Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on CENTRICA PLC. We currently have 10 research reports from 3 professional analysts.
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|27Feb17 10:30||RNS||Director/PDMR Shareholding|
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Frequency of research reports
Research reports on
Strong 2016 performance, but weak guidance and dividend below expectations
23 Feb 17
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.
16 Dec 16
Investors appear to have rapidly accepted the Fed's more hawkish tone as one of the inevitable costs of participating in more expansive economic policy. Its almost 'close your eyes and trust in Trump'! Confidence in Thursday's the European session, during which the Euro hit its lowest point against the US$ since the beginning of 2003, saw the zone's main indices move sharply ahead with London itself not far behind. This spilt broadly into North American trading, seeing the Dow and other main markets recapture roughly half of Wednesday's losses. The price continued to be paid, of course, through global bond markets, whose sell-off continued on Thursday having wiped out an estimated US$1 trillion of value from international government debt since 8th November. Asian markets also rallied, reversing modestly weaker openings into small gains by the close, led by the Nikkei which continues to celebrate more than a 13% fall in the Yen versus the US$ since the presidential election. Traders appeared neither surprised nor concerned by the seemingly uneventful meeting of Leaders of the European Union in which the various institutions and national governments began to argue over their individual responsibilities during forthcoming Brexit negotiations, although the principal findings amply demonstrated just how complex the issues actually are the extended period required to reach agreement. One point of accord was found, however, regarding the new security threat posed by Trump's call for the Continent to shoulder a greater responsibility for its own military and defence duties, resulting in approval for forward planning to increase spend in these areas. Meanwhile, Greece's refusal to back down in its escalating conflict with creditors, as judges on Thursday approved annual bonuses for poorer pensioners and tax relief for the Aegean Islands that have received refugees, sparked angry exchanges with Germany and highlighted again the extent of policy disagreement between member states. Today is expected to see rather lacklustre trading in London, as investors await macro releases including the CBI Industrial Trends Survey and Bank of England Quarterly Bulletin; the Eurozone is due to publish its Harmonised CPI figures, while the EU is due to provide Housing Starts before the Fed's Jeffrey Lacker speaks. Corporates due to provide earnings or trading updates include Bilby (BILB.L), MySQUAR (MYSQ.L), Trinity Mirror (TNI.L) and United Carpets (UCG.L). The FTSE-100 is seen moving 5 points either side of unchanged in opening trade this morning.
Trading upgrade provides a guidance uplift
15 Dec 16
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.
Strong cash flow performance is reassuring
28 Jul 16
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.
Trading update: customer losses accelerate, but guidance confirmed
19 Apr 16
Centrica has published an operational update with no revenue or profit numbers but confirms its full-year objectives: adjusted operating cash flows above £2bn, capex should not exceed £1bn (in which £500m would be focused on E&P) and a £200m efficiency programme is still expected to be achieved in 2016, as part of the £750m/year cost reduction programme. Moreover, the group expects to add to the direct headcount reduction expected in 2016 of 3,000 employees, of which 800 have been already been achieved in the first three months. Nevertheless, the group continues to lose clients as its home energy supply accounts have been reduced by a further 1.5% in the first quarter (an additional 224,000 customers lost, compared to 119,000 customers lost in Q1 15). Due to this, a more aggressive strategy will be applied from Q2 16 to stop the loss of customers. The negative effect may be offset by North American home accounts (although not quantified). As previously announced, the group is to close the Killingholme power station after it has served the National Grid for 2015’s winter supplemental balancing reserve.
N+1 Singer - Morning Song 21-03-2017
21 Mar 17
accesso Technology (ACSO LN) Full year results in line, but key trading months still ahead | Augean (AUG LN) Double digit growth in ’16, good start to ‘17 | Earthport (EPO LN) Interims show continued top line strength | Goals Soccer Centres (GOAL LN) Good momentum under new team. It’s now all about delivery | IQE (IQE LN) FY’16 results prompt further upgrades | Microsaic Systems (MSYS LN) Challenges in 2016, strategy remains in place | mporium Group (MPM LN) Funds raised to help execute strategy | RhythmOne (RTHM LN) Dawn of the independents | ScS Group (SCS LN) Strong progress on key growth initiatives albeit comps now toughen | Sinclair Pharma (SPH LN) FY results: EBITDA ahead, Instalift™ gaining pace | Vectura Group (VEC LN) FY (9-month) results
N+1 Singer - N1S Trend spotting - Strategy update
08 Mar 17
In this new product we present some strategy theme updates arising out of our latest analysis of macro trends and economic data and our innovative Quant work. We also look at upcoming events and suggest topping up on some of our Best Ideas for 2017.
N+1 Singer - Augean - Double digit growth in ’16, good start to ‘17
21 Mar 17
Augean reported another year of double digit growth for 2016, with profits in line with our forecasts. Sales grew by 21% excluding landfill tax, while adjusted PBT grew by 18% to £7.1m before amortisation of acquired intangibles. DPS was increased by 54% to 1.0p, 25% ahead of our estimate. The business units made further strategic progress, with revenues from their top 20 customers increasing from 42% to 43% of the total, of which 88% was under contract or a framework agreement, increasing forward visibility. There has been an encouraging start to 2017 and management is confident of delivering another year of profits growth. The shares trade on undemanding single digit multiples, offering good value.
Scott deal puts spotlight back on corporate strategy and valuation
17 Mar 17
The acquisition of Scott Safety by 3M announced yesterday is not a huge surprise but it puts the spotlight back on (1) Avon’s corporate strategy as two strong competitors merge and (2) Avon’s break-up valuation given the rich multiple (12.9x EBITDA) being paid by 3M. Avon and other competitors, particularly MSA Safety, cannot ignore the fact that Scott, which is the leader in SCBA (self-contained breathing apparatus) market and 3M, which derives the bulk of sales from industrial hard hats and masks, would together have the most comprehensive portfolio of products in the PPE (Personal Protective Equipment) market. The good news for investors is that if we were to apply similar EBITDA multiple, then Avon’s Protection & Defence business alone would account for the entire market cap. In effect, at the current share price, investors are getting the Dairy business for free. Our sum-of-the parts model now values the shares at 1,279p, up 7% compared with 1,200p previously.
N+1 Singer - Morning Song 22-03-2017
22 Mar 17
Carador Income Fund (CIFU LN) Premium rating restored, high levels of refinancing activity | Cello Group (CLL LN) Outlook getting brighter – watch Pulsar | Eckoh (ECK LN) Largest ever US secure payments win | eg solutions (EGS LN) Full year results in line | Futura Medical (FUM LN) Licensing deal for CSD500 in Portugal | Verona Pharma (VRP LN) Global agreement with QuintilesIMS to support development of RPL554 | Xaar (XAR LN) 2016 results slightly ahead, reduced visibility in 2017