Southern Energy (AIM:SOUC) - Share price, News & Analysis

SOUC fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	0/6
Past Performance	3/6
Financial Health	2/6
Dividends	0/6

SOUC Stock Overview

Southern Energy Corp. oil and natural gas exploration and production company in Canada.

Rewards

Trading at 30% below our estimate of its fair value

Became profitable this year

Risk Analysis

Earnings are forecast to decline by an average of 44.4% per year for the next 3 years

High level of non-cash earnings

Shareholders have been substantially diluted in the past year

Has a high level of debt

+ 2 more risks

Price History & Performance

Summary of all time highs, changes and price drops for Southern Energy
Historical stock prices
Current Share Price	CA$0.41
52 Week High	CA$0.44
52 Week Low	CA$0.15
Beta	1.27
1 Month Change	32.26%
3 Month Change	67.35%
1 Year Change	n/a
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	-21.15%

Shareholder Returns

	SOUC	GB Oil and Gas	GB Market
7D	2.5%	1.5%	-0.4%
1Y	n/a	14.9%	-0.2%

Return vs Industry: Insufficient data to determine how SOUC performed against the UK Oil and Gas industry.

Return vs Market: Insufficient data to determine how SOUC performed against the UK Market.

Price Volatility

Is SOUC's price volatile compared to industry and market?
SOUC volatility
SOUC Average Weekly Movement	8.9%
Oil and Gas Industry Average Movement	9.5%
Market Average Movement	6.2%
10% most volatile stocks in GB Market	12.9%
10% least volatile stocks in GB Market	3.0%

Stable Share Price: SOUC is more volatile than 75% of UK stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: SOUC's weekly volatility (9%) has been stable over the past year, but is still higher than 75% of UK stocks.

About the Company

Founded	Employees	CEO	Website
2008	19	Ian Atkinson	https://www.southernenergycorp.com

Southern Energy Corp. oil and natural gas exploration and production company in Canada. Its principal properties are Central Mississippi Assets that covers an area of approximately 31,000 acres containing oil and gas production at Gwinville, Mechanicsburg, Williamsburg and Mount Olive, and Mississippi. The company was formerly known as Standard Exploration Ltd.

Southern Energy Fundamentals Summary

How do Southern Energy's earnings and revenue compare to its market cap?
SOUC fundamental statistics
Market Cap	CA$55.52m
Earnings (TTM)	CA$12.39m
Revenue (TTM)	CA$15.14m

4.5x

P/E Ratio

3.7x

P/S Ratio

Is SOUC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SOUC income statement (TTM)
Revenue	CA$15.14m
Cost of Revenue	CA$4.99m
Gross Profit	CA$10.15m
Other Expenses	-CA$2.24m
Earnings	CA$12.39m

Last Reported Earnings

Sep 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.16
Gross Margin	67.05%
Net Profit Margin	81.87%
Debt/Equity Ratio	86.6%

How did SOUC perform over the long term?

See historical performance and comparison

Valuation

Is Southern Energy undervalued compared to its fair value and its price relative to the market?

30.0%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: SOUC (£0.41) is trading below our estimate of fair value (£0.59)

Significantly Below Fair Value: SOUC is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: SOUC is good value based on its PE Ratio (4.5x) compared to the UK Oil and Gas industry average (13x).

PE vs Market: SOUC is good value based on its PE Ratio (4.5x) compared to the UK market (16.7x).

Price to Earnings Growth Ratio

PEG Ratio: SOUC's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

Price to Book Ratio

PB vs Industry: SOUC is overvalued based on its PB Ratio (3.6x) compared to the GB Oil and Gas industry average (1.3x).

Future Growth

How is Southern Energy forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

-44.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SOUC's earnings are forecast to decline over the next 3 years (-44.4% per year).

Earnings vs Market: SOUC's earnings are forecast to decline over the next 3 years (-44.4% per year).

High Growth Earnings: SOUC's earnings are forecast to decline over the next 3 years.

Revenue vs Market: SOUC's revenue is expected to decline over the next 3 years (-10% per year).

High Growth Revenue: SOUC's revenue is forecast to decline over the next 3 years (-10% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if SOUC's Return on Equity is forecast to be high in 3 years time

Past Performance

How has Southern Energy performed over the past 5 years?

-14.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SOUC has a high level of non-cash earnings.

Growing Profit Margin: SOUC became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: SOUC has become profitable over the past 5 years, growing earnings by -14.7% per year.

Accelerating Growth: SOUC has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: SOUC has become profitable in the last year, making it difficult to compare its past year earnings growth to the Oil and Gas industry (183.2%).

Return on Equity

High ROE: SOUC's Return on Equity (81.4%) is considered outstanding.

Financial Health

How is Southern Energy's financial position?

Financial Position Analysis

Short Term Liabilities: SOUC's short term assets (CA$4.9M) do not cover its short term liabilities (CA$14.7M).

Long Term Liabilities: SOUC's short term assets (CA$4.9M) do not cover its long term liabilities (CA$17.2M).

Debt to Equity History and Analysis

Debt Level: SOUC's net debt to equity ratio (77.5%) is considered high.

Reducing Debt: Insufficient data to determine if SOUC's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: SOUC's debt is well covered by operating cash flow (26.4%).

Interest Coverage: SOUC's interest payments on its debt are well covered by EBIT (7.9x coverage).

Balance Sheet

Dividend

What is Southern Energy current dividend yield, its reliability and sustainability?

Dividend Yield vs Market

Notable Dividend: Unable to evaluate SOUC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate SOUC's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if SOUC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SOUC's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as SOUC has not reported any payouts.

Next Steps

Explore strong dividend paying companies in the Energy industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure

CEO

Ian Atkinson

3.33yrs

Tenure

CA$185,000

Compensation

Mr. Ian Kenneth Atkinson, MSc, P.Eng., has been President, Chief Executive Officer and Director at Southern Energy Corp. (formerly, Standard Exploration Ltd.) since December 11, 2018. He has been the Chief...

CEO Compensation Analysis

Compensation vs Market: Ian's total compensation ($USD146.66K) is below average for companies of similar size in the UK market ($USD316.05K).

Compensation vs Earnings: Ian's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: SOUC's management team is considered experienced (3.3 years average tenure).

Board Members

Experienced Board: SOUC's board of directors are considered experienced (3.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: SOUC insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 183.4%.

Data	Last Updated (UTC time)
Company Analysis	2022/04/15 00:00
End of Day Share Price	2022/04/14 00:00
Earnings	2021/09/30
Annual Earnings	2020/12/31