Centrica Share Discussion Threads

[eeza] 19/2/2018 18:58

Well what's required from Conn is to address the problems.
Cutting the dividend without fixing the underlying problems will achieve Zero.
Too many legacy overheads to compete with the smaller & more efficient opposition.

[nortic 007] 19/2/2018 18:47

"you more"

[nortic 007] 19/2/2018 18:46

Couldn't disagree with more but good luck with that one.

[eeza] 19/2/2018 18:41

The yield is a function of both the level of dividend and the share price
If the share price doubles - the yield halves.
No-one complained of the dividend being too high when the share price was a lot higher.
The share price is where it is because of poor customer service & falling customer no's, amongst other things.
Address the problems and the yield will fall.

In the meantime I'll accept the Dividend in preference to Share Buy-backs.

[nortic 007] 19/2/2018 18:27

I think you'll find one of the main reasons why the share price has taken such a hit since his last statement back in November was because he showed such little backbone plus the fact that the market has been very sceptical about maintaining the dividend. He had his chance and he fluffed his lines.Let's hope this time he can grow a pair.

[nortic 007] 19/2/2018 18:22

Would you be happy if they yielded 18% this time next years........I wouldn't.A reduction in next years dividend would show some good leadership skills and is I believe already being priced in. It worked for Glencore and it could do the same for CNA.I would personally like to see the share rise but if your happy with your 9% yield don't grumble when the share price comes off. This about the long term.

[eeza] 19/2/2018 18:05

The shares are yielding 9% only because the share price has collapsed.
If the share price was 256 they would only yield 4.5%.

Buy-backs usually favour top management, which is why they like them.

Dividends go into your pocket, unlike share buy backs where the share price may be forced up but to get the Capital Gain from the share price rise you have to sell stock,or Subsequent adverse movements in the Market may then send the share price down and your ephemeral gain has disappeared.

I'll take dividends any day.

[whatsup32] 19/2/2018 17:25

Portside1

Totally agree with you re directors thinking of their own benefits rather then that of the company or the shareholders. Again paying out so much on dividend is ridiculous , now yielding over 9%. Pure madness . BUY THE SHARES BACK. For the long term benefit of the company.

[portside1] 19/2/2018 15:00

if conn had any brains he would of bought back 1.5b worth of shares or cut the debt to below 1,5b , paying out the cash in divs at share price under 130p is completely stupid use the low share price to act and restore the company for just one year ,

but if you look at why he as not is because the DIRECTORS LOSE OUT ON BONUSES

[whatsup32] 19/2/2018 13:55

Oil producers buying back shares. Source ADVFN Dow Jones news.

[capeview] 19/2/2018 13:07

Well, nice week away from the markets as did anything but. Seems not much has changed although there is a nice uptick in the price.

Was nice to just get away from the screen for a bit and do other things with the kids over the school holiday.

Other than that, back to the usual.

[eeza] 19/2/2018 11:04

"uSwitch said: “Energy customers are clearly impressed by the offerings from newer suppliers, but less enamoured with the larger and more established players.” Npower was 15th and bottom of the table with a rating of 65%, British Gas was in 14th place with 68%."

[gaffer73] 19/2/2018 10:24

Well there should be a post EOY statement in the results so we'll find out on Thursday

[whatsup32] 19/2/2018 09:13

gaffer ,
The price drop is due also to the previous profit warning, serious loss of domestic customers and profit fall state side . The question in investors mind is is the losses continuing

[gemlotte55] 19/2/2018 07:52

Further job cuts loom as British Gas feels the heat
Emily Gosden, Energy Editor
February 19 2018, 12:01am,
The Times
Energy
Iain Conn is under pressure from investors after stunning the City with a profit warning in November
Iain Conn is under pressure from investors after stunning the City with a profit warning in November
QILAI SHEN/GETTY IMAGES
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Iain Conn is preparing to unveil plans to slash costs at British Gas, raising fears of more job losses as he fights to shore up Centrica’s dividend.

The energy group’s chief executive is under pressure from investors after stunning the City with a profit warning in November that left analysts questioning the credibility of the company’s management.

Centrica is expected to report on Thursday that adjusted operating profits fell to £1.3 billion in 2017, from £1.5 billion the year before. Profits from its core British Gas household supply business also are likely to have fallen, analysts believe, with last year’s 12.5 per cent electricity price rise failing to offset the impact of mild weather and the loss of more than a million customers.

British Gas is Britain’s biggest household energy supplier, delivering gas to about a third of homes and electricity to more than a fifth. It also has a substantial boiler repair and services business. Centrica also boasts a supply business in the United States and retains stakes in an oil and gas business and in Britain’s nuclear plants.

Mr Conn has already cut 5,000 jobs and about £650 million from annual operating costs over the past two years, almost completing an efficiency drive that originally had been scheduled to run until 2020.


Despite the savings, analysts question whether Centrica will be able to cover its dividend next year if a proposed cap on standard energy tariffs squeezes its profits, as expected.

Deepa Venkateswaran, an analyst at Sanford C Bernstein, said that the imperative to cut costs was to “survive the price cap in 2019 . . . They are going to say something more about cost efficiencies, because they have finished their programme ahead of time.” Asked whether this was likely to involve job cuts, she said: “These things always do.”

John Musk, an analyst at RBC Capital Markets, said that the dividend would be maintained for now, but argued that it did not appear sustainable. “I don’t think Iain Conn can cut it again. They will maintain it and hope for an improvement in the future, though we think that is putting off the inevitable,” he said.

Mr Musk said that there was “emerging debate in the market” over the potential for Centrica to sell off its North American business and nuclear and oil stakes. He did not expect Mr Conn to take such radical action. “They need to be forced into doing something like that, whether in an M&A situation or by activist shareholders,” he said.

[gaffer73] 18/2/2018 22:59

So a £200m drop in profit vs a £5b drop in mcap.

[whatsup32] 18/2/2018 20:17

Nortic. Well spotted. I thought I was alone :)

[nortic 007] 18/2/2018 20:14

M & S has been doing it through The Sunday Times for years.

[whatsup32] 18/2/2018 20:02

I find articles in broadsheets that try to depict the results a week before the announcements to be fairly close to forecast.

[gaffer73] 18/2/2018 18:41

If the article is to be believed this should recover well next week. I think the deciding point will be the amount of customers that have or have not left.

[eeza] 18/2/2018 15:34

Realistic optimism, maybe.

[whatsup32] 18/2/2018 15:24

Andyg
Agreed , for some reason I think the worst is over and we should see some rebound this week.
Call me optimistic.

[gemlotte55] 18/2/2018 13:24

British Gas owner Centrica feels heat as profits slide
Liam Kelly
February 18 2018, 12:01am,
The Sunday Times
Centrica is expected to report profits of about £1.3bn, down from £1.5bn last year
Centrica is expected to report profits of about £1.3bn, down from £1.5bn last year
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The owner of British Gas is feeling the squeeze after raising energy prices and shedding British and American business customers last year.

Centrica, which owns Britain’s biggest household energy supplier, as well as oil and gas fields, will report profits of about £1.3bn, down from £1.5bn last year, analysts predict.

Profits at its North American arm could fall by as much as £140m for the full year after a slump in its business-to-business operations, amid tough competition and warmer than expected weather.


A profit warning last November stunned the market and sent shares in the FTSE 100 powerhouse tumbling to levels not seen since 2003.

Analysts at Morgan Stanley expect this year’s dividend to pay out 12p per share, but lowered the forecasts as they “assume a lacklustre rebound in 2018”.


The company also lost more than 1.2m domestic customers — more than 8% of its customer accounts — in the UK last year after raising standard electricity prices by 12.5%.

Chief executive Iain Conn has seen Centrica’s share price slide to 128.2p, with investors nursing losses of 45% in the past year.

Centrica, along with the rest of the big six energy suppliers, faces a tough time politically. The government is to introduce a price cap on energy bills for 11m households at the start of next year.

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[andyj] 18/2/2018 11:15

The problem I have with a 10% stop loss is, being an ex pat, my charges are very high, so a 10% stop loss equates to a 16% loss. Thats why I am returning to leveraging, allowing me to put the bulk of investments into safer places like selected preference shares.