Centrica Share Discussion Threads

[discodave4] 15/6/2019 13:44

ps Ofgem and the rest have to forecast what the cost of capital / Debt is likely to be in the future (5+ years) so they are never going to get it bang on, the CA are using historical data to identify their forecasts weren't always spot on........errr hello glass ball!.

[sarkasm] 15/6/2019 13:35

13 May 2019

Centrica plc ('the Company')

Full year guidance on operating cash flow and net debt maintained

Centrica's operational performance has been largely in line with the Company's expectations in the first four months of 2019. However, the trading environment has been challenging due to a specific set of external factors, with the expected negative impact from the UK default tariff cap (including the one-off GBP70m impact in the first quarter), warmer than normal weather and falling UK natural gas prices. We also experienced extensions to outages at the non-operated Dungeness B and Hunterston B nuclear power stations.

In response, Centrica continues to focus on those things it can control, including improving customer service and propositions, margin capture, driving cost programmes hard and maintaining financial discipline. In the year to date, the Company has made further good progress on cost efficiency delivery, continued to tightly control capital expenditure and completed the sale of the non-core Clockwork Home Services business in North America for $300m (GBP230m).

While a number of the factors leading to the challenging trading environment are temporary in nature, they will impact financial performance in the first half of 2019 and have also put some further pressure on the outlook for the full year. However, with cost efficiency delivery expected to accelerate in the second half of the year and a continued focus on capital discipline, Centrica is maintaining its full-year guidance on operating cash flow and net debt and continues to expect to achieve its 2019 Group targets of:

-- Adjusted operating cash flow in the GBP1.8-GBP2.0bn range.

-- In-year efficiency delivery of GBP250m.

-- Like-for-like headcount reduction of 1,500-2,000.

-- Group capital investment of around GBP1.0bn.

-- GBP500m of non-core divestments.

-- Net debt within the GBP3.0-GBP3.5bn range.

2019 financial performance remains subject to the usual variables of weather patterns, commodity prices and operational and commercial performance in the balance of the year.

Centrica is due to release its 2019 Interim Results on 30 July 2019. By this time, the Company will have additional clarity on the commodity price environment, UK energy supply market dynamics under the default tariff cap, the planned disposal of its interest in nuclear, the performance of the nuclear fleet and the outcome of its pensions triennial review. It will also have completed an assessment of future performance under a range of scenarios. Accordingly, alongside the Interim Results the Company will present a strategic update which will include reflections on the current business portfolio, updated future expectations for the customer-facing divisions and an update to the Group's financial framework.

Iain Conn, Centrica Group Chief Executive

"Although operational performance has been largely in line with our plans, external factors have presented challenges for Centrica during the first four months of 2019, in the form of the default tariff cap, warm weather, and falling gas prices. We have also experienced extensions to nuclear outages. However, we continue to focus on those things we can control and as a result we expect to achieve our 2019 cash flow and net debt targets, while we are making further progress on cost efficiency delivery and on demonstrating margin capture capability. We intend to provide a strategic update regarding our portfolio and prospects at the time of our Interim Results in July."

Operational performance update

-- Improved net promoter scores in Centrica Consumer and Centrica Business.

-- Total Centrica Consumer customer accounts down by 20,000 over the first four months of the year, with growth in North America, Ireland and Connected Home mostly offsetting a reduction of 234,000 customer accounts in UK Home energy supply. This includes the impact of a spike in customer churn in March and April following the announcement of a significant increase in the level of the default tariff cap. However, the number of customer accounts exposed to the new UK default tariff cap remained broadly flat over the period.

-- Relative to a strong first quarter of 2018, North America Business wholesale gas optimisation performance negatively impacted by warm weather in the first quarter. Power net margin delivered or under contract for 2019 higher than at the same point last year.

-- Distributed Energy & Power committed forward order book up 58% over the past 12 months. Gross revenue for the first four months of the year up 54%.

-- Connected Home gross revenue up 70% for the four months to the end of April compared to the same period in 2018.

-- E&P production from Spirit Energy and Rough slightly ahead of expectations in the first four months of the year. Drilling commenced on the Hurricane Energy-operated Warwick Deep well, the first in the three-well programme in the Greater Warwick Area.

-- Annualised efficiencies of GBP58m delivered to the end of April. On track to deliver GBP250m of efficiencies in 2019 with benefits expected to be weighted towards the second half of the year.

[discodave4] 15/6/2019 13:33

Hi maywillow,Saw that in the news a few weeks ago and from memory Ofgem (and other utility regulators) dismissed the methodology they had used to come up with their numbers. So basically, no impact IMO, if the regulator is challenged you will usually find that they are highly unlikely to accept that they themselves have got it wrong, not materially anyway.

[maywillow] 15/6/2019 13:24

came across the above

does it affect centrica

cheers

[maywillow] 15/6/2019 13:23

-Consumer charity Citizen's Advice has called on utility companies to pay compensation for excessive fees

--Citizen's Advice claims consumers overpaid GBP24 billion in the last fifteen years due to regulatory errors in setting price controls

--U.K. utility companies are currently facing increased regulation and the threat of renationalization under a potential Labour government



By Adam Clark



The U.K's under-pressure utilities companies face a fresh threat after consumer charity Citizen's Advice said they should pay compensation for billions of pounds worth of excessive bills due to errors by regulators.

Citizen's Advice said Thursday it had calculated water, energy, broadband and telephone networks overcharged customers a collective 24 billion pounds ($30 billion) over the last fifteen years because regulators made errors in setting price controls.

Forecasting errors over debt costs and investor risk led to GBP13 billion in overpayments in the water industry and GBP11 billion in the energy sector, according to Citizen's Advice.

"Companies need to play their part in putting this multi-billion pound blunder right. They must compensate customers where they have been paying over the odds. If they don't government needs to intervene," Gillian Guy, chief executive of Citizen's Advice, said.

British utility stocks are already being weighed down by increased regulation and the threat of renationalization. At the start of this year, energy regulator Ofgem brought in a price cap after the ruling Conservative government promised to tackle "rip-off" fees. Jeremy Corbyn, leader of the opposition Labour party, has said he would nationalize water, electricity and gas companies.

British regulators said they had already set out plans to cut consumer costs.

"While we do not agree with Citizens Advice's estimate of excess profits, we welcome their report and recommendations. We will continue to work closely with them and wider stakeholders to apply lessons learnt from previous price controls for the next price control period. Our plans include the lowest ever returns for investors in energy networks which would cut costs for consumers by GBP6 billion," Ofgem said.

Water regulator Ofwat also said it welcomed the report and it has made changes to the way it sets the cost of capital.

"As we set the price review for the five years from 2020 we expect to see prices continue to fall before inflation and a step change in performance for customers and the environment," Ofwat said.



Write to Adam Clark at [e-mail]; @AdamDowJones



(END) Dow Jones Newswires

May 30, 2019 05:41 ET (09:41 GMT)

[discodave4] 15/6/2019 13:20

Yeah, complete and utter sad losers, why would anyone set up a post alert and spend all day pressing a thumbs down on any postings just because you don't have the mental capacity or intelligence to accept that not everybody thinks the same way..........unbelievable, they both (mentioning no names!) need psychological help.Anyway, thanks and have a good one too, this cold snap has to be a positive for CNA but 1/52 above average usage is hardly going to turn things IMVHO.

[waldron] 15/6/2019 12:59

chuckle

those idiots seem to have it in for you dd4 no matter what you post

i wouldnt mind but nobody contributes more info to help decide whether to hold,sell or buy than you

carry on posting and have a great weekend

calm before the storm here
orange alert

[discodave4] 15/6/2019 12:39

Thanks Waldron. Given they only planned to contribute £98m for 2019 and that's now £173m (if I've interpreted it correctly) then it doesn't sound like it's going very well to me. The deficit was £1.2bn which they planned to clear by 2030.

[waldron] 15/6/2019 12:31

3) The triennial pension review is already ongoing and thus far they have already had to contribute an additional £75m (January) with a further £98m still to be paid in 2019. So it doesn’t look good in terms of their planned deficit payments.

I do believe they have made much headway

lets hope their pension investment portfolio takes off in the second half

[discodave4] 15/6/2019 12:28

Commodity price? not had chance to look, no doubt someone else could post up some info / views?.

[discodave4] 15/6/2019 12:27

Any thoughts on H1 results?In the trading update in !ay they stated:"Centrica is due to release its 2019 Interim Results on 30 July 2019. By this time, the Company will have additional clarity on the commodity price environment, UK energy supply market dynamics under the default tariff cap, the planned disposal of its interest in nuclear, the performance of the nuclear fleet and the outcome of its pensions triennial review."For the last three items (IMO):-1) Default tariff cap. They already stated that there was a £70m hit to Q1 operating profit due to the cap being below their SVT rate. But the cap was increased in April so they will reduce the potential reduction in profit for H1. Quick calcs and I reckon, assuming customer numbers haven't declined further, that operating profit could be marginally higher but not by much (c£10m). Could be way out as will obviously depend on customer numbers.2) Guess there will be no material news on the disposal of nuclear, just a lot of the usual BOD waffle about having had some interest etc etc. They will not offload within a year, if at all IMO. Anymore down time and delays?, who knows!.3) The triennial pension review is already ongoing and thus far they have already had to contribute an additional £75m (January) with a further £98m still to be paid in 2019. So it doesn't look good in terms of their planned deficit payments.Another item IMO that will set the seen for the year is their efficiency targets. IMO if H1 cost reductions are less than about £90m then they are unlikely to achieve their £250m savings for 2019. With this cold snap it will be interesting to see if they issue a profit warning or not. As for the div cut, think that's a given anyway.

[nortic 007] 15/6/2019 11:07

Please stop making a prat of yourself DikuStick to the subject matter and I'm still awaiting your views on CNA from the other day ?Isn't strange how you and DD have suddenly got an uptick frenzy !!Lots of dummy accounts me think !! .)

[diku] 15/6/2019 10:08

The wise have spoken...but not a lot of substance...don't forget to pay your sub money to ADVFN then we go for a ride...



Nortic 00714 Jun '19 - 19:15 - 19551 of 19580
0 4 1
Sentiment is key in my opinion. If that changes then everything changes!!

[adrian j boris] 15/6/2019 07:43

Nortic 007
15 Jun '19 - 07:41 - 19578 of 19578
0 0 0
Shell ‘overcharged’ thousands of its gas and electricity customers

[nortic 007] 15/6/2019 07:41

Shell 'overcharged' thousands of its gas and electricity customershttp://www.thetimes.co.uk/article/55fafc6e-8eb1-11e9-afbe-8bab2c71e5a4

[nortic 007] 14/6/2019 23:29

Hilarious DD !!Funny upticks all round !!To obvious my friend!!

[discodave4] 14/6/2019 22:45

Thanks.Seems like there's always two sides to the hydrogen debate........like investing.........and life in general :)

[grupo] 14/6/2019 22:44

DiscoDave4
14 Jun '19 - 22:42 - 19574 of 19574
0 1 1

[discodave4] 14/6/2019 22:42

Https://eandt.theiet.org/content/articles/2019/06/iet-warns-of-uncertainties-for-re-purposing-uk-gas-network-for-hydrogen-use/

[nortic 007] 14/6/2019 22:30

You've just contradicted yourself DD !!!

[discodave4] 14/6/2019 22:26

PanderYou criticised a poster for putting up some fundamentals, you started the debate but when challenged have resorted to getting all defensive and offensive........like a lot on this thread.Tbh it's clear you invest based on conviction, fine and good luck with that but why criticise others for adopting a different approach.In a years time this could be worth about 110-115 top end, if earnings continue to decline then 70-80, take your pick.Good luck.

[pander45] 14/6/2019 22:22

Its a landslide and Boris will wipe the floor with Corbyn in a GE.

[pander45] 14/6/2019 22:21

Big buyer in background here. Capitalising in share price. DYOR.