficient and energy cost reduction solutions.
The company utilizes retrofit technologies for its ECO3, ESM and ECOHome products that accommodate virtually every type of system.
The system works by simply wiring the unit between the compressor and thermostat and algorithms take it from there, starting and stopping the compressor at optimal times dependent on dynamic demand. Smartcool trumpets that its technology can reduce the energy consumption of air conditioning, refrigeration and heat pump systems by up to 40%.
Plenty of household brands have employed the system, including 7-Eleven, General Electric (NYSE:GE), Jaguar, Radisson Hotels and Resorts and Emcor (NYSE:EME), to name a few. In fact, Smartcool says that its systems have been installed in over 30,000 locations in the past two decades. The list continues to grow, including Sanford Springs Golf Club & Hotel, Oxfordshire Golf Resort and Dale Hill Golf Resort in the United Kingdom and Apogee Condominiums in Florida recently.
Europe is a particular sweet spot for Smartcool, especially within the food retail market, an opportunity that tops $18 billion globally. The company is also allocating resources to make a splash in the home and small business energy management space, a market that is forecast to experience 400% growth in the next four years.
Smartcool makes its systems even more attractive financially by allowing customers to pay for the systems out of monthly utilities savings versus initial up-front capital. This is easily monitored through a partnership with Panoramic Power, whose technology monitors the exact amount of energy savings in compressors.
To continue broadening its footprint, Smartcool has inked reseller agreements with Rexel, Edmundson, Matrix, E*On and Utility Team, amongst others.
The efforts are paying off based upon growth during the first quarter of 2018. On June 1, Smartcool reported revenue of $314,363 for the quarter, up $85,957 from the year prior quarter. Higher sales and improved gross margins helped cut the net loss for the quarter to $238,116 from $360,949 in Q1 2017.
The loss was attributable to a jump in general and administrative expenses related to preparing to launch the new ECOHome product into the residential market.
At the end of the quarter, Smartcool also forged a new relationship with CoolSave Limited in the United Kingdom. CoolSave is a collaboration between Matt Sandell and Colin Higgs, two very accomplished participants in the Energy Performance and Energy Efficiency markets in the U.K. and Europe.
After a thorough analysis of the market, CoolSave believes there is a strong opportunity for Smartcool systems overseas. They have now taken the lead for sales activity in those markets and will be introducing the suite of systems to their extensive network.
To that end, investors should be looking forward to the remainder of 2018 and going forward, as there are a lot of new irons in the fire for Smartcool to hold the course of its expansion and move towards profitability.
