LIBERUM: New Energy Nuggets: Hydrogen - the future is green

1H23 : Retail earnings surge by 900% but are these tariffs sustainable?

Centrica published a very strong 1H23 to June 30 with a net operating profit up by 55% on the back of a surge in British Gas Energy operating profit to £969m (1H22: £98m, 1H21: 530£) leading the British newspaper Daily Express to deploy the headline ‘Daylight robbery’ while the current tariffs are becoming politically difficult to justify.

FY2022: Finally, the first dividend payment since 2019!

Centrica released a historical year, amid unprecedentedly high energy markets that supported earnings in the trading activities but also the Upstream business unit. Centrica decided to proceed with the first dividend payment since 2019 as well as an increase in its share buyback operation. Also, criticism concerning these exceptional results should lead the group to reach a key player position in the customer help and support segment, and increase investment in retail and services and solutions.

H1 22: the dividend is back as earnings soar

Centrica released a strong set of results with material year-on-year improvements. As expected, earnings were supported by high and volatile commodity prices, in particular for E&P and nuclear. Operating profit reached £857m (+512%). More importantly, the group resumed shareholder distribution with a £1 interim dividend and a further £2 expected by the end of the year. Bullish view confirmed… also our cautiousness about windfall taxes.

FY21: E&P lifts profits, outlook is positive even if low visibility

Centrica’s FY21 results beat expectations as the E&P subsidiary Spirit Energy benefited from surging commodity prices for oil and gas. Even if the group remains confident regarding the 2022 outlook, the current markets’ volatility enlarge the range of possible outcomes and reduce visibility. Despite the strong figures and an impressive net cash position, no dividend will be proposed for 2021. Instead, Centrica is paving the way for a dividend in respect of 2022 and possible share repurchase pr

Nuke optionality

What if the best solution for the energy transition were … nuclear power? Nuke is back at the heart of political debates in the context of the current energy crisis and massive but insufficient investments in renewables. This short review provides an overview of nuclear power in Europe and speculates on options. This ‘nuke optionality’, hinging on a favourable green taxonomy, is a game-changer for EDF, Centrica, Fortum but also Engie, Iberdrola, Enel and EDP.

H1 21: structural changes before operational profitability

Flat but unsurprising results from Centrica in the first half of the year, as favourable weather conditions and commodity prices were offset by the COVID-19 impact, British Gas engineer strikes and sharp trading conditions. On the positive side, the sale process of Spirit Energy has made progress, and a CMD will be held on 16 November 2021. However, nothing new on the dividend side. Neutral view confirmed due to so many uncertainties surrounding the stock.

FY20 - a weak set of figures

Affected by volumes which were lower than their long-term average and weak commodity prices for the upstream division, the group published a disappointing set of FY20 figures. Although the group’s efforts on its cost structure are notable, we maintain a cautious view on inventory due to the economic uncertainty that could erode cash generation (due to an increase in working capital requirements, among other things).

Disappointing H2 19, poor FY20 outlook

Disappointing full-year results after a 9m trading statement that had seemed encouraging. Adjusted operating profit came in short at £901m, however the adjusted EPS came in perfectly in line with the consensus. On the positive side, adjusted operating cash flow came in slightly above our expectations. However, despite a good level of cost reductions targeted for FY20 (c. £350m), the group expects the FY20 adjusted operating cash flow to be lower than in FY19 (£1.6-1.8bn versus FY19: £1.8bn). We

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 c

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.

Supreme (SUP LN) - Record performance, EBITDA ~doubled

Supreme’s FY24 trading update confirms a record performance in the 12 months to 31 March 2024. Organic revenue and profit growth across all four divisions has driven Group revenue +45% YOY to £225m, with FY24 adj. EBITDA almost doubling to ‘at least £38m’, driving record levels of cash generation. Supreme is actively exploring complementary M&A, supported by a debt free balance sheet. Trading on an undemanding FY25 PE of just 6.7x, with a 3.4% yield, we believe downside risks are more than price

Morning Note – 22 April 2024

Supreme+ (SUP, House Stock at 125p) - Supreme, Supreme!

Trading update highlights scale of growth

In a Trading Update for the twelve months to 31 March 2024 Supreme expects to report revenue of c.£225m, and (adj.) EBITDA of at least £38.0m, in line with market expectations, which had been revised upwards during the course of the year and represents almost double the FY23 level. The Group closed the year debt free. Our outlook highlights the extent to which Supreme has expanded, through both acquisition and organic growth during the period. From 2020 to 2024E the Group will have grown sales

SP Angel Spec Sits: FY Trading Update (LTHM)

Headlam Group - Strategy for growth in tougher market

Headlam Group has laid out an ambitious long-term revenue target of between £900m and £1bn, as it seeks to grow its share of the UK floor coverings distributor market. Despite a challenging backdrop due to the low level of residential housing transactions, management is seeking to expand each of its sales channels: Trade Counters, Larger Customers, Regional Distribution and Europe & Other. The FY23 results reflected the more challenging environment and the group trades at a discount to its long-

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

SP Angel Morning View: Copper prices hit $9,700/t as China smelts concentrates for zero charge Tc/Rc

LIBERUM: Ilika: CMD confirms operational progression

LIBERUM: Gattaca: Resilient contract performance, perm tough

LIBERUM: Severfield: Erratum: Better EPS and cashflow, and buyback

LIBERUM: CEO Video: Matt Wragg, Gattaca plc:

Hybridan Small Cap Feast - 22 April 2024

22nd April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

VSA Morning Flow Test 19/04/24 (Quadrise)

Quadrise (QED LN) has provided an update on its Utah project with Valkor. Valkor’s partner (Heavy Sweet Oil LLC) has received funding and approval to commence drilling enabling production of 20-40bopd of heavy sweet oil providing QED with samples for production of test scale quantities of MSAR and bioMSAR; the company’s key fuel decarbonising emulsion fuel products. This should derisk the commercial scale ramp up. QED management has highlighted that Valkor has not yet raised the minimum of US$

AUCTUS ON FRIDAY - 19/04/2024

AUCTUS PUBLICATIONS ________________________________________ Tethys Oil (TETY SS)C; target price of SEK100 per share: Increasing further the size of the prize/Considering Algeria – The South Lahan area on Block 58 is estimated to hold 55-523 mmbl prospective resources (P90-P10 case) with a mean case of 251.8 mmbbl prospective resources across six prospects in the Ara Carbonate. Combined with the previously disclosed prospective resources of the Fahd area in the north-eastern part of Block 58, Te