Our live Investing Matters Podcast Special which took place at the Master Investor Show discussing 'How undervalued is the UK stock market?', has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
£544m mcap.....zzzz bed time.
Blanket drops in most energy producers.
If you do simple maths anything close to a £574m mcap(200p) would offer insane value considering the cash on hand the company has, i'd suggest ridiculous to even suggest. Then we also the potential of doubling the 2p reserves with N.eigg. So i'd conclude more nonsense that the future is not bright. Check the contracts for next year for gas prices.
Not sure about a blanket drop,but not so long ago this was trading in 120 range. So 200 range is highly possible inmv. Just depends on how long gas prices remain high as there is little else to push this forward inmo.
This will offer opportunity(already is). Blanket drops are always buying moments in the correct company.
At the end of the day Serica has not helped itself of late. The announcement of a share buy back just before bp exits, the joint house broker upgrading before this occurs,no deals apart from a gamble with eigg and to boot no farm in to mitigate risk.
As for a takeover inmv if I was an acquirer I would take this over now and delay eigg until some sort of water tight contract is drawn up with hmg.
Hi NewK - probably not much M/A activity to be seen surrounding Serica (either way) until the North Eigg result is known.
If memory serves, a successful outcome could double our P2s, - if not, then a £50m 'write off' cost will dent our Coh but not significantly so, given the sizeable inflow of cash in these conditions.
Certainly agree that nearing a negative EV or near to, makes an approach for the Co. very much more likely / appealing, perhaps for the likes of Harbour (formerly Chrysaor) and ACW / MF will be very much aware of this... Maybe, the share 'buy back' facility sought had this in mind?
As an aside, I reckon that Serica's eps for 2021 were probably nearer 50p if you add back the hedging / swaps outlay rather than the 30p reported and with all the 2022 revenue boosts now in play, the current eps might be nearer double that - ergo, the prospective multiple could be knocking on, say, 3 x ? Now, that's REALLY cheap - sasa.
It strikes me that any 'windfall tax' will be there to appease the public mood more than anything. It's a popular idea no doubt, but of course people forget that the UK Gov can only tax UK companies, and those that provide Oil and gas to the UK are vital players right now. The O&G industry will be making that very clear and government will understand that. But they won't escape the pressure unless they do something to appease the public. But what form will that take - a tax on declared profits, is it retrospective in any way (can't imagine), does it only hit companies above a certain Market cap or trading size etc.. I suspect they will implement something, but whether it raises much money or not is another matter; it's likely to be sidestepped by the companies as the Govn clearly want to be seen to be doing something more than actually impacting the sector.
There appears to be no resistance at all in these drops
Your dealing with a cabinet that has no loyalty or integrity inmv. Take a look at how they turned their back on the diagnostic industry during covid after asking them to assist.To make matters worse they spent billions on Chinese lfts which were inferior to home grown tests.
Maybe Serica could use eigg as a bargaining tool by saying tax us and we won't develop eigg. Eigg should have been farmed out anyway inmo
Who is on the other side of the hedges that Serica and Harbour etc have, if there ends up a windfall tax, surely the hedge companies more than anyone are making the most profit with zero reinvestment?
Sasa,
So much for invest or we will tax you ….. no wonder why UK PLC have issues.
As for SQZ , as a none tax expert I would guess that any PE t/o would be able to circumnavigate taxes Rishi et al want to throw their way in some way or another.
Now, working on the assumption NE will prove successful…. How long would you wait before making an approach for SQZ …. Me, I would already be in NDA’s with them…. Any success at NE would instantly add a significant premium to our SP … a premium that would require further investment and several years before you begin to see ROI … something that PE’s are not keen on …. Unless it can be asset stripped !!
Next few weeks / months will dictate the direction of our company imo.
In the meantime… our SP remains a traders paradise…. Whilst we move daily closer to a position of negative EV.
Aimo & dyor
Agree on all points but Sqz is tanking due to windfall taxes and day ahead prices… yet Kist isn’t
Which is suggestive that the drop is not to do with either windfall taxes or day ahead gas prices
Almost invariably discourages exploration / development of existing resources but prompts further industry consolidation / M&A activity.
Serica is particularly well positioned in both respects, given its current programme and burgeoning cash accumulation and if drilling North Eigg proves successful, too, todays sp level will be rapidly left behind - sasa.