Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on SSE PLC. We currently have 7 research reports from 1 professional analysts.
|10Feb17 11:43||RNS||Director/PDMR Shareholding|
|10Feb17 10:54||RNS||Director/PDMR Shareholding|
|08Feb17 07:15||RNS||Transaction in Own Shares|
|07Feb17 15:06||RNS||Director/PDMR Shareholding|
|07Feb17 07:15||RNS||Transaction in Own Shares|
|06Feb17 07:00||RNS||2017 Capacity Market Year-Ahead Auction|
|31Jan17 12:17||RNS||Total Voting Rights|
Frequency of research reports
Research reports on
Retail and wholesale weigh on the half-year results
10 Nov 16
SSE has published its half-year results which show revenues falling 18.6% yoy to £11.26bn. However, a substantial reduction in the COGS (-23.5% yoy) has boosted both the gross and operating profit to reach £636.7m (+141% yoy). Along the same lines, the net profit for the company reached £476.2m, which is a +147% yoy increase, translating into an EPS of 47.2p. However, on an adjusted basis, it is a completely different story. Adjusted operating profit decreased by 9.2% to £637.2m, with an adjusted operating profit before tax falling 13.3% due to a +5.4% rise in financial expenses. Along the same lines and added to higher hybrid coupon payments, the adjusted net profit of the group reached £344.8m, which is a 24.4% fall, with EPS reaching 34.2p, down 25.5%. The group proposed an interim dividend payment of 27.4p, which is a 1.9% yoy increase, while still maintaining its EPS FY2016/17 target of 120p.
Disposal of SGN obtains a good price, but slightly below our expectations
17 Oct 16
SSE has just signed an agreement for the disposal of a 16.7% stake in Scotia Gas Networks Limited (SGN) to a fully-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) for an all-cash consideration of £621m (including debt). The transaction is expected to be completed by the end of the month. SSE will retain a 33.3% stake in SGN. SSE will set out its intentions with regard to returning value to shareholders when the half-year results are released.
Balanced operational performance, but retail customer losses continue
21 Jul 16
SSE published its trading update where electricity production fell in the first quarter by 31.4% to 1.51TWh, however, output from gas production rose 37.4% to 158 million therms as a result of the Greater Laggan Area assets coming online. Moreover, customer losses continue but have slowed down with a decrease in its customer base of 0.6% in the first quarter to 8.16 million. On the other hand, home service customer accounts partially compensated the 50k customer losses in the retail business as they increased by 16k to 416k. The capex target has been maintained at £1.75bn for 2016/17, in addition to an expected envelope of £5.5-6bn up to March 2020. The group confirms that it expects to return to growth with adjusted EPS to be at least 120p and a dividend increase of at least RPI inflation for 2016-17 and thereafter. The disposal of a stake in the gas distribution system has started with the group targeting to sell up to a 30% stake of its 50% equity stake in SGN. If completed, SSE should use the proceeds either as a return to shareholders or to boost additional investment. In addition to this, an agreement has been found to dispose of the three remaining PFI street lighting entities.
P&L results above expectations; weak cash flows and dividend. Gas distribution stake sale
18 May 16
Positive FY15-16 results for the company despite the challenging conditions as the adjusted operating profit decreased by 3% yoy to £1,824m, but this was ahead of estimates. Following the same path, adjusted profit before tax fell 3.2% yoy to £1,513m, which is 2% better than expected. Reported net profit decreased by 15.2% yoy to £460m, affected by £889.8m of impartment charges linked to the wholesale market, although on an adjusted basis net income fell 1.8% to £1,195m but beating forecasts, translating into an EPS of 119.5p which exceeded the company’s guidance of 115p, as there was less dilution. Based on this, the company proposed a dividend payment of 89.4p, a 1.1% yoy increase with a dividend cover of 1.34x; however, the proposed payment is below expectations. Moreover, net debt increased 11% yoy to £8,395m. Also, SSE is considering the divestment of up to one third of its 50% equity stake in the gas distribution business (Scotia Gas Network: SGN) in addition to the current £1bn disposal programme currently in place. The guidance for 2016/17 is for an increase in operating profit, supported by networks and wholesale as retail should have a flat performance. Furthermore, the company expects to obtain at least an EPS of 120p with dividend payment growth linked to inflation and capex of around £1.75bn.
Weak operating results, but guidance maintained
28 Jan 16
The group has published a trading statement with rather weak operational results: electricity output decreased by 12% yoy on gas-fired power and 27% yoy on the coal assets. Gas production decreased by 2% yoy. The group lost 3.5% of its customers in electricity and gas to 8.28m, but increased by 14% its customer service accounts (390k). Household electricity consumption decreased by 3% and gas consumption remained flat. The number of customer interruptions decreased by 7%, which is a positive for networks. Despite this, SSE confirmed adjusted EPS at 115p and the dividend payment for 2015/16 with an increase at least linked to inflation and a similar policy for next year's dividend payment (growth at least in line with inflation). The group has announced that it will cut household gas prices by 5.3% starting from March 2016.
Increased operating costs push profits down
12 Nov 15
Mixed set of results for the group for the half year mark with revenues increasing by 11.5% to £13.83bn, although increasing costs (+13% ytd) have decreased the operating profit of the group by 24.4% to £263m, pushing downwards the net income of the group to a 23.5% fall to £192m, despite lower interest expenses. Hence, EPS reached 19.4p per share, which is 27.8% below the interim dividend proposed, which itself has been increased by 1.1% to 26.9p per share. The net debt of the group has increased more than expected to £4.98bn (an 8.7% ytd increase) without hybrid bonds, although adjusted with hybrids it rises up to £7.96bn. The increase is driven by an increase in capital investment to £757m, mostly attributed to networks (53%), increasing the regulated asset value. Concerning guidance, it has been stated that last year the group earned a quarter of its full-year operating profits in the first half, while this would correspond to 1/3rd for the current 2015-16 year, which is in line with our expectations.
20 Feb 17
Hayward Tyler Group* (HAYT): Trading update and financial position (CORP) | Petra Diamonds (PDL): Interim results (BUY) | Gemfields* (GEM): Interim results (CORP) | Premaitha Health* (NIPT): Middle East momentum (CORP) | Sound Energy (SOU): Acquisition update and TE-8 well spud (HOLD) | Proactis* (PHD): Interim trading on track (CORP) | 7digital* (7DIG): Automotive contract win (CORP)
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
N+1 Singer - Small-cap quantitative research - New quality style screen + 11 quality focus stocks
09 Feb 17
We introduce our fourth and final style screen representing “quality”. This screens for stocks with the best combination of high returns on capital/equity, EBIT margins and operating cash-flow conversion rates. These criteria should help us monitor how strong underlying returns translate into share price performance over time and under varying market conditions. The screen selects the “best” 25 stocks from our universe of just over 500 stocks and, as usual, we focus on a shorter list of stocks we cover or otherwise know and believe to be particularly interesting. We provide brief investment summaries on these focus stocks on pages 4 – 9. We will monitor performance and refresh the screen in approximately 3-4 months time.
Emerging from the clouds
16 Feb 17
Rolls-Royce’s underlying performance in FY16 was ahead of both its own and market expectations. Media focus on the non-cash £4.4bn headline FX loss is missing what looks to be the basis for optimism. As the civil model starts to move from investment in engines for the A350 and A330neo into the aftermarket delivery phase over the remainder of the decade, we think cash flow is likely to improve, particularly if supported by an eventual recovery in Marine.
15 Feb 17
At the current market capitalisation of £29m, we believe the shares are significantly undervalued. We estimate that the highly profitable Maritime business is alone worth at least £40m. With net cash of £9m at end-2016, this implies that the market is currently ascribing a combined negative value of £17m to the rest of the group, which together account for c.54% of group revenues. This is very harsh given the management actions to transform TP Group to a profit-driven Tier 2 specialist services and engineering company are bearing fruits across the divisions. TPG Managed Solutions is expected to more than double its profits in 2017, while TPG Engineering and Design & Technology are on course to deliver sustainable profits from 2019. Even if we ascribe zero value to Engineering, Design & Technology and Managed Solutions, the shares are worth 9.5p a share, a 38% upside from the current share price. BUY.
Small Cap Breakfast
16 Feb 17
Saffron Energy—Schedule One update. Raising £2.5m, expected Mkt Cap £7.7m. Admission due 24 Feb. Italian Oil & Gas Play Guinness Oil & Gas Exploration—Publication of prospectus. Seeking to raise £50m and invest in 15 exploration companies at launch, with plans to grow the portfolio to 30 positions during its lifetime. Issue closing 23 Feb. Arix Bioscience — Intention to float on the main market from the global healthcare and life science Company supporting medical innovation. Raised £52m in Feb 16 with investors including Woodford Investment Management