Centrica Interim results.

[idpickering]

FIRST HALF RESULTS AND OUTLOOK

· A challenging environment in H1 2019 impacted adjusted earnings and adjusted operating cash flow.

· Overall growth in Centrica Consumer customer accounts of 314,000. UK Home accounts down 38,000 with energy supply accounts down 178,000, but with growth in May and June. UK services accounts up 140,000.

· 2019 full year adjusted earnings expected to be weighted towards H2, providing momentum into 2020.

· Continue to expect to meet 2019 full year Group financial targets, including adjusted operating cash flow in the range £1.8bn-£2.0bn and net debt in the range £3.0bn-£3.5bn.

https://www.investegate.co.uk/centrica- ... 00151134H/

[Dod101]

I have been out of Centrica for a long while I am happy to say.

Dod

[idpickering]

Further to the results;

Iain Conn, Group Chief Executive Officer, to step down from Centrica.

Centrica plc (the 'Company') announces that Iain Conn, Group Chief Executive Officer, has agreed with the Board that he will step down as CEO and retire from the Board next year.

Today's Strategic Update announcements mark an important moment in our transformation and we are now moving into a new phase, ready to exit our E&P businesses and fully committed to becoming a simpler and more focussed, cost competitive customer facing business.

Iain will continue as CEO to drive the repositioning of the company's portfolio and improve underlying performance as it continues to gain momentum. We anticipate that he will remain with the Company at least until the 2020 Annual General Meeting and provide his full support to help with the transition. The Board will plan succession accordingly and provide updates in due course.

https://www.investegate.co.uk/centrica- ... 01041565H/

[idpickering]

I have been out of Centrica for a long while I am happy to say.

Dod

Same here Dod. An unreliable HYP share at best, and I have no intention of buying back into it.

Ian.

[Arborbridge]

I sold out - far, far too late! I regret to say I'd been suckered into this one over the years - win some and lose some.

It was a difficult decision which went against my HYP regime, but I decided to cut my political as well as business risk for this case.

Arb.

[NeilW]

Dividend progression will be off the 2019 expected level of 5.0p per share, which has been rebased to reflect the current environment including the impact of the UK default tariff cap, and additional pension deficit contributions following the conclusion of the triennial valuation. The 2019 interim dividend will be 1.5p per share, 30% of the expected 2019 full year dividend.

Corporate BS translator: "rebase" = "cut"

[IanTHughes]

Dividend Details

https://www.investegate.co.uk/centrica- ... 00151134H/

However, changed circumstances, including the implementation of the default tariff cap in the UK, additional pension deficit contributions and exceptional payments mean we will re-set the 2019 full year expected dividend to 5.0p per share. Beyond this, our policy will be to deliver a progressive dividend over time, linked to earnings and operating cash flow growth, and with a targeted range of cover from earnings of 1.5-2.0 times over the medium term.
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An interim dividend of 1.5p per share will be paid on 21 November 2019 to shareholders on the register on 11 October 2019

Ian

[idpickering]

Thank you Ian. I couldn't find that earlier. CNA down 11% on market opening.

Ian.

[Quint]

I have been out of Centrica for a long while I am happy to say.

Dod

Me too thank heaven.

[monabri]

Anyone surprised? The only surprise for me was that Conn kept his job for so long!

[IanTHughes]

I do not hold Centrica PLC (CNA) mainly because, when I commenced my HYP in 2012, SSE PLC (SSE) was the preferred option in energy supply and Royal Dutch Shell (RDSB) the preferred option in Oil and Gas productions, both choices most probably had better yields than CNA.

The one line that so far intrigues me in this morning’s report is:

Today's Strategic Update announcements mark an important moment in our transformation and we are now moving into a new phase, ready to exit our E&P businesses and fully committed to becoming a simpler and more focussed, cost competitive customer facing business.

Does that mean they are regressing back to what was British Gas PLC (BG) with Dyno-Rod tacked on for good measure?

https://en.wikipedia.org/wiki/Centrica

Centrica then acquired Dyno-Rod in October 2004

Ian

[Julian]

There was a thread a month or two back on dumping Centrica and here many of us are, back again, and breathing a sigh of relief about action taken in the past to dump it, or having never held it in the first place. I did dump my entire holding earlier this year and am so glad that I did. Yes, maybe I left it too late as well, but I choose to be glass-half-full on that in that (a) at least I'm not sitting here this morning reading these results with dismay and (b) it realised some capital losses this tax year that I can make use of later this tax year to make further portfolio changes that will involve some capital gains.

Commiserations to anyone who is still stuck on the CNA train(wreck).

- Julian

[Gengulphus]

A general reply to several posts in the thread: at least on this board, I don't really see the point in posts that just say that the poster sold (or indeed bought) a particular share in the past and is pleased (or indeed displeased) that they did, without giving the reasons why they did and preferably saying something about the extent to which those reasons still apply. Does such a post help me decide what practical decision to make now? No - both the company and the share price have changed since then, so whatever the reasons were, whether they still apply may have changed - and in addition, even if they haven't changed, they might not be reasons I consider important. If the reasons are given, I can decide how relevant I think they are to my decision and if I agree that they're reasonably relevant, I can look to see whether they still apply to the company - though obviously if the poster does that, it can save many readers the trouble. If they're not, for all I know the reason might have been something I would regard as totally irrelevant even at the time the poster sold - as an extreme silly example, the poster's horoscope that day might have said that it was time to strike out for pastures new and they interpreted that as indicating that they should change some of the shares in their HYP... ;-) Or as a much less extreme, more realistic example, they might have decided to sell on the basis of then-recent price falls or then-high shorting levels, both of which could easily have changed in the intervening period - and both of which I would not have paid attention to even at the time, because they're basically both saying "other people selling is a good reason for me to sell", and so are follow-the-herd reasons, which at least for me rather undermines a fundamental reason for running a HYP at all: if I wanted to follow the herd, it would be easier simply to invest in an index tracker or some type of managed income fund...

I'm not saying don't post about past buys and sells - but please, if you can't (or won't) say why you made them, or give a link to where you previously gave those reasons so that people can readily find and look at them, consider whether it's a worthwhile contribution to the discussion.

Gengulphus

[Dod101]

Well in answer to Gengulphus's comments I sold Centrica on 4 December 2015 at a price of £2.12. In retrospect that was a good move although like Arb, I should have sold earlier. My reason was simply that I had lost faith in them and it infuriates me when a company behaves like Centrica, dripping out bad news over a long period and seemingly unable to grasp the nettle at once. I bought Schroder Non Voting shares with the proceeds and I have to say from an income point of view that was a good idea but from the capital it was not so good as I bought them at just over £22 and today they are only about 10% ahead. Anyone still holding Centrica would of course be happy with that outcome since Centrica's share price was below £1 the last time I looked and at least Schroders has kept modestly increasing their dividend.

Centrica says it is now going to concentrate on the customer which sounds like the retail side where there is of course a price cap and where SSE for example is trying to exit essentially because it is too difficult to make a profit. What future for Centrica?

Dod

[Julian]

Also in answer to Gengulphus's comments, the thread I alluded to is this one (viewtopic.php?f=15&t=17616) which covers the issues that I and others were concerned about in May this year - essentially a combination of what some including myself considered an infeasibly high yield on current price (with an implicit assumption at least by me that the yield was far more lightly to be "corrected" via a divi cut than a large share price rise), plus in my case secondary concerns about possible political issues re change of government and possible nationalisation.

In this case it does look as if CNA's unusually high yield is indeed in the process of being resolved, at least somewhat if not entirely, by a cut in dividend so discussions from the linked thread don't really carry over to today's CNA situation but might be food for thought for some in terms of their attitude to extremely high yields on current price and last declared dividends that might be exhibited by other holdings. Essentially it's a LUniversal "danger zone" discussion of which much prior discussion can presumably be found by searching for things like "danger zone" or "LUniversal danger zone" on this site.

- Julian

[jackdaww]

I have been out of Centrica for a long while I am happy to say.

Dod

Same here Dod. An unreliable HYP share at best, and I have no intention of buying back into it.

Ian.

=====

me too , long ago.

[IanTHughes]

I'm not saying don't post about past buys and sells - but please, if you can't (or won't) say why you made them, or give a link to where you previously gave those reasons so that people can readily find and look at them, consider whether it's a worthwhile contribution to the discussion.

Well in answer to Gengulphus's comments I sold Centrica on 4 December 2015 at a price of £2.12. In retrospect that was a good move although like Arb, I should have sold earlier. My reason was simply that I had lost faith in them and it infuriates me when a company behaves like Centrica, dripping out bad news over a long period and seemingly unable to grasp the nettle at once.

With respect, saying that you sold out because you "lost faith" and do not like a company "dripping out bad news over a long period and seemingly unable to grasp the nettle at once" does not tell us very much at all. "Lost faith" in what exactly, what "bad news" did you not like the company "dripping out" and what was the "nettle" they were "unable to grasp"? If you can answer those, then it would be telling us something concrete, rather than simply your feelings of dislike.


Ian

[jackdaww]

I'm not saying don't post about past buys and sells - but please, if you can't (or won't) say why you made them, or give a link to where you previously gave those reasons so that people can readily find and look at them, consider whether it's a worthwhile contribution to the discussion.

Well in answer to Gengulphus's comments I sold Centrica on 4 December 2015 at a price of £2.12. In retrospect that was a good move although like Arb, I should have sold earlier. My reason was simply that I had lost faith in them and it infuriates me when a company behaves like Centrica, dripping out bad news over a long period and seemingly unable to grasp the nettle at once.

With respect, saying that you sold out because you "lost faith" and do not like a company "dripping out bad news over a long period and seemingly unable to grasp the nettle at once" does not tell us very much at all. "Lost faith" in what exactly, what "bad news" did you not like the company "dripping out" and what was the "nettle" they were "unable to grasp"? If you can answer those, then it would be telling us something concrete, rather than simply your feelings of dislike.


Ian

=========================

selling in 2015 at around £2.30 , for reasons - debt , pensions deficit , politics , regulation , and more subjectively , i "went off" the management .

[Dod101]

I'm not saying don't post about past buys and sells - but please, if you can't (or won't) say why you made them, or give a link to where you previously gave those reasons so that people can readily find and look at them, consider whether it's a worthwhile contribution to the discussion.

Well in answer to Gengulphus's comments I sold Centrica on 4 December 2015 at a price of £2.12. In retrospect that was a good move although like Arb, I should have sold earlier. My reason was simply that I had lost faith in them and it infuriates me when a company behaves like Centrica, dripping out bad news over a long period and seemingly unable to grasp the nettle at once.

With respect, saying that you sold out because you "lost faith" and do not like a company "dripping out bad news over a long period and seemingly unable to grasp the nettle at once" does not tell us very much at all. "Lost faith" in what exactly, what "bad news" did you not like the company "dripping out" and what was the "nettle" they were "unable to grasp"? If you can answer those, then it would be telling us something concrete, rather than simply your feelings of dislike.

I cannot really go further than I have but I think I am right in saying they had a profit warning and a dividend cut some time before I sold in December 2015, but what I have just said I stand by; I am a great believer that investing is more art than science and 'feel', 'smell' or whatever you like to call plays a very big part. It does with my investment decisions anyway. I prefer to call it my assessment of the 'culture' of the company that is so vital. Once established it is very difficult to change.

Incidentally I failed to pick up the problems at Cobham because until its disastrous takeover it had an excellent culture over a very long period, more than I could say for BAE, and Cobham does other things besides help equip war planes.

Dod

[IanTHughes]

Well in answer to Gengulphus's comments I sold Centrica on 4 December 2015 at a price of £2.12. In retrospect that was a good move although like Arb, I should have sold earlier. My reason was simply that I had lost faith in them and it infuriates me when a company behaves like Centrica, dripping out bad news over a long period and seemingly unable to grasp the nettle at once.

With respect, saying that you sold out because you "lost faith" and do not like a company "dripping out bad news over a long period and seemingly unable to grasp the nettle at once" does not tell us very much at all. "Lost faith" in what exactly, what "bad news" did you not like the company "dripping out" and what was the "nettle" they were "unable to grasp"? If you can answer those, then it would be telling us something concrete, rather than simply your feelings of dislike.

I cannot really go further than I have but I think I am right in saying they had a profit warning and a dividend cut some time before I sold in December 2015

Great! Advising that a sale was the result of a "profit warning" and/or "dividend cut" does immediately tell the reader more information than they otherwise would have. In point of fact there were two consecutive annual dividend cuts.

https://www.dividenddata.co.uk/dividend ... y?epic=CNA

Year End | Interim | Final  | Special | Total* | Growth 
Dec-19   | 1.50p   | tbc    |       - | tbc    | tbc    
Dec-18   | 3.60p   | 8.40p  |       - | 12.00p |   0.00%
Dec-17   | 3.60p   | 8.40p  |       - | 12.00p |   0.00%
Dec-16   | 3.60p   | 8.40p  |       - | 12.00p |   0.00%
Dec-15   | 3.57p   | 8.43p  |       - | 12.00p | -11.11%
Dec-14   | 5.10p   | 8.40p  |       - | 13.50p | -20.59%
Dec-13   | 4.92p   | 12.08p |       - | 17.00p |   3.66%
Dec-12   | 4.62p   | 11.78p |       - | 16.40p |   6.49%

but what I have just said I stand by; I am a great believer that investing is more art than science and 'feel', 'smell' or whatever you like to call plays a very big part. It does with my investment decisions anyway. I prefer to call it my assessment of the 'culture' of the company that is so vital. Once established it is very difficult to change.

I know you do and whilst I cannot understand it, it is a reason for you. I just wish you could put some flesh on the bones so that I could better understand what that "feeling" or "smell" represents in my reality.

I think what Gengulphus was alluding to was that simply stating that one has sold out without saying why, tells other people nothing of any practical use. Whereas stating a reason for the sale, even if that reason is no more or less than a "bad feeling or smell", at least tells others something they might find instructive, even useful. Of course there still remain others like me that think a "bad feeling or smell" is useless but one cannot have everything!

Cobham does other things besides help equip war planes.

So too does BAE


Ian