7th Oct 2021. 8.56am

Regency View:


Regency View:


Serica’s new projects expected to generate ‘very significant returns for shareholders’

Our British oil & gas play Serica Energy (SQZ) announced a strong set of Interim Results last week…

The North Sea specialist delivered a gross profit of £46m versus a loss of £19.8m in H1 2020.  Cash flow from operations surged to £63.8m versus £19.3m in the same period last year.

Production reduced to 18,900 boe per day net to Serica compared to 21,600 boe per day for H1 2020 after extended field maintenance shut-ins during H1 following last year’s COVID-19 related deferrals.

Serica’s Rhum R3 well workover is completed and commenced production in late August 2021. While its Columbus production well has been drilled and tied into the export system ready for first production in Q4.

Commenting on the strong numbers CEO Mitch Flegg said:

“In the current environment Serica’s focus on gas production and investment in new projects is expected to generate very significant returns for shareholders and help support further investment…

“We expect first production from Columbus in Q4 this year and then Serica’s share of receipts under the BKR Net Cash Flow Sharing mechanism increases from 60% to 100% on 1 January 2022. Later in 2022 we intend to drill the North Eigg well which, if successful, will enhance gas reserves in the BKR area and potentially extend the life of Bruce and related infrastructure”.

SQZ Daily Candle Chart

SQZ Daily Candle Chart

Ceres commercial partnerships deliver strong first half growth

Ceres Power (CWR) said revenue and other income had jumped 96% to £17.4m in the first half of the year, reflecting “strong progress of commercial partnerships”.

The fuel cell creator delivered gross profits of £12.2m, up from £7.1m H1 2020 on “sector-leading gross margins” of 72%.

Ceres are on track to achieve revenue in line with consensus estimates of £31.5m for the 12 months ending 30 December 2021.

Phil Caldwell, chief executive of Ceres commented:

“We are pleased to report a strong performance for the Company in the first half of 2021, including a notable increase in our revenues at sector-leading gross margins…

“The outlook for clean technology innovation and hydrogen remains strong, buoyed by growth in strategies, regulation and green investment…

“Our partners continue to announce significant developments in the scale and application of our technology and the high level of interest and early engagement around its use for electrolysis to produce green hydrogen is very promising.”

CWR Daily Candle Chart

CWR Daily Candle Chart

Begbies confident of delivering full-year market expectations

In an AGM statement released last month, Begbies Traynor (BEG) said that it had delivered double-digit revenue growth from May-Aug 2021.

The business recovery specialist said it had felt the benefit of recent acquisitions and the bounce back in activity from last year’s lockdowns.

“Over the last four financial years, we have delivered compound annual growth in adjusted earnings per share of 20%, including 10% organic growth” read the AGM statement by Begbies Executive Chairman Ric Traynor…

“Over the same period, we have moved from net debt of £10.3m to net cash of £3.0m at the year end, whilst making value-enhancing acquisitions and delivering 8% compound growth in dividend per share” he added.

“At this early stage of the financial year, we remain confident of delivering market expectations for the full year”

Begbies share price has performed well for us and the shares are currently consolidating beneath highs for the year.

BEG Daily Candle Chart

BEG Daily Candle Chart

Boohoo feeling margin squeeze

Boohoo’s (BOO) share price gapped lower last week after stating that its profit margins will fall short of its previous forecast for the year. The margin squeeze is due to higher costs from freight and wages.

US growth slowed more than expected from 43% in the first quarter to 8% in the second, and sales in Europe and the rest of the world were hit by delays in delivering products to customers.

However, the sales outlook has improved with students returning to universities and a higher level of social events. Boohoo also have a very strong balance sheet with over £270m net cash and this will continue to fuel acquisitive growth.

Boohoo CEO, John Lyttle commented:

“We are delighted to have doubled our market share in key markets such as the UK and US, have significantly expanded our target addressable market through selective acquisitions and are excited about the global potential for all of our brands…

“Entering the second half of the year, the Group is well-positioned to accelerate its growth and our confidence in the Group’s medium term targets remain unchanged”

The market’s reaction has been quite brutal, and we are monitoring how Boohoo’s share price responds to key support this week.

BOO Daily Candle Chart

BOO Daily Candle Chart

EQTEC on track to achieve seven times revenue growth

In its Interim Results, released last week, EQTEC (EQT) said it is on track to achieve seven times revenue growth over the previous year.

The waste-to-energy stock posted sales of €481,720 in the six months to June and booked a loss before tax of just over €4m.

Operational highlights included a growing conversion of pipeline opportunities into active development projects and financial close of its first Market Development Centre.

David Palumbo, CEO of EQTEC, commented:

“Policymakers need to know that EQTEC’s Advanced Gasification is not a concept technology for the future – it is a ‘now’ solution for ‘now’ challenges of waste management and clean energy…

“The ESG strategy and marketing strategy we are currently developing for 2022 onwards will contribute to giving gasification a greater profile, and position EQTEC as the leader of the sector” he added.

EQTEC’s share price, along with other stocks in the ESG sector have been side-lined by the market in recent weeks due to the heightening energy crisis. However, we remain confident of EQTEC’s long-term proposition and expect the shares to hold support at 0.89p.

EQT Daily Candle Chart

EQT Daily Candle Chart


All content is provided for general information only and should not be construed as any form of advice or personal recommendation. The provision of this content is not regulated by the Financial Conduct Authority.