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"

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
9 May Beaufort... N/A Buy
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.”

Out the spreads @ 204.35. Ex-Divi tomorrow see what happens.

JP Morgan Cazenove Underweight 191.15 265.00 180.00 Downgrades

More to add to the JPM downgrade above:
"Despite the strength of CNA’s UK supply operations, two issues that have recently arisen deeply concern us. Firstly, we see significant downside emerging through price regulation of CNA’s core ‘Standard Variable Tariff’ (SVT) customer base. Our initial view of the damage to EPS was negative, but manageable at -10% to -20% (see here). Yet our analysis of Ofgem’s regulated prepayment meter (PPM) tariffs – the main focus of this report – points to a deeper EPS erosion at up to -42%. Secondly, we see evidence of a price war emerging, with incumbent generation owner ENGIE entering the residential supply market with heavily discounted residential tariffs. Having lost customers in Q1 (at an annualised rate of 7.5%), CNA has already been forced to respond with heavily discounted offers via its Sainsbury’s brand. We are downgrading CNA from OW to UW with a Dec-17 PT of 180p (265p).
· SVT caps cut more deeply than first thought – While the reintroduction of price regulation after a 15-year period of liberalisation was a surprise to us, UK prepayment meter (PPM) regulation introduced earlier this year provides a body of regulatory data on which to accurately model its impact. We have undertaken a full review of Ofgem’s PPM tariff materials, which has alarming implications for CNA’s supply margins. For instance, if regulated price caps were in place in 2016 we estimate that dual fuel bills would have been a full £100/cust lower on average for the Big 6.
· Price war on the horizon? – Warning bells will have started to ring for the Big 6 on the news that Engie has cut its UK dual fuel offering to less than £900 last month. CNA (-£160/cust), e.on (-£70/cust) and npower (-£73/cust) have responded with tariff reductions. All eyes are now on SSE, Scottish and EDF, who elected to lift fixed tariffs by £140, £90 and £50, respectively.
· Downgrading estimates – Based on our PPM tariff analysis, SVT price regulation could reduce CNA’s margins by up to ~£90/cust after normalising for wholesale fuel costs, significantly more than our prior projections. Our revised earnings forecasts include a £50/cust reduction in SVT margins (~£300m at EBIT) which is the main factor behind our EPS downgrades of 26% and 31% in FY18 and FY19, respectively.

Just reopened the S/B that I closed yesterday @190.1p - gaining 4p on the ex-dividend.

Did the results come out today, I can't find them

Money am hard this in the daily summary

"British Gas owner Centrica (CNA) reported full year pre-tax profit nearly doubled from £593.3m in 2015/16 to £1.78bn. A reminder of the challenges it faced dragged the shares failed to unnerve investors at the stock was relatively unmoved at 193.6p."

Is this a mistake!?

See post 578.

I don't know what moneyam are up to then
You can't rely on anything you read

StockMarketWire.com
The CQ Energy Canada Partnership - the Canadian E&P joint venture in which Centrica owns a 60% interest - is to be sold to a consortium comprising MIE Holdings Corporation, The Can-China Global Resource Fund and Mercuria for C$722m in cash.

Centrica said its net share of sale proceeds was expected to be approximately £240 million after adjustments.

Centrica said that in line with its strategy announced in July 2015, the divestment meant its E&P activity would now be focused solely on European assets, with the group having completed the sale of its gas assets in Trinidad and Tobago in May 2017.

Deutsche Bank Sell 203.05 160.00 160.00 Reiterates

StockMarketWire.com
Centrica and Stadtwerke Munchen GmbH have reached an agreement to combine Centrica's European oil and gas exploration and production business with Bayerngas Norge AS to form a newly incorporated joint venture and create a leading independent European E&P company.

Centrica will own 69% and Bayerngas Norge's existing shareholders, led by SWM and Bayerngas GmbH, will own 31%.

The effective date of the transaction is 1 January 2017 and it is expected to close in the fourth quarter of 2017, subject to competition and regulatory approvals and other conditions.