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.
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|17Mar17 08:30||RNS||Director/PDMR Shareholding|
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|16Mar17 15:45||RNS||Holding(s) in Company|
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.
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