Windar Photonics – the latest contract win shows that this technology group is just scratching the surface of its potential, shares now 54.50, TP 100p

12.08.2025

Yesterday Windar Photonics (LON:WPHO), the supplier of wind technology solutions, announced that it had received a significant new order from a US customer for a total value of $2.6m.

Scheduled for delivery and commissioning in the third quarter of 2025, the order is for a full wind farm deployment to retrofit Vestas V82 wind turbines.

The project, which represents the eighth full wind farm roll-out of the Windar solution in North America including both the Company's LiDAR sensor and the Nexus OS software; where approximately 14% of the order value is attributable to software-related revenue from the Windar Nexus OS software and its associated licenses.

The order highlights the continued and growing demand for the company's technology in the North American market, where Windar's optimisation and monitoring solution is close to being deployed on more than 25% of the entire North American fleet of Vestas V82 turbines.

Windar CEO Jorgen Korsgaard Jensen stated that:

"This latest order is another fantastic achievement for Windar Photonics and a clear indicator of the strong demand for our technology in North America.

It's clear that our Monitoring and Optimisation solution is delivering significant value, and we are proud to be a trusted partner in helping our customers enhance their wind farm performance."

The Business

This company is a technology group that has developed LiDAR wind sensors and a related software suite designed to efficiently and cost effectively increase the power output and reduce the lifetime operating costs of electricity generating wind turbines.

LiDAR wind sensors in general are designed to remotely measure wind speed and direction.

The group's key physical products are the WindEYE™ and WindVISION™ sensors which measure the wind speed at different measuring points by scanning a laser beam ahead of the wind turbine.

By measuring the wind speed a variety of wind information is derived such as wind direction, turbulence, wind shear, wind gust and wake detection.

The products and various algorithms are designed for the general optimisation of wind turbines both in respect of increasing the Annual Energy Production and general load reduction options.

The group has recently developed and implemented the first phase of its Nexus software platform to support the data driven management of the improvement of performance of individual wind turbines and in future turbine farms.

AGM Trading Update

At the start of this month, the group held its AGM, ahead of which Chairman David Lis stated that:

"As recently stated in our FY results announcement in July, Windar is in a strong position, supported by a solid forward orderbook and a growing pipeline of opportunities and as a result is well placed to deliver a significant increase in revenues during 2025 compared to 2024.

Furthermore, utilising our strong cash position, we are investing in developing our team, our manufacturing footprint and technologies so we can best deliver on our growth potential.

In North America, the outlook is positive, backed by an increased number of customer interactions which were further enhanced by our successful Cleanpower exhibition in May 2025.

We are targeting closing 1-3 major contracts in the second half of 2025.

In Asia (outside China), we have seen increased activity especially in Japan and Australia.

Beside several test projects - some already in progress - our target is to close 1 full farm rollout in the region in the second half of 2025.

In China, the operating environment has been challenging, nevertheless we have made direct sales approaches to specific IPPs, and we are expecting to see some uptake in activity in the second half of 2025.

As part of scaling the business we have completed the relocation of our main production and R&D facilities to a new larger site in Ishoj, Denmark, which will enable a quintupling of production capacity. In addition, we are close to signing a senior sales Director in both North America and Europe."

The Equity

There are some 96.4m shares in issue.

The larger holders include Aldbridge Services (23.70%), Pasinika SARL for Jorgen Jensen, CEO, (5.86%), Paul Hodges, Dir, (4.4%), Octopus Investments (4.05%), Janus Henderson (2.90%), Unicorn Asset Management (3.04%), Technical University of Denmark (2.44%), Amati Global Investors (2.40%), Milton Holding Horsens (2.20%), David Lis, Dir, (2.10%), Johan Petersen (1.95%), and Gavin Manson, Dir, (0.44%).

Broker’s Views

Analysts Nick Spoliar and Charlie Cullen, at Zeus Capital, noted both its growing sales momentum and rising quality of software earnings, and raised their Target Price on the group’s shares from 75p to 90p.

They suggest that the latest contract win comes at a time when a number of important developments at group level are expected to add fuel to the trading momentum.

“With net cash of close to €6m at the FY24A year end and progressive forecasts, we view WPHO as very well placed to fulfil its ambitions in the US and other markets, where there are very sizeable retrofit opportunities for WPHO with a wide range of wind turbines set to take it beyond its Vestas V82 turbine heartland.”

For the year to end-December 2025 the analysts estimate that group sales will be more than doubled to €10.0m (€4.6m), with adjusted pre-tax profits of €2.1m (loss €0.9m), generating earnings of 2.2c (1.1c) per share.

The 2026 year could see €15.0m revenues, €5.0m profits, worth 5.1c per share in earnings.

At Dowgate Capital, its analysts Lorne Daniel and Paul Richards have a Buy out on the stock, with a 100p a share Target Price.

Upon the new contract win they stated that:

“Although Windar is increasingly well positioned in the wind industry, the FY24 results last month warned of growing customer caution due to tariffs and macroeconomic uncertainty.

Current guidance is nevertheless ambitious, targeting €9.1m sales and €2.0m aEBITDA.

Today’s order shows that customers have not been dissuaded and those growth targets are very much achievable.”

Their estimates for 2025 are for €9.1m sales, €2.0m profits, and 1.8c earnings.

Next year could see €14.1m sales, €4.5m profits and 3.7c earnings.

Going further ahead they look for 2027 to show €23.4m sales, €10.5m profits and 8.8c per share in earnings.

My View

Just two months ago this group’s shares peaked at 61.50p, within a whisker of my latest Target Price.

Despite having subsequently fallen back in price to 48p before edging gently better to the current 54.50p, they are still being overlooked by investors who don’t seem to realise that this is due to make some mega-profits, relative to its size.

I remain totally confident of that 66p TP being achieved.

(Profile 09.06.21 @ 29.5p set a Target Price of 38p*)

(Profile 16.06.25 @ 53p set a Target Price at 66p)

Asterisk * denotes that Target Price has been achieved since Profile publication.