AIM:SQZ

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Executive Summary

Serica Energy plc, an upstream oil and gas company, engages in the identification, acquisition, exploration, and exploitation of oil and gas reserves. More Details


Snowflake Analysis

Undervalued with excellent balance sheet.


Similar Companies

Share Price & News

How has Serica Energy's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SQZ is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: SQZ's weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

0.8%

SQZ

2.1%

GB Oil and Gas

0.3%

GB Market


1 Year Return

22.9%

SQZ

-6.7%

GB Oil and Gas

0.8%

GB Market

Return vs Industry: SQZ exceeded the UK Oil and Gas industry which returned -6.8% over the past year.

Return vs Market: SQZ exceeded the UK Market which returned 1.1% over the past year.


Shareholder returns

SQZIndustryMarket
7 Day0.8%2.1%0.3%
30 Day2.9%12.3%3.2%
90 Day7.9%16.5%4.5%
1 Year26.1%22.9%-1.6%-6.7%6.7%0.8%
3 Year64.8%60.5%3.9%-10.3%11.5%-1.9%
5 Year1,243.3%1,208.7%49.0%17.8%41.8%14.5%

Long-Term Price Volatility Vs. Market

How volatile is Serica Energy's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

33.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SQZ (£1.2) is trading below our estimate of fair value (£1.8)

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


Price To Earnings Ratio

PE vs Industry: SQZ is good value based on its PE Ratio (6.6x) compared to the GB Oil and Gas industry average (15.1x).

PE vs Market: SQZ is good value based on its PE Ratio (6.6x) compared to the UK market (24.3x).


Price to Earnings Growth Ratio

PEG Ratio: SQZ is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: SQZ is overvalued based on its PB Ratio (1.6x) compared to the GB Oil and Gas industry average (1x).


Next Steps

Future Growth

How is Serica Energy forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

23.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SQZ's forecast earnings growth (23.2% per year) is above the savings rate (1%).

Earnings vs Market: SQZ's earnings (23.2% per year) are forecast to grow faster than the UK market (22.9% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SQZ's revenue (4.9% per year) is forecast to grow slower than the UK market (7.3% per year).

High Growth Revenue: SQZ's revenue (4.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

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


Next Steps

Past Performance

How has Serica Energy performed over the past 5 years?

58.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SQZ has a large one-off gain of £54.8M impacting its June 30 2020 financial results.

Growing Profit Margin: SQZ's current net profit margins (30.9%) are lower than last year (48.8%).


Past Earnings Growth Analysis

Earnings Trend: SQZ has become profitable over the past 5 years, growing earnings by 58.5% per year.

Accelerating Growth: SQZ's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SQZ had negative earnings growth (-47%) over the past year, making it difficult to compare to the Oil and Gas industry average (-47%).


Return on Equity

High ROE: SQZ's Return on Equity (22.8%) is considered high.


Next Steps

Financial Health

How is Serica Energy's financial position?


Financial Position Analysis

Short Term Liabilities: SQZ's short term assets (£133.6M) exceed its short term liabilities (£73.1M).

Long Term Liabilities: SQZ's short term assets (£133.6M) do not cover its long term liabilities (£174.6M).


Debt to Equity History and Analysis

Debt Level: SQZ is debt free.

Reducing Debt: SQZ had no debt 5 years ago.

Debt Coverage: SQZ has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: SQZ has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

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

2.49%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SQZ's dividend (2.49%) is higher than the bottom 25% of dividend payers in the UK market (1.47%).

High Dividend: SQZ's dividend (2.49%) is low compared to the top 25% of dividend payers in the UK market (4.48%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether SQZ's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if SQZ's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (16.4%), SQZ's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SQZ's dividends in 3 years are forecast to be well covered by earnings (17.7% payout ratio).


Next Steps

Management

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

5.8yrs

Average management tenure


CEO

Mitch Flegg (60 yo)

3.33yrs

Tenure

UK£564,000

Compensation

Mr. Mitchell Robert Flegg, also known as Mitch, has been the Chief Executive Officer and Director of Serica Energy PLC since November 21, 2017. Mr Flegg has been the Chief Executive Officer and Executive D...


CEO Compensation Analysis

Compensation vs Market: Mitch's total compensation ($USD786.68K) is about average for companies of similar size in the UK market ($USD765.56K).

Compensation vs Earnings: Mitch's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Antony Walker
Executive Chairman16.58yrsUK£419.19k2.75%
£ 8.9m
Mitchell Flegg
CEO & Director3.33yrsUK£564.00k0.069%
£ 222.1k
Mike Killeen
Vice President of Operations3.17yrsno datano data
Danny Fewkes
Group Treasurer5.75yrsno datano data
Amanda Bateman
Company Secretary5.75yrsno datano data
Clara Altobell
Vice President of ESG & Business Innovationno datano datano data
Michael Renolds
Exploration Consultant of Indonesiano datano datano data

5.8yrs

Average Tenure

Experienced Management: SQZ's management team is seasoned and experienced (5.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Antony Walker
Executive Chairman16.58yrsUK£419.19k2.75%
£ 8.9m
Mitchell Flegg
CEO & Director3.33yrsUK£564.00k0.069%
£ 222.1k
Kate Coppinger
Independent Non-Executive Director0.92yrno datano data
Neil Pike
Senior Independent Directorno dataUK£50.00k0.12%
£ 385.3k
Ian Vann
Independent Non-Executive Director13.67yrsUK£50.00k0.10%
£ 322.6k
Trevor Garlick
Independent Non-Executive Director2.33yrsUK£50.00kno data
Malcolm Webb
Independent Non-Executive Director2.33yrsUK£50.00k0.024%
£ 77.7k

2.8yrs

Average Tenure

70.5yo

Average Age

Experienced Board: SQZ's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Serica Energy plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Serica Energy plc
  • Ticker: SQZ
  • Exchange: AIM
  • Founded: 2004
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Market Cap: UK£322.611m
  • Shares outstanding: 267.95m
  • Website: https://www.serica-energy.com

Number of Employees


Location

  • Serica Energy plc
  • H1 Building
  • Hill of Rubislaw
  • Aberdeen
  • Aberdeenshire
  • AB15 6BY
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SQZAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPJan 2004
A3PDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 2004
SQZZ.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 2004

Biography

Serica Energy plc, an upstream oil and gas company, engages in the identification, acquisition, exploration, and exploitation of oil and gas reserves. Its primary focus is on the production and development...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/03/03 20:14
End of Day Share Price2021/03/03 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.