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SQZ

Serica EnergyAIM:SQZ Stock Report

Market Cap

UK£559.3m

7D

11.0%

1Y

111.7%

Updated

26 Sep, 2021

Data

Company Financials +
SQZ fundamental analysis
Snowflake Score
Valuation1/6
Future Growth2/6
Past Performance1/6
Financial Health5/6
Dividends2/6

SQZ Overview

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

Serica Energy Competitors

Energean

LSE:ENOG

UK£1.5b

Cairn Energy

LSE:CNE

UK£893.9m

Tullow Oil

LSE:TLW

UK£681.8m

Seplat Petroleum Development

LSE:SEPL

UK£528.3m

Price History & Performance

Summary of all time highs, changes and price drops for Serica Energy
Historical stock prices
Current Share PriceUK£2.09
52 Week HighUK£0.90
52 Week LowUK£2.12
Beta1.16
1 Month Change35.74%
3 Month Change55.60%
1 Year Change111.68%
3 Year Change140.76%
5 Year Change1,376.11%
Change since IPO103.41%

Recent News & Updates

Shareholder Returns

SQZGB Oil and GasGB Market
7D11.0%4.0%0.6%
1Y111.7%58.9%24.1%

Return vs Industry: SQZ exceeded the UK Oil and Gas industry which returned 58.9% over the past year.

Return vs Market: SQZ exceeded the UK Market which returned 23.4% over the past year.

Price Volatility

Is SQZ's price volatile compared to industry and market?
SQZ volatility
SQZ Beta1.16
Industry Beta1.22
Market Beta1

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.

About the Company

FoundedEmployeesCEOWebsite
2004153Mitch Flegghttps://www.serica-energy.com

Serica Energy plc, an upstream oil and gas company, engages in the identification, acquisition, exploration, and exploitation of oil and gas reserves. The company holds 100% interest in the Keith oil fields; 98% interest in the Bruce gas fields; and 50% interest in the Rhum gas fields located in the Northern North Sea, as well as 18% non-operating interest in the Erskine field located in Central North Sea. It also operates the Columbus development, and Skerryvore and Ruvaal prospects located in Central North Sea; and North and South Eigg exploration prospects located in the Northern North Sea.

Serica Energy Fundamentals Summary

How do Serica Energy's earnings and revenue compare to its market cap?
SQZ fundamental statistics
Market CapUK£559.25m
Earnings (TTM)UK£7.78m
Revenue (TTM)UK£125.64m

71.9x

P/E Ratio

4.5x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
SQZ income statement (TTM)
RevenueUK£125.64m
Cost of RevenueUK£128.56m
Gross Profit-UK£2.92m
Expenses-UK£10.70m
EarningsUK£7.78m

Last Reported Earnings

Dec 31, 2020

Next Earnings Date

Sep 28, 2021

Earnings per share (EPS)0.029
Gross Margin-2.32%
Net Profit Margin6.19%
Debt/Equity Ratio0.0%

How did SQZ perform over the long term?

See historical performance and comparison

Dividends

1.7%

Current Dividend Yield

120%

Payout Ratio

Valuation

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

14.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SQZ (£2.09) is trading below our estimate of fair value (£2.43)

Significantly Below Fair Value: SQZ is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SQZ is poor value based on its PE Ratio (71.9x) compared to the UK Oil and Gas industry average (11.8x).

PE vs Market: SQZ is poor value based on its PE Ratio (71.9x) compared to the UK market (23.4x).


Price to Earnings Growth Ratio

PEG Ratio: SQZ is poor value based on its PEG Ratio (70.7x)


Price to Book Ratio

PB vs Industry: SQZ is overvalued based on its PB Ratio (2.8x) compared to the GB Oil and Gas industry average (1.1x).


Future Growth

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

1.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SQZ's forecast earnings growth (1% per year) is above the savings rate (0.9%).

Earnings vs Market: SQZ's earnings (1% per year) are forecast to grow slower than the UK market (13.3% per year).

High Growth Earnings: SQZ's earnings are forecast to grow, but not significantly.

Revenue vs Market: SQZ's revenue (7.8% per year) is forecast to grow faster than the UK market (5.4% per year).

High Growth Revenue: SQZ's revenue (7.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SQZ's Return on Equity is forecast to be low in 3 years time (17%).


Past Performance

How has Serica Energy performed over the past 5 years?

38.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SQZ has a large one-off gain of £31.3M impacting its December 31 2020 financial results.

Growing Profit Margin: SQZ's current net profit margins (6.2%) are lower than last year (25.6%).


Past Earnings Growth Analysis

Earnings Trend: SQZ's earnings have grown significantly by 38% per year over the past 5 years.

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 (-87.8%) over the past year, making it difficult to compare to the Oil and Gas industry average (1.3%).


Return on Equity

High ROE: SQZ's Return on Equity (3.9%) is considered low.


Financial Health

How is Serica Energy's financial position?


Financial Position Analysis

Short Term Liabilities: SQZ's short term assets (£135.3M) exceed its short term liabilities (£95.4M).

Long Term Liabilities: SQZ's short term assets (£135.3M) do not cover its long term liabilities (£152.2M).


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


Dividend

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

1.68%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SQZ's dividend (1.68%) is higher than the bottom 25% of dividend payers in the UK market (1.34%).

High Dividend: SQZ's dividend (1.68%) is low compared to the top 25% of dividend payers in the UK market (3.93%).


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 high payout ratio (120.4%), SQZ's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SQZ's dividends in 3 years are forecast to be thoroughly covered by earnings (13.5% payout ratio).


Next Steps

Management

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

5.0yrs

Average management tenure


CEO

Mitch Flegg (61 yo)

3.83yrs

Tenure

UK£521,000

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 ($USD712.20K) is about average for companies of similar size in the UK market ($USD967.82K).

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


Leadership Team

Experienced Management: SQZ's management team is seasoned and experienced (5 years average tenure).


Board Members

Experienced Board: SQZ'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: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

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


Top Shareholders

Company Information

Serica Energy plc's 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£559.252m
  • Shares outstanding: 268.23m
  • 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


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/09/26 17:54
End of Day Share Price2021/09/24 00:00
Earnings2020/12/31
Annual Earnings2020/12/31


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.