Latest news with #Centrica
Bloomberg
28-05-2025
- Business
- Bloomberg
Centrica Expands to New York With Build-Out of Gas Trading Unit
Centrica Plc is opening a trading office in New York that will underpin its growth in natural gas. Subsidiary Centrica Energy will establish its first US commodity-trading office aimed at building a physical gas business, Chief Executive Officer Chris O'Shea said in an interview. The sector is betting hundreds of billions of dollars that the fuel has a place in the world's energy mix through at least 2050.
Daily Mail
24-05-2025
- Business
- Daily Mail
US private equity giant KKR ready to inject £4bn into ailing Thames Water
Private equity behemoth KKR is prepared to control ailing utility Thames Water for a decade to repair the disgraced firm's fortunes and reputation. It is also understood that, as part of a rescue package being put together by Thames Water chairman Adrian Montague, New York-based KKR is preparing to pump £4 billion in equity and loans into the business. Britain's largest water company, which supplies 25 per cent of the country's water, is regarded as a national disgrace. It has an appalling pollution record and only avoided financial collapse by taking on a £3 billion emergency loan. KKR aims to inject Thames Water into an infrastructure fund, ending years of complex ownership that has seen billions of pounds flow overseas in dividends and interest payments. Thames Water's top brass found themselves in the headlines last week after it was revealed that executives could receive large bonuses under the rescue plan. But the group promised to 'pause' these payouts after the intervention of the Government following heated Parliamentary hearings. KKR has not been directly involved in the bonus row. But it is thought to believe that if executives are in charge of £20 billion of capital expenditure – and they make it 5 per cent more efficient – that's £1 billion, of which a bonus of £500,000 is a tiny proportion. Thames Water is also competing with other utilities such as National Grid and Centrica, owner of British Gas, to attract the best managers and thus needs to provide pay awards of a similar level. The private equity group hopes that by working around the clock with Thames Water, its debt holders and industry regulator Ofwat, it can put together a credible rescue package by the end of July. Most of the negotiations with the authorities have been conducted with Ofwat, which has agreed to a huge 30 per cent price increase in household bills, seen as necessary to meet investment targets. But stewardship of Thames Water is thought to be a bid by KKR to repair its own reputation too. The private equity group recognises it has an image problem dating back to its role in the infamous 1988 takeover of US food and tobacco group RJR Nabisco. Its goal at Thames Water is to improve service levels, its environmental impact and create sustainable cashflows. It also intends to eventually return the firm to the UK stock market. The private equity group is aiming to reduce borrowing at Thames and is pledging not to pay any dividends until the finances are repaired. Thames Water's borrowings stand at 88 per cent of its assets, which Ofwat considers unsustainably high.
Yahoo
24-05-2025
- Business
- Yahoo
Centrica plc's (LON:CNA) Stock Been Rising: Are Strong Financials Guiding The Market?
Centrica's (LON:CNA) stock is up by 9.3% over the past three months. Given that the market rewards strong financials in the long-term, we wonder if that is the case in this instance. Specifically, we decided to study Centrica's ROE in this article. ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In short, ROE shows the profit each dollar generates with respect to its shareholder investments. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. ROE can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Centrica is: 28% = UK£1.4b ÷ UK£4.8b (Based on the trailing twelve months to December 2024). The 'return' is the amount earned after tax over the last twelve months. Another way to think of that is that for every £1 worth of equity, the company was able to earn £0.28 in profit. View our latest analysis for Centrica Thus far, we have learned that ROE measures how efficiently a company is generating its profits. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. First thing first, we like that Centrica has an impressive ROE. Secondly, even when compared to the industry average of 12% the company's ROE is quite impressive. So, the substantial 50% net income growth seen by Centrica over the past five years isn't overly surprising. Next, on comparing with the industry net income growth, we found that Centrica's growth is quite high when compared to the industry average growth of 11% in the same period, which is great to see. Earnings growth is an important metric to consider when valuing a stock. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. Doing so will help them establish if the stock's future looks promising or ominous. If you're wondering about Centrica's's valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry. Centrica's ' three-year median payout ratio is on the lower side at 5.4% implying that it is retaining a higher percentage (95%) of its profits. So it seems like the management is reinvesting profits heavily to grow its business and this reflects in its earnings growth number. Additionally, Centrica has paid dividends over a period of at least ten years which means that the company is pretty serious about sharing its profits with shareholders. Looking at the current analyst consensus data, we can see that the company's future payout ratio is expected to rise to 47% over the next three years. Consequently, the higher expected payout ratio explains the decline in the company's expected ROE (to 16%) over the same period. Overall, we are quite pleased with Centrica's performance. Specifically, we like that the company is reinvesting a huge chunk of its profits at a high rate of return. This of course has caused the company to see substantial growth in its earnings. Having said that, on studying current analyst estimates, we were concerned to see that while the company has grown its earnings in the past, analysts expect its earnings to shrink in the future. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-05-2025
- Business
- Yahoo
SSE's share price rises a little after it reported flat earnings for 2025
Within the first hour of trading today (21 May), the SSE (LSE:SSE) share price was up just over 1% after investors digested the company's results for the year ended 31 March 2025 (FY25). The timing of the release of its numbers was unfortunate. At exactly the same time, the Office for National Statistics announced a bigger-than-expected increase in inflation. Higher energy prices was one of the reasons given for the surprise. And SSE shareholders appear to have benefitted from this. The energy group announced a 7% increase in its dividend to 64.2p. The stock's now yielding 3.5%, exactly the same as the FTSE 100 average. However, in FY23, it was 96.7p – a reminder that dividends are never guaranteed. But apart from the payout, most of the group's numbers were pretty flat. Indeed, adjusted earnings per share (EPS) were exactly the same in FY25 as in FY24. Measure FY23 FY24 FY25 Adjusted operating profit (£m) 2,529 2,426 2,419 Adjusted earnings per share (pence) 166.0 160.9 160.9 Dividends (pence) 96.7 60.0 64.2 With EPS of 160.9p, it means its price-to-earnings (P/E) ratio is now around 10.5. This is higher than that of, for example, Centrica (8.9), the other integrated energy provider in the Footsie. SSE claims that it has a 'clearly defined pathway' to delivering EPS of 175p-200p by FY27. At the top end of this range, the stock's P/E ratio falls to 8.5. Perhaps conscious of its large debt pile, the company — which claims to be at the heart of the clean energy transition — announced a £3bn reduction in its planned investment programme over the next five years. It says this reflects 'financial discipline in a changing macro environment across the energy businesses and consent phasing in networks'. In other words, there's increased uncertainty about the UK's energy policy. Ørsted recently cancelled plans for the Hornsea 4 offshore wind project. It blamed higher costs and increased 'execution risk'. SSE's debt is now equivalent to 3.2 times EBITDA (earnings before interest, tax, depreciation and amortisation). This time last year, it was three times. And despite the planned reduction in capital expenditure, the group's expecting this to rise to four. I think this is something to keep an eye on. SSE's unspectacular performance in FY25 is, in my opinion, the biggest single reason for owning the utility stock. The sector's defensive qualities can be attractive. During times of economic turbulence, utilities should keep ticking along paying a generous dividend, while other stocks are caught in the fall out. And I do think we live in uncertain times, meaning there's a strong case for considering shares in the sector. But despite SSE's undoubted strengths, I believe there are other better FTSE 100 utility stocks out there. Even after today's dividend hike, four others offer a higher yield. And based on its beta value (a measure of share price volatility) its the second most unstable. Stock 5-year beta value Dividend yield (%) Centrica 0.61 2.9 SSE 0.58 3.5 United Utilities Group 0.40 4.5 Severn Trent 0.35 4.3 National Grid 0.31 4.3 SSE's reported another solid set of numbers and has pledged to increase its dividend by 3.7%-5% in FY26. But there appears to be growing uncertainty surrounding large-scale renewable energy projects in the UK. Also, its growing debt — relative to earnings — remains a concern. For these reasons, despite its defensive qualities, I don't want to own the stock. The post SSE's share price rises a little after it reported flat earnings for 2025 appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool James Beard has no position in any of the shares mentioned. The Motley Fool UK has recommended National Grid Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
Reuters
21-05-2025
- Business
- Reuters
Ithaca Energy lifts annual production forecast after Cygnus field deal
May 21 (Reuters) - North Sea oil and gas company Ithaca Energy (ITH.L), opens new tab on Wednesday raised its full-year production forecast to reflect its increased stake in the Cygnus gas field. The company now expects full-year production of 109 to 119 thousand barrels of oil equivalent per day (kboe/d) from an earlier estimate of 105 to 115 kboe/d. Ithaca Energy acquired an additional 46.25% stake in the Cygnus, the largest UK Continental Shelf gas field and a key contributor to the UK's energy security, from Centrica (CNA.L), opens new tab on May 20. The Aberdeen-based company has significantly expanded its portfolio by buying stakes in several key oil and gas producing fields in recent years, with the acquisition of Eni's ( opens new tab UK assets in 2024 being the biggest till date. Ithaca reported a rise in first-quarter production to 127.4 kboe/d from 58.7 kboe/d a year earlier.
