Any thoughts on the company?


Red line 200 MA

24 Mar 2015 "Deutsche Bank cuts Centrica to 'sell' from 'hold', target cut from 280p to 225p"

Exane BNP Paribas Neutral 226.35 240.00 250.00 Reiterates

Macquarie Neutral 196.85 280.00 220.00 Downgrades

With so much adverse sentiment towards CNA I wonder are they ripe for sp appreciation? XD (8p) soon. Toying with either VOD or BT.A, decisions, decisions.

XD 11th May. I'm prepared to wait for sp to rise whilst taking 6% divi, so bought in.

.HOUSTON, May 4, 2017 /PRNewswire/ -- Centrica plc, parent company of Direct Energy®, one of North America's largest retail providers of electricity, natural gas, and home and business energy-related services, today announced the acquisition of the assets of Rokitt Inc. and their proprietary Rokitt Astra Technology. Rokitt is a technology company based in New Jersey.

20 years of CNA.......no idea which way the next movement is going to be!

StockMarketWire.com
Centrica is on track to achieve its targets and is making good operational progress, building on the momentum generated in 2016, shareholders at the annual general meeting will be told today.

An update issued ahead of the meeting said that operating performance in the year to date had been largely as expected with most operational inputs and parameters in line with plan.

It said that as part of this, Centrica continued to make good progress on its cost efficiency programme.

However, warmer than normal weather in the year to date had resulted in lower than planned consumption in the UK and North America, while UK wholesale oil, gas and baseload power prices had all fallen since Centrica's preliminary results in February.

Centrica said it would continue to focus on driving underlying performance improvement and cost efficiencies to help mitigate the negative impact of these changes in the external environment.

It said: "In addition, we announced in April that the Rough gas storage asset would be unavailable for injection during the 2017/18 storage year

"Overall, the company is on track to achieve the 2017 targets set out in its preliminary results announcement."

It said adjusted operating cash flow was expected to be above £2bn.

Group capital investment, including small acquisitions of less than £100m each, was expected to be no more than £1bn, including E&P capex of around £500m.

- Incremental revenue investment of around £100m in growth areas.

- Efficiency savings of £250m expected in addition to 2016 savings of £384m, as part of the Group's £750m per annum cost efficiency programme.

- Like-for-like direct headcount reduction of around 1,500 expected during the year.

- Closing net debt was expected to be in the £2.5-£3.0bn range. It said the 2017 financial performance remained subject to the usual variables of commodity prices, weather and asset performance over the balance of the year and the impact of an uncertain competitive and regulatory environment for the UK energy supply business.

Group chief executive Iain Conn said: "We continue to make good progress in implementing our customer-facing strategy, building on the underlying momentum we had as we entered 2017.

"Customer service is improving, we have launched new offers delivering choice for customers and rewarding loyalty and we continue to develop our technology capabilities.

"We remain on track to deliver against our 2017 targets."

In other words we're still useless );-

Warm weather is to blame, Stan. It's either too hot or too cold, too wet or too dry!!! ;o)

RBC today:
"Overall CNA states it is on track to hit main headline guidance for 2017 including operating cash flow of above £2bn, capex of no more than £1bn, efficiency savings of £250m and net debt at year end in the £2.5-£3.0bn range.

So what? CNA is among the worst performers in the sector YTD with political headwinds hampering share price performance. Despite CNA stating it is in constructive dialogue with the government around intervention, we continue to see this area as a major overhang. Today’s trading update then reads as a small incremental negative and despite significant upside potential opening up to our Price Target, we would continue to avoid the name until there is better visibility on the competitive retail environment in the UK."

Sadly can't argue with that.

Ex-Divi 11th May, like the chart went long on the spreads 9.56 @ 198.37 initial target 232p to close gap, stop 189p

I went long last week @198 - a bit early, but now in the money.

Fingers crossed we both got the entry right skinny, per chance to dream :0)

Likewise, and with a 6% yield I'm happy to wait for the sp, (also in the money from 196.6p)

What's the downside, regulatory, market weakness and competition

If you wait for better visibility as suggested by RBS (above) then the price you pay for them will be higher

Just when you think you've got it sussed along comes a downer, this time it's regulatory when the Tories get back in.

Not unexpected but the energy co's have been ripping us off for years and they (Tories) have done diddly squat about it for 7 years.

May faces backlash over energy price cap
Price freeze will cut investment, warns industry:-
Theresa May will press ahead today with a promise to cap energy prices for 17 million households despite warnings that the move could force up bills for other customers.

The Conservative general election manifesto will include a pledge to regulate the maximum costs of standard variable tariffs, the default deals for the two thirds of customers who have not sought cheaper alternatives. The prime minister said that she expected the price cap to save families on poor-value tariffs as much as £100 a year.

Introducing a cash limit is the most radical of options that had been under consideration by the government. It is arguably the most significant intervention in the market since privatisation.

Energy companies, which are lobbying against a cap, have claimed that the move would kill competition, deter investment and endanger jobs. They are expected to try to protect their profits by scrapping cut-price deals, which can be hundreds of pounds a year cheaper, so forcing up bills for savvy customers.

Senior Conservatives, including Lord Lawson of Blaby, the former chancellor, have voiced their opposition, with some in government privately pressing for watered-down reforms.
City analysts say that a price cap could cut hundreds of millions of pounds a year from the profits of Centrica and SSE, Britain’s two biggest energy companies, jeopardising their dividend payments to pension funds and individual shareholders.

The prime minister committed herself to “capping energy prices to support working families” on a campaign visit in London yesterday, saying it was in the national interest.

Details of the pledge will be announced today by Greg Clark, the business secretary, who will make it clear that the prime minister is determined to pursue the more aggressively interventionist stance outlined in her speech to the Tory party conference. “It’s just not right that two thirds of energy customers are stuck on the most expensive tariffs,” she said then, as she promised to tackle “dysfunctional” markets.

Last night Tory campaign sources were braced for claims that Mrs May’s policy is all but identical to an energy price freeze proposed by Ed Miliband, then the Labour leader, in 2013. One said: “This will promote competition but prevent exploitation. Ed Miliband’s proposal would have wiped out all competition overnight.” At the time Mr Miliband’s proposal was strongly criticised by senior Tories.

The proposed Conservative cap would be set by Ofgem, the energy regulator, which would determine the maximum prices that companies could charge for gas and electricity. The measure is expected to lead to initial price reductions for most households. A similar cap was introduced this year for the four million households with prepayment meters, which Ofgem estimated would save most households £80 a year on gas bills. The cap would be reviewed every six months which means that, unlike under Mr Miliband’s plan, prices could rise as well as fall.

The Tories are said to be willing to risk the government, rather than energy companies, being held responsible for price rises.

Mr Clark will say: “We will act on our commitment to intervene when the energy market fails to treat people in a fair and reasonable manner. A recent investigation found that families are paying £1.4 billion more than they should in energy bills.

“And in the last few months, five of the largest energy suppliers have announced increases to their already poor-value standard tariffs. This clearly isn’t fair and reasonable and we are going to put it right.”

Speaking to the BBC this morning, Mr Clark said: “It shouldn’t be necessary to have to switch suppliers, to go through the fuss, simply to avoid being ripped off.”

Some Tory MPs and Policy Exchange, the think tank, had been pushing for the less radical option of a “relative” cap on the difference between the cheapest and most expensive tariffs.

Centrica, owner of British Gas, railed against the proposed cap. Iain Conn, the chief executive, said: “We believe that price regulation will result in reduced competition and choice, stifle innovation and potentially impact customer service.”

Centrica’s share price has fallen by 15 per cent since the start of the year. Mr Conn said that government policies such as renewable energy subsidies were the main cause of rising prices.

Lawrence Slade, chief executive of the trade association Energy UK, said the cap would threaten innovation, adding that customers save “much, much more” by shopping around than they would from the government’s plan.

Rebecca Long-Bailey, the shadow energy secretary, said: “When the Tories say they’ll cap bills, the question they need to answer is whether they can guarantee bills won’t go up for people next year — that’s the real test.”

What they said: Tory attacks on Ed Miliband’s price cap

Michael Fallon “We have not seen intervention in industry on a scale like this since the 1970s when they tried to control the price of bread.”

David Cameron “He wants to live in some sort of Marxist universe in which it is possible to control all these things.”

George Osborne “Companies will jack up the prices before the freeze, so in the short term prices go up. Companies will not invest in this country to build the power stations we need, so in the long term prices go up.”

Boris Johnson “Miliband says he will imitate the catastrophic policies of the emperor Diocletian, by imposing a price freeze on energy bills for the 20 months succeeding the election.”

LATEST BROKER VIEWS

Date Broker New target Recomm.
9 May Goldman Sachs 194.00 Sell
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8 May Kepler... 190.00 Reduce
5 May Deutsche Bank 180.00 Sell
4 May Citigroup 178.00 Sell
26 Apr Goldman Sachs 194.00 Sell
21 Apr Macquarie 220.00 Neutral
30 Mar Exane BNP... 210.00 Neutral
20 Mar Exane BNP... 250.00 Neutral
17 Mar Jefferies... 190.00 Underperform

Cap does not mean an end to dividends, promises Centrica
Emily Gosden, Energy Editor
May 9 2017, 12:01am,
The Times

Centrica has sought to reassure shareholders that its dividend can withstand a price cap, even as it launched a last-ditch appeal against the policy.

The owner of British Gas also reported a further drop in customer numbers and warned that milder weather meant that households had been using less energy than expected.

Analysts have warned that a price cap along the lines proposed by the Conservatives could cost Britain’s biggest energy supplier hundreds of millions of pounds a year and threaten its payout to investors.

Centrica, which has lobbied strongly against the proposal, said: “Our focus on competitive pricing, cost efficiency, improved service levels, rewarding loyalty and delivering propositions that customers want should leave us competitively well positioned in order to deal with whatever form of market change is ultimately enacted.”

Speaking on the sidelines of Centrica’s annual meeting, Iain Conn, chief executive, said: “The balance sheet is much more resilient, the company can withstand lots of different things.”
Earlier he told shareholders that “all things being equal” the company expected to be able to resume raising its dividend if net debt fell to target levels as planned later this year.

Asked whether the dividend was safe even in the event of a price cap, Mr Conn said: “We are very happy with our dividend policy. Our sources of cashflow exceed our uses of cashflow. We therefore have a cash buffer to play with.


“There are many other things we can do with our own capital deployment and our own efficiency. We recognise that our shareholders care about the dividend a lot.”

Mr Conn, already in the process of cutting 6,000 jobs at Centrica, did not rule out making further job reductions to trim costs if it needed.

Speaking before details of the proposed cap emerged, Mr Conn also continued to campaign strongly against the proposal. He said that the company had held “constructive” dialogue with government, in which it had “proposed alternative ways to improve the market further and address their concerns without resorting to price regulation”.

He told shareholders: “We believe that price regulation will result in reduced competition and choice, stifle innovation and potentially impact customer service.”

Centrica also tried to shrug off the loss of 261,000 customer accounts since the start of the year, saying that it reflected one-off collective switch tariffs coming to an end. British Gas is no longer offering heavily discounted deals to win new customers. Mr Conn said that it would “rather lose customers than start acquiring customers at negative economics”.

He said that the company was making good progress and was on track to deliver its 2017 targets, which include cutting staff numbers by 1,500 this year.

However, it warned that “warmer than normal weather in the year to date has resulted in lower than planned consumption in the UK and North America” and that “UK wholesale oil, gas and baseload power prices have all fallen” since its 2016 results were announced in February. British Gas is the only one of the six big suppliers not to have raised its standard variable tariff prices this year. The company has promised to freeze them until August.

Centrica’s shares have fallen by about 15 per cent since the start of the year amid fears over the impact of regulation.

John Musk, analyst at RBC Capital Markets, said: “Centrica is among the worst performers in the sector [for the] year to date, with political headwinds hampering share price performance. Despite Centrica stating it is in constructive dialogue with the government around intervention, we continue to see this area as a major overhang.”