Centrica profits rise again

chucky

Mr._Pricklepants wrote: »

Apologies for going off topic, but how the hell did I end up in a PM from devon to Generali??



I haven't even posted in this thread (until now)!! :rotfl:

We obviously bother him if he mentioned it even though he obviously denies it.

I hope he gets over his latest online breakdown and learns that he is treated this way because of the way he behaves/acts and maybe should take a long hard look at himself. You reap what you sow unfortunately...

Generali

Harry_Boyle wrote: »

As an interesting exercise to move away from Devon's emotional breakdown. Has anyone done the sums to see how much you would need to invest in energy company shares to cover the average electricity bill (Gas bill too I suppose)?

Are we talking thousands or tens of thousands? I'm currently in an efficiency drive at our house, but with the best will in the world, we will still require heating and electricity and so it'd be great if our reduced energy costs were covered by energy company dividends. Even better if those dividends came from a company that invests heavily in renewable energy.

I was wondering myself a related thing. How does the mark-up (in percentage terms) of retail gas prices over wholesale now compare to at privatisation? That is to say, is Centrica gouging us more or just running the business better?

To answer your question we guesstimate this year's dividend to be 15p/share. Then you need to work out how many lots of 15 pence you need to pay your gas bill.

In my case I need very few because I have one gas appliance, a fire which I use for about 6-8 weeks a year and a couple of those weeks are more because it's nice to have a fire in the corner of the room than anything more practical!

wotsthat

Generali wrote: »

So Centrica. Great results IMHO. Gains across the board, not just in the consumer division. I reckon I'm a buyer at the current price.

I was a buyer at 2008 prices.:beer: Dividends have been way ahead of anything that could have been achieved with the cash and there has been a nice capital gain too.

The concern I have, barring normal corrections etc., is that politicians may consider windfall type taxes because they pay too much attention to headlines. The other thing to consider is that IMO the share price is being supported by poor returns on cash holdings and, if this changes, the price is put under pressure.

That's balanced somewhat by an ability to pass on increasing costs and a seeming indifference by the average consumer to reducing consumption.

Generali

wotsthat wrote: »

I was a buyer at 2008 prices.:beer: Dividends have been way ahead of anything that could have been achieved with the cash and there has been a nice capital gain too.

The concern I have, barring normal corrections etc., is that politicians may consider windfall type taxes because they pay too much attention to headlines. The other thing to consider is that IMO the share price is being supported by poor returns on cash holdings and, if this changes, the price is put under pressure.

That's balanced somewhat by an ability to pass on increasing costs and a seeming indifference by the average consumer to reducing consumption.

Yup, I love stocks like regulate utilities. Just remember the lesson we learn from Railtrack: a Government can force a regulated company into insolvency and then confiscate your shares.

There is still a risk to holding this stuff but it's more political than financial.

wotsthat

Harry_Boyle wrote: »

Are we talking thousands or tens of thousands? I'm currently in an efficiency drive at our house, but with the best will in the world, we will still require heating and electricity and so it'd be great if our reduced energy costs were covered by energy company dividends. Even better if those dividends came from a company that invests heavily in renewable energy.

My average buying price is £2.68 per share. Dividends were..

2009 - 12.8p
2010 - 14.3p
2011 - 15.4p
2012 - 16.4p
Total - 58.9p

That's equivalent to an interest rate of 5.9%. (slightly enhanced because I have taken some profits and managed to buy in at a lower price). Dividends are forecast to increase over inflation for at least two years.

Strong buy IMO*

* as I thought about Lloyds in 2006, 2007, 2008, 2009, 2011 & 2012.

Generali

wotsthat wrote: »

Strong buy IMO*

* as I thought about Lloyds in 2006, 2007, 2008, 2009, 2011 & 2012.

We win some and we lose some, that's why investors should diversify over time as well as over assets.

At least the 2006 & 2007 dividends have mitigated some losses and your 2008-9 purchases have mitigated your loss of dividend with capital gains.

I'd be interested to know how your LLOY position works out overall over that period.

Carl31

I have no problems with companies making profits, In fact its good to see a company growing in these times

However, where the company is profiting, continually out of an essential product that affects peoples health, and could even lead to death if some people are not able able to access it as required, I cant help but feel its all a little unethical

Of course, there are other suppliers, but utilities all boil down to who's the cheapest at the end of the day

wotsthat

Generali wrote: »

I'd be interested to know how your LLOY position works out overall over that period.

I was worried about lending at the time but thought the decline in share price was an over-reaction so compounded buying at too high a price by trading (poorly) in and out too. Just as it was becoming obvious that I'd got things badly wrong Lloyds increased the dividend which I took as a buying signal. After all why would a company increase the dividend if things were about to go wrong (answer - because the board were idiots).

Just before that (or just after) Gordon Brown 'gifted' HBOS to Lloyds which I took as another buying signal - Lloyds had been after them for years although now I wonder why.

I was under-diversified at the time but luckily a long way off betting the farm plus a few better trades in recent years have helped as has the general appreciation in share price.

The 'excellent' news is that I've very successfully averaged down - instead of a small number of shares at an average £5 or so I now have thousands with a break-even price of £1.10.

I refuse to sell them - the very large red number that I see whenever I look at my portfolio is a constant reminder. There's no guarantee that even with decent logic and information a profit can be made but to use flawed logic and incorrect information is to trust entirely to luck.

IronWolf

Carl31 wrote: »

I have no problems with companies making profits, In fact its good to see a company growing in these times

However, where the company is profiting, continually out of an essential product that affects peoples health, and could even lead to death if some people are not able able to access it as required, I cant help but feel its all a little unethical

Of course, there are other suppliers, but utilities all boil down to who's the cheapest at the end of the day

So do you also have a problem with private companies profitting from selling food? Or houses? Or clothes? Or drugs? All are arguably more important than energy.

Before you know it the whole economy is nationalised and youre screwed.

purch

At least when you buy a tin of Heinz baked beans in Asda, it is a different can of beans to the can of Heinz baked beans in Tesco.

The Gas that comes down your pipe is the same Gas whoever you choose to pay for it.

It's a flawed concept, there is no proper competition, and only results in lots of opportunities to shaft the consumer.

It even manages to make the Rail franchise system look efficient :eek: