Equity Research, Broker Reports, and media content on Centrica

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  • 01 Oct 19
STATE OF CHARGE - INVESTMENT OPPORTUNITIES IN EV CHARGING

Government bans on new fossil fueled vehicles in many major economies are likely to drive significant growth in electric vehicles (“EVs”) over the next twenty years. This will create growth in electricity demand from EV charging. The volume of energy to be supplied creates opportunities for both supply companies and generators and the provision of charge points is already creating a new industry. However, the timing of this demand puts pressure on local distribution infrastructure. While smart charging and vehicle to grid technology offer solutions, we believe these will only be partial given likely charging behaviour and as a result there will be demand for additional grid capacity and for other solutions. These other solutions include charger located storage and distributed generation.

Companies: CNA NG/ YU/ DRX GOOD RED SMS IKA AFC

  • 30 Jul 19
CEO steps down, dividend slashed

FY18 had raised concerns about the sustainability of the dividend, and Centrica has finally cut it by nearly 60% after the catastrophic figures for H1. The group has announced its intention to exit from oil and gas production in order to refocus its activities on services around the transition to low-carbon. The group tried to reassure about the outlook for H2, confirming its cash flow and net debt full-year targets.

Companies: Centrica
  • 20 Jun 19
Is Centrica a value trap?

In our last model update we affirmed that, in the long run, a recovery was still possible, but that we preferred to remain cautious for the time being and wait for some news flow positive enough to cause an inflection point. Unfortunately, in the absence of a positive element, we have now decided to review our approaches and adopt a more conservative view.

Companies: Centrica
  • 21 Feb 19
2018-20 under pressure, causing uncertainty about the dividend

Centrica delivered a mixed set of results FY18, adjusted operating cash flow and net debt were within the target ranges, but EPS is 2.6% lower than expected. Due to the UK default tariff cap the low volumes in E&P and nuclear, group downgraded AOCF guidance for 2019 is 1.8-2.0, or 13.6% lower than the required average pace of growth to reach the 2018-20 target.

Companies: Centrica
  • 22 Nov 18
Customers kept walking away in Q3 18

Centrica released a weak trading statement. Competition remained intense in the UK during the four months to October. The company lost 372k accounts in its Home business, while the E&P business suffered from unplanned outages forcing Spirit Energy to cut its 2018 production target by 5%. However, the group confirmed its 12p dividend target for 2018, ensuring a comfy 8.8% yield at today’s price, thus limiting the downside risk.

Companies: Centrica
  • 31 Jul 18
Rising wholesale costs and intense competition weigh on H1 results

Centrica released a rather weak set of H1 results. EBITDA was broadly flat while adjusted operating profit was down 4% as profit recovery in E&P was more than offset by tough market conditions in the Retail segment. The group confirmed its FY18 objectives and expects to pay a stable dividend in 2018 (12p).

Companies: Centrica
  • 14 May 18
Q1 chill boosts Centrica's retail activities, outlook confirmed

Centrica released a short Q1 trading update. Centrica’s management said that the overall performance has been good in the year to date, driven by higher demand for gas following the colder weather and confirmed its set of FY targets (including the 12p dividend), with revenue growth expected to be weighted towards the second half of the year.

Companies: Centrica
  • 22 Feb 18
The business division bites, consumer losses continue; dividend maintained until 2020

• The Centrica Business division hammers the group’s results. • The company lost 5.2% of its clients (-1.4m) in the customer segment and -7.1% in the Business one (-100k). • Price cap should hurt 2019 margins (and earnings), but impact unknown. • Reassurance on the dividend side and OCF guidance (£2.1-2.3bn) is a positive.

Companies: Centrica
  • 23 Nov 17
Profit warning and accelerated customer losses; dividend under pressure

The group has stated in its trading update that it expects adjusted EPS for 2017 to be close to 12.5p, which is 17% below the 15.2p we previously expected. It confirmed its adjusted net debt target at £2.5-3bn and operating cash flows to be above £2bn. It has also raised its cost-cutting target for the year to £300m, from the previous £250m. It maintains its capex target at close to £1bn (with £500m for E&P). Moreover, driven by the group’s exposure to the retail market, it confirmed that the company lost 823k customers in the last three months. In addition to this, the group has stated that during the transition phase towards greater customer exposure and diversification to improve margins, Centrica would be forced to have a dividend cover below its historic levels.

Companies: Centrica
  • 02 Aug 17
Solid H1 and a price rise amid the transition

Centrica’s solid H1 numbers and 12.5% electricity tariff increase announced yesterday morning were both in line with market expectations. Operationally, the business was resilient given this year’s warm weather and challenging competitive dynamics. The political impact of the tariff hike was mitigated by protecting 200,000 vulnerable customers, a move we view as sensible given especially high levels of political risk in UK retail energy currently. The bigger story for Centrica shareholders remains the long-term shift away from upstream ‘asset businesses’ to tech-enabled customer businesses. Yesterday’s announcements do not change that strategy and the reality is that Centrica is very early in its strategic change of direction.

Companies: Centrica
  • 01 Aug 17
The last member of the “Big Six” to hike prices

Centrica reported a mixed set of results for the first half. The company achieved higher revenue (+7% to £14.29bn) and EBITDA (+2% to £1,293m) despite unfavourable weather conditions and competitive pressures. However, the group saw an 11% contraction in adjusted net earnings to £449m. As a direct consequence, it announced a 12.5% increase in the price of electricity on the British Gas standard tariff, effective from mid-September onwards. This is the first increase in four years, while gas prices will remain the same. Adjusted operating cash flow (AOCF) fell by 9% to £1,242m, reflecting a one-off working capital inflow in 2016. However, net debt has improved to £2,941m (a 22% reduction), on the back of the portfolio rotation strategy. Moreover, the group confirmed its full-year guidance as its strategic transformation and efficiency programme are well on track: adjusted operating cash flow >£2bn net debt in the £2.5-3bn range by year-end a further £250m efficiency savings The company proposed a flat interim dividend of £3.6p/share (30% of the FY2016 dividend), in line with historical practices.

Companies: Centrica
  • 23 Feb 17
Strong 2016 performance, but weak guidance and dividend below expectations

The group has provided strong results given the conditions, beating forecasts across the board on its 2016 performance. Revenue decreased by 3% yoy to £27.1bn, but the contraction is less dramatic than expected. Adjusted operating profit, on the other hand, increased by 3.8% yoy and is 6% above market consensus, with adjusted net income on the same path with 3.8% yoy growth to €895m. EPS decreased by 2% yoy due to the issued shares and the diluting effect of the capital increase made last year to finance the acquisition in the retail business. On a reported basis, the company had an operating profit of £2,486m and £1,672m in net income, a strong performance. The best part came from the operating cash flow, the main objective of the company, as this grew by 19% yoy to £2,686m. The E&P business is in positive territory with a positive free cash flow. As a result, net debt decreased by 27% to £3.5bn, far better than previously expected. The dividend payment will be 12p/share, in line with last year’s, but below expectations given that the expected improvement on cash flows should have benefited shareholder remuneration, but it didn’t. Operating cash flows are expected to be above £2bn, which implies a contraction in the performance achieved over the year. Investments will be limited to £1bn for 2017.

Companies: Centrica
  • 16 Jan 17
How sustainable are current dividends

As rates rise, "yieldy" stocks require careful consideration. Sustainability/track record key.

Companies: AHTDCGADMPAYCNAISATQQ/IIICAPCCARDAGRJMATTRIGUBM
  • 15 Dec 16
Trading upgrade provides a guidance uplift

Centrica has published its Q3 16 trading update, raising its guidance expectations for 2016 with operating cash flows now expected in the £2.4-2.6bn range (+20%) rather than the £2bn earlier. Moreover, due to the gas assets’ better performance, benefits from the cost-cutting programme, and a strong performance in energy marketing and trading, the group expects the full-year EPS to be around 16.5p, whereas the market estimates something close to 15.4p (+7.1%). Nonetheless, the new expectations imply that EPS is expected to decrease by 4% yoy, although this is less than previously expected (-10.5%), which represents a substantial improvement.

Companies: Centrica
  • 28 Jul 16
Strong cash flow performance is reassuring

Results fell 13% yoy to £13.38bn. However, £969m from the re-measurement of energy contracts has positively affected the reported results leading to a 31.5% yoy increase in operating profit to £1.76bn and net income to have a 9.3% yoy increase to £1.15bn, translating into an EPS of 22.2p. As a result, the company has increased the interim dividend by 1% to 3.6p. Nevertheless, on an adjusted basis the results show a different story as operating profit fell 12% yoy to £853m, net income decreased 14% yoy to £507m with EPS reaching 9.8p. Although, on an adjusted basis, operating cash flows increased by 19%yoy to £1.37bn. The strong cash flow performance in the first quarter has allowed the group to increase capex by 16% yoy to £444m which, added to the £694m capital increase performed earlier in the year, has allowed the company to have a comfortable net increase in cash of £1.28bn at the half year mark. This has allowed the company to achieve a 23% yoy decrease in net debt, to reach £3.8bn. Concerning guidance, the 2016 full-year expectation on operating cash flows above £2bn is expected to be exceeded. Moreover, as strong progress has been achieved in cost-cutting measures, as £141m has been achieved in the first half, the 2016 cost cutting target has been raised to £300m. Headcounts are expected to be reduced by around 3,000 FTEs.

Companies: Centrica

Research, Charts & Company Announcements

Research Tree provides access to ongoing research coverage, media content and regulatory news on Centrica. We currently have 22 research reports from 5 professional analysts.

Open
80.3p
Range Today
79.1/81.6p
52 Week
64.6/141p
Daily Volume
9.9m
# Shares
5,819m
Daily Liquidity
(0.17%)
Pension Liability
£1,132m
Enterprise Value
£7,629m
Market Cap
£4,743m
Latest PE (hist)
6.35
Div Yield
16.85

Latest News/RNS

(more news)
Date Source Announcement
11Dec19 16:30 RNS Director/PDMR Shareholding
11Dec19 16:30 RNS Holding(s) in Company
05Dec19 09:00 RNS Directorate Change
04Dec19 16:30 RNS Director/PDMR Shareholding
02Dec19 16:30 RNS Total Voting Rights
26Nov19 16:19 RNS Director/PDMR Shareholding
21Nov19 07:00 RNS Trading Statement
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  • 10 Dec 19
Renewed banking facilities and HMRC payment

Augean has announced the renewal and extension of the Group’s banking facilities and also that it has paid all outstanding and disputed HMRC Landfill Tax assessments totalling £40.4m, including accrued interest. Management reaffirms it will continue to robustly challenge all HMRC assessments based on legal advice that the Group has correctly collected and paid appropriate landfill tax. The HMRC payment allows management to focus on the strategic development of the Group and provides investors with a much cleaner basis for valuation.

Companies: Augean
  • 10 Dec 19
Short term caution, medium term confidence

Zytronic’s FY19 results (to September) are in line with expectations, confirming a customary improvement in H2 activity. As highlighted previously, a decline in Gaming volumes was the key driver of a 10% decline in Group revenue during the year. There is some near term caution in the statement with trading in the first two months behind the prior year. Our FY20 PBT forecast reduces by 29% as a result. Nevertheless, the pipeline is substantially higher than last year, underpinning medium term confidence. The dividend will no doubt be a focus for investors. This was maintained at 22.8p for the full year (11.8% yield), and the future policy is under consideration by the Board. On our revised forecasts, the shares are trading on 14.5x P/E with £13m net cash.

Companies: Zytronic
  • 05 Dec 19
LIBERUM: PayPoint* - Growth drivers becoming more powerful

The H1 20 results were ahead. PBT fell 5% yoy to £24.0m and FD EPS fell 5% to 28.5p due to the non-repeat of the VAT credit in H1 19, although both were 7% ahead of our estimates.

Companies: Paypoint
  • 05 Dec 19
Solid State - Record trading in H120

Solid State delivered an 11% pro forma increase in group revenues and a 60% jump in adjusted profit before tax during H120. While some of this increase was attributable to factors such as favourable forex, which management expects will reverse in H220, the group is showing a sustainable benefit from the acquisition of Pacer in November 2018 and a drive to higher margin added-value activities in the Manufacturing division. Management is confident of meeting consensus expectations for the year, which are broadly unchanged since the September upgrade. The shares continue to trade at a substantial discount to peers for prospective P/E.

Companies: Solid State
  • 21 Oct 19
Quarterly Research Outlook Autumn 2019

Following continued delays of a Brexit agreement, few sectors within the UK market have remained attractive to investors despite low valuations. One sector which has continued to outperform despite the political drama has been the UK video gaming sector (henceforth UK gaming), which we are fans of. We believe a combination of sector-leading growth, strong cash conversion and timely cyclical positioning support our positive view on the UK video gaming sector.

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  • 10 Dec 19
Strong bounce back in PBT delivered in H2

Driver delivered PBT of £3.0m in FY19 (FY18: £3.8m). Whilst this is a decrease on the prior year, the Group delivered a strong improvement in half on half earnings, with PBT of £2.2m in H2 vs. £0.8m in H1. This improvement was primarily a result of cost savings throughout the second half which should benefit FY20. Importantly, the positive momentum in H2 has continued into the new financial year, with two months of strong trading already achieved. We maintain our FY20 PBT forecast at £3.7m and we would expect a more even H1/H2 weighting. We also introduce an FY21 forecast, which implies continued earnings growth. The balance sheet remains strong (net cash of £5.4m) and, with a promising business pipeline, we expect a return to growth in FY20.

Companies: Driver Group
  • 28 Nov 19
Cenkos: TClarke Plc - Sparking into life

We effectively re-initiate TClarke on a buy rating against a ‘model fair value' of 136p (20% upside). A positive trading update confirms 2019 consensus and the achievement of target 3% margins. The next leg of growth will focus on revenue expansion (and margin sustainability) which potentially drives high-single digit earnings growth beyond 2021. This is scarcely recognised by a 2021e PE of c6x, dividend yield of 4.4% and FCF yield rising through 9%. The stock has clear attractions on valuation and income grounds.

Companies: TClarke
  • 09 Dec 19
discoverIE Group - Focus on growth markets paying off

discoverIE’s H1 results confirm it is making continued good progress with its strategy to build its design and manufacturing (D&M) business. Underlying organic group revenue growth of 5% was boosted by higher margin acquisitions and the group is fast approaching its mid-term operating margin target. Targeting higher growth markets within D&M and focusing on efficiency in Custom Supply supports ongoing growth in revenues and profitability.

Companies: Discoverie Group
  • 10 Dec 19
Capital Access' Hot Off The Wires - The Day Ahead

Our Hot Off The Wires daily newsletter takes a look at the morning's market movements, news stories and company announcements. Don't forget to have a go at our daily trivia! Companies mentioned in this edition include: Ashtead, Travis Perkins, Watches of Switzerland, JD Wetherspoon, S&U, McColl's Retail, Hipgnosis Songs Fund, Ted Baker, Premier Foods and OnTheMarket. If you would like to be subscribed, please email us at info@capitalaccessgroup.co.uk.

Companies: OTMP SUS TPK

  • 11 Dec 19
XP Power - Temporary supply issues cause Q4 shortfall

In the process of upgrading its group-wide ERP system, XP Power suffered some short-term disruptions to shipments from mid-October to mid-November. While shipments have returned to normal levels, the company expects a revenue shortfall of c £6m for FY19, with a consequent impact on earnings. We have revised our FY19 forecasts resulting in a 10.7% reduction in our normalised EPS forecast. As order intake has been robust so far this quarter, we maintain our FY20 estimates.

Companies: XP Power
  • 04 Nov 19
THE MONTHLY November 2019

The trade-off in the risk/reward for gold and gold mining equities is improving, as central banks push the current iteration of the post-World War II Bretton Woods financial order towards its limits.

Companies: AVO AJB AGY ARBB BUR CLIG DNL DPP FLTA GTLY GDR MCL MUR NSF PCA PIN ESRE PHP RE/ RECI RMDL STX SCE TON SHED VTA W7L

  • 03 Dec 19
Cenkos: Marlowe Plc -- Trading ahead of expectations

Marlowe has produced a strong set of results for H1/20A, with improved cross-selling helping drive an acceleration in organic revenue growth to +6.5% YoY. With H2/20E starting well, we upgrade our FY20E and FY21E forecasts to account for this improved growth trajectory, along with the impact of recent acquisitions. Buy.

Companies: Marlowe
  • 10 Dec 19
LIBERUM: Mind Gym* - Strong revenue growth and continued investment

Interim results in line with expectations with 24% revenue growth, and strength at key accounts. We leave our full year earnings estimates unchanged and continue to expect FY20 FD EPS of 7.6p.

Companies: Mind Gym
  • 04 Dec 19
An ideal stocking filler for patient investors

What do UK investors most want for Xmas? Well given the angst from the US/China trade spat, UK General Election and Brexit ‘limbo’, we suspect greater clarity would be towards the top of Santa’s list. The good news is that we think much of this uncertainty could be resolved over the next few months, providing not only a welcome boost to capital investment - but also a lift to specialist plant hire firms like Vp, who posted resilient H1’20 numbers this morning.

Companies: VP
  • 06 Dec 19
James Halstead*

AGM statement – continuing to deliver

Companies: James Halstead