Serica Energy Share Discussion Threads

[theinquisitiveone] 10/5/2024 16:38

Hi

Can anyone tell me if SQZ qualify for Business Property Relief(BPR) against Imhetitance Tax because of their AIM listing?

Thanks

[undervaluedassets] 09/5/2024 16:23

Yup.. Investors are pretty stupid really aren't they.. Especlally on AIM,

Valuations roughly match operating profits on the FTSE 100 by rank ... Roughly that is.

[weemonkey] 09/5/2024 16:19

Here is something interesting to chew on

SQZ is the 2nd most profitable company (proper profits that is ..operating profits) on the AIM100.

JET2 is at number 1

And even after the outlandish 75% tax take SQZ is in 4th position by profitability on the AIM 100 table

yet it ranks 22nd by valuation on the AIM100.

You could not make it up really could you..

[wallywoo] 09/5/2024 15:50

Highest daily volume for 2 years so far today. Should spark some interest here, imho

[nigelpm] 09/5/2024 15:21

I still think there will be consolidation in the sector - tie up ITH, ENQ, SQZ and then HBR swallows the lot up. Combine all the tax losses and someone makes a fortune.

[hunter154] 09/5/2024 14:46

EBITDA multiple below 2 for 2023. Fy24 forecast £514m on sharepad. Todays mcap £694m.
Yes tax is high but fcf for 2024 is £125m.

If you cant see the value here then go and buy NVIDIA.

[steelwatch] 09/5/2024 13:36

Don't follow Serica much these days, but, just checking on wherabouts of a jack-up rig expected Q2/Q3 for a Southern North Sea exploration well I'm interested in and find it is currently working at Erskine. Probably a workover of some sort.



edit: extract from the operator's Annual Report 30/04/24 - "Production efficiency from the Erskine field averaged 76%, (excluding planned TAR losses), as a result of an extended shutdown on the host Lomond platform which provides fluid processing and an export route. A MODU-based intervention is scheduled for 2024 to reinstate production from the W1 well in 2024".

[stemis] 09/5/2024 12:55

Also ignoring tailwind tax losses etc.

Why would you ignore tax losses?

[swanvesta] 09/5/2024 12:38

And surely decom will be paid from pre-tax cash flow, not from post-tax income?

[mickinvest] 09/5/2024 12:17

"IF they can get around £300m pre-tax profit..."


Serious answers only please seeing Labour have not suggested lowering the offset to zero!

[loglorry1] 09/5/2024 11:58

"IF they can get around £300m pre-tax profit..."

Let's assume they can and they pay a full 78% tax rate on it after labour changes and they can't offset investment. Also ignoring tailwind tax losses etc.

That's 66m post tax which seems pretty rubbish given the market cap and the decomm remaining to pay for.

If the UK Gov has decided to wind up the North Sea and focus on renewables as it seems then I don't see much future here. And yes I am a shareholder.

[croasdalelfc] 09/5/2024 11:23

3m transfer or sell?

[undervaluedassets] 09/5/2024 11:22

Well they like the Harbour results.. which is kind of in the same boat as us...

You would think that we would see a read across as we are ploughing the same furrow as twere.

Their directors have been buying (as have ours of course).

Meanwhile.. It is the private investor who - it seems to me - has his tail between his legs about north sea gas.. especially on this board.

[nigelpm] 09/5/2024 08:09

Looks like it Croas - that's exactly why you have a buyback in place.

[croasdalelfc] 09/5/2024 07:07

Is someone offloading into the buyback - 381000 bought yesterday in one transaction . There have been several at 100k over the last few days

[mickinvest] 08/5/2024 16:14

IF they can get around £300m pre-tax profit, the question is what tax they will pay on that taking into account an estimated capex of £180m and Tailwind tax losses?

They'll probably need gas price to bump into at least 80p average and oil $80+ before hedges but I'd guess EPS will be far higher than the 29p in recent results. It would also see net cash increasing again with the lower taxation. You then have the bogeyman of Sir Keir threatening to reduce the capex tax deduction going forward so difficult to make forward projections but would be good to see someone give it a go?

[return_of_the_apeman] 08/5/2024 14:59

What are these "lots of investors" reasons for thinking this is a value trap?

SQZ paid out 23p in dividends during 2023 which were covered 3.27 times, what do you think the coverage is forecast to be this year?

Tia

[wallywoo] 08/5/2024 11:35

With such a high dividend (14p around 7% of the share price), it makes sense to buy as many shares as possible before these go XD on the 27th June. A £15m buyback and a average share price of 190p, works out about right at an average 200k shares a day. It's interesting to guess what the share price will be once this goes XD. Lots in investors currently thinking this is a value trap.

[bountyhunter] 08/5/2024 07:39

on 7 May 2024, it purchased 381,119 ordinary shares

not so small with shares being repurchased daily

I guess there are some parameters being applied to the repurchased shares behind the varying amounts.

[sawney] 08/5/2024 07:21

So looking at today's RNS...why are they buying in such small random amounts...?

[mrscruff] 07/5/2024 20:57

The answer is to cut the dividend to provide a buffer for M&A and buybacks. The windfall TAX is forever and we and the company need to adjust to this environment.

[bountyhunter] 07/5/2024 19:01

78% but that would be factored into the sale price and as you say Norway has political stability.

[thedudie] 07/5/2024 15:33

Kibes - that is a bit my feeling as well but I am no expert!
There are some advantages to Norway but they aren't transformational imo.

As I understand it the capital allowances act more immediately so 78% is refunded pretty much immediately in the current accounting period. On the flip side the capital allowances are higher here. The current allowances here will of course be cut once Labour are in power - maybe by removal of the unjustified( to Labour!) EPL tax break who knows maybe back to 40% ie well below the Norwegian model.

By far the biggest advantages would be stability - Hasn't been negative changes in Norway for 30 years apparently.

During Covid they were supportive encouraging companies to invest - any projects sanctioned between 2020 and up to end of 2023 seem to enjoy continued enhanced capital allowances now up to production start. So buying assets with recent sanction would be highly effective.

Other than that you only have to look at Acker BP and VAR ENERGI results to see the effect of their taxation. Var 2023 results give a flavour - 6.8B USD in revenue, giving 3.5B USD Op Profit which results in a 2.7B USD Tax payment and a Post tax profit of 610million USD.

All subject to correction etc...

[kibes] 07/5/2024 13:01

Tax rate at 75% in the UK is too high. So the answer must be to buy assets in Norway, where the tax rate is 78%? I don't get it.