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Centrica, bombed out but looking good?

Wider investment strategy discussions not dealt with elsewhere
Nimrod103
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Re: Centrica, bombed out but looking good?

#98918

Postby Nimrod103 » November 26th, 2017, 11:16 am

FredBloggs wrote:
Nimrod103 wrote:Correct me if I am wrong but my understanding is that Centrica had a very large customer base, presumably most of whom were on standard rates which were presumably profitable until the Govt came along with their energy cap, which makes those rates untenable. Meanwhile other suppliers have pushed 1 year contracts on more competitive rates, using the car insurance model where if you don't switch provider after 1 year (or 18 months in some cases) you will lose out by being put on an uncompetitive deal. I don't understand why Centrica with its colossal buying power cannot seem to compete in this market.

Meanwhile I been resuming my yearly search for a new energy supplier, and my most competitive deal comes from Bulb, who I have never heard of but as well as offering me the most competitive rates, also brags about supplying me 100% renewable electricity. From what I read in chat rooms, my impression is that Bulb is picking up customers all around. I don't understand how they can do the business, yet Centrica can't.

I am appalled that my holding in Centrica has dropped like it has. The company seems to have lost all ability of running a profitable business for its shareholders. I should have sold out when I learnt that Haythornthwaite was in charge.

Not only that. It's actually much worse. Centrica is a vertically integrated business. It has it's own gas production assets so it is in control from the sea bed to the end user's boiler. It also has it's own CCGT power stations so it's generating it's own electricity too. If that business can't compete against a "Johnny come lately" in the energy business, it really is a dodo.


I assume Centrica (being biased towards gas energy) is being trashed by Govt dictat to push more subsidized renewable energy into the market?
How do you rate Centrica as a merger/takeover target?

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Re: Centrica, bombed out but looking good?

#98920

Postby FredBloggs » November 26th, 2017, 11:25 am

Nimrod103 wrote:
FredBloggs wrote:
Nimrod103 wrote:Correct me if I am wrong but my understanding is that Centrica had a very large customer base, presumably most of whom were on standard rates which were presumably profitable until the Govt came along with their energy cap, which makes those rates untenable. Meanwhile other suppliers have pushed 1 year contracts on more competitive rates, using the car insurance model where if you don't switch provider after 1 year (or 18 months in some cases) you will lose out by being put on an uncompetitive deal. I don't understand why Centrica with its colossal buying power cannot seem to compete in this market.

Meanwhile I been resuming my yearly search for a new energy supplier, and my most competitive deal comes from Bulb, who I have never heard of but as well as offering me the most competitive rates, also brags about supplying me 100% renewable electricity. From what I read in chat rooms, my impression is that Bulb is picking up customers all around. I don't understand how they can do the business, yet Centrica can't.

I am appalled that my holding in Centrica has dropped like it has. The company seems to have lost all ability of running a profitable business for its shareholders. I should have sold out when I learnt that Haythornthwaite was in charge.

Not only that. It's actually much worse. Centrica is a vertically integrated business. It has it's own gas production assets so it is in control from the sea bed to the end user's boiler. It also has it's own CCGT power stations so it's generating it's own electricity too. If that business can't compete against a "Johnny come lately" in the energy business, it really is a dodo.


I assume Centrica (being biased towards gas energy) is being trashed by Govt dictat to push more subsidized renewable energy into the market?
How do you rate Centrica as a merger/takeover target?

A more attractive break up prospect perhaps? There's a whole bunch of assets and business streams in there that I'm guessing are close to bargain basement territory now? Perhaps the domestic business (per SSE recently) is the least attractive part of the company. It's retail customers seem to think so going by recent evidence.

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Re: Centrica, bombed out but looking good?

#98930

Postby Nimrod103 » November 26th, 2017, 11:52 am

FredBloggs wrote:
Nimrod103 wrote:
FredBloggs wrote:Not only that. It's actually much worse. Centrica is a vertically integrated business. It has it's own gas production assets so it is in control from the sea bed to the end user's boiler. It also has it's own CCGT power stations so it's generating it's own electricity too. If that business can't compete against a "Johnny come lately" in the energy business, it really is a dodo.


I assume Centrica (being biased towards gas energy) is being trashed by Govt dictat to push more subsidized renewable energy into the market?
How do you rate Centrica as a merger/takeover target?

A more attractive break up prospect perhaps? There's a whole bunch of assets and business streams in there that I'm guessing are close to bargain basement territory now? Perhaps the domestic business (per SSE recently) is the least attractive part of the company. It's retail customers seem to think so going by recent evidence.


A friend of mine is keen on a Centrica merger with EDF's UK business. I have no idea whether it might make sense.

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Re: Centrica, bombed out but looking good?

#98932

Postby FredBloggs » November 26th, 2017, 12:02 pm

Nimrod103 wrote:
FredBloggs wrote:
Nimrod103 wrote:
I assume Centrica (being biased towards gas energy) is being trashed by Govt dictat to push more subsidized renewable energy into the market?
How do you rate Centrica as a merger/takeover target?

A more attractive break up prospect perhaps? There's a whole bunch of assets and business streams in there that I'm guessing are close to bargain basement territory now? Perhaps the domestic business (per SSE recently) is the least attractive part of the company. It's retail customers seem to think so going by recent evidence.


A friend of mine is keen on a Centrica merger with EDF's UK business. I have no idea whether it might make sense.

Doubtful. EDF has way too much to chew on in it's own backyard, it's only being kept afloat by the French government. Any private company would have gone bust years ago. Even worse, EDF was forced to take ownership of the bust Areva nuclear business. In any case, Centrica bailed out of it's stake in the Moorside nuclear project, which actually was a very wise decision in hindsight.

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Re: Centrica, bombed out but looking good?

#98947

Postby Nimrod103 » November 26th, 2017, 12:46 pm

FredBloggs wrote:
Nimrod103 wrote:
FredBloggs wrote:A more attractive break up prospect perhaps? There's a whole bunch of assets and business streams in there that I'm guessing are close to bargain basement territory now? Perhaps the domestic business (per SSE recently) is the least attractive part of the company. It's retail customers seem to think so going by recent evidence.


A friend of mine is keen on a Centrica merger with EDF's UK business. I have no idea whether it might make sense.

Doubtful. EDF has way too much to chew on in it's own backyard, it's only being kept afloat by the French government. Any private company would have gone bust years ago. Even worse, EDF was forced to take ownership of the bust Areva nuclear business. In any case, Centrica bailed out of it's stake in the Moorside nuclear project, which actually was a very wise decision in hindsight.


I'm sure you are right. The whole energy supply business in the UK seems to be completely, unbelievably, perhaps irretrievably FU, and mainly by Govt dictat. I originally invested a small sum in Centrica because I thought after Millibands demise, price caps would be a thing of the past, and the Govt would understand how crucial a healthy low cost energy supply business was to UK industry and domestic consumers. I was clearly wrong. I don't think they care, as long as their renewable targets are met.

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Re: Centrica, bombed out but looking good?

#98992

Postby tjh290633 » November 26th, 2017, 3:55 pm

Many years ago we had gas from British Gas and electricity from SEEboard, which was taken over by EDF. I did my research on dual fuel prices and found that EDF offered the best rates. EDF keep updating their fixed rates, which you can leave at any time if you can find a better deal and until recently they told you about any such deals.

EDF also tell you that your electricity will come from sustainable sources, meaning nuclear. I don't know how British Gas can offer gas at higher prices when they own the sources. One would expect it to be the other way round, but maybe their costs are higher than the wholesale market.

British Gas also have a lot of their customers on maintenance contracts, which are dubious value for money. Modern gas boilers have little or nothing that needs maintaining, and it seems to be a common experience that trouble arises just after an annual "service". We have only ever had ours attended to by the makers on two occasions, the last over 15 years ago. Our local plumber replaced the 3-way valve when it failed.

I can understand why they are haemorrhaging customers.

TJH

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Re: Centrica, bombed out but looking good?

#99754

Postby FredBloggs » November 29th, 2017, 1:10 am

CNA, next stop 99P? Seems I might not be alone thinking this -
Why Centrica shares may only be worth 102p

At sub 100p CNA is a prime break up target, all aboard at 99p then?
http://www.iii.co.uk/articles/463684/why-centrica-shares-may-only-be-worth-102p
Top tip - Ignore the blatant, intrusive advert at the bottom of the page, just look at the graph!

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Re: Centrica, bombed out but looking good?

#99756

Postby BobGe » November 29th, 2017, 3:14 am

There's a lot of difference between 99p and 102p though...

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Re: Centrica, bombed out but looking good?

#99761

Postby FredBloggs » November 29th, 2017, 4:07 am

BobGe wrote:There's a lot of difference between 99p and 102p though...

3% (Or thereabouts).

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Re: Centrica, bombed out but looking good?

#101592

Postby BobGe » December 4th, 2017, 9:01 pm

FredBloggs wrote:3% (Or thereabouts).

In theory, yes. But in practice comes the darkness... :twisted:

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Re: Centrica, bombed out but looking good?

#101850

Postby idpickering » December 5th, 2017, 5:43 pm

moorfield wrote:
FredBloggs wrote:A real bad day at Centrica, it seems. Looks likely to head sub 100p to me. Down > 17% and counting at 135p. The reason? Here -
https://www.theguardian.com/business/2017/nov/23/centrica-shares-dive-after-british-gas-loses-823000-customers


:shock: :o :shock:

Thanks for highlighting FB.

I've been "pickering" about CNA for a while, but it seems we're into falling knife territory now ...


I so wish I'd got a copyright on those 'pickering' or 'pickered' terms. :lol: I'm famed/mocked for being so fickle, hence the term.

Ian.

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Re: Centrica, bombed out but looking good?

#101851

Postby idpickering » December 5th, 2017, 5:50 pm

By the way, I dumped my Centrica shares on 23 Nov 17, selling at 137p per share. No regrets because they've been a very unreliable share/company, with dividend cuts etc. Glad to be out. I hold SSE, NG. and PNN only in the utility universe now.

Ian.

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Re: Centrica, bombed out but looking good?

#101869

Postby moorfield » December 5th, 2017, 7:24 pm

idpickering wrote:
I so wish I'd got a copyright on those 'pickering' or 'pickered' terms. :lol: I'm famed/mocked for being so fickle, hence the term.

Ian.


Well you'll be pleased to know I'm still pickering over a CNA top-up ...!

By the way, the boiler man (eventually) decided to turn up yesterday to service our boilers ....

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Re: Centrica, bombed out but looking good?

#101872

Postby idpickering » December 5th, 2017, 7:45 pm

moorfield wrote:
idpickering wrote:
I so wish I'd got a copyright on those 'pickering' or 'pickered' terms. :lol: I'm famed/mocked for being so fickle, hence the term.

Ian.


Well you'll be pleased to know I'm still pickering over a CNA top-up ...!

By the way, the boiler man (eventually) decided to turn up yesterday to service our boilers ....


It doesn't give you much confidence in the company does it? :-)

Ian.

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Re: Centrica, bombed out but looking good?

#103594

Postby moorfield » December 12th, 2017, 1:20 pm

UK gas prices jump 20% after explosion hits Austria’s main gas hub:
https://www.ft.com/content/07e81dfa-aa1 ... 54ff139a43

Not good news for Centrica, having just dropped it's Variable Tariff.

Let's hope they've already bought the gas they need to supply their long-suffering customers this winter ... or their margins will be squeezed even further.


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