LSE:RRE

Stock Analysis Report

Executive Summary

RockRose Energy PLC operates as an independent oil and gas production company.

Rewards

Trading at 59.3% below its fair value

Earnings are forecast to grow 22.66% per year

Risk Analysis

Unstable dividend track record

Large one-off items impacting financial results

Profit margins (27.8%) are lower than last year



Snowflake Analysis

Excellent balance sheet and good value.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: RRE has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-9.5%

RRE

-0.3%

GB Oil and Gas

0.2%

GB Market


1 Year Return

226.2%

RRE

5.3%

GB Oil and Gas

12.3%

GB Market

Return vs Industry: RRE exceeded the UK Oil and Gas industry which returned 4.5% over the past year.

Return vs Market: RRE exceeded the UK Market which returned 12.7% over the past year.


Shareholder returns

RREIndustryMarket
7 Day-9.5%-0.3%0.2%
30 Day5.0%2.4%1.1%
90 Day9.6%1.0%7.2%
1 Year237.1%226.2%10.5%5.3%18.2%12.3%
3 Yearn/a27.0%10.7%23.2%7.5%
5 Yearn/a64.5%31.5%41.7%9.0%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RRE (£21.8) is trading below our estimate of fair value (£53.52)

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


Price To Earnings Ratio

PE vs Industry: RRE is poor value based on its PE Ratio (7.9x) compared to the Oil and Gas industry average (7.6x).

PE vs Market: RRE is good value based on its PE Ratio (7.9x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: RRE is overvalued based on its PB Ratio (4.1x) compared to the GB Oil and Gas industry average (0.7x).


Next Steps

Future Growth

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

22.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RRE's forecast earnings growth (22.7% per year) is above the savings rate (0.5%).

Earnings vs Market: RRE's earnings (22.7% per year) are forecast to grow faster than the UK market (11.7% per year).

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

Revenue vs Market: RRE's revenue (13% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: RRE's revenue (13% 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 RRE's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has RockRose Energy performed over the past 5 years?

54.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RRE has a large one-off loss of $22.9M impacting its June 30 2019 financial results.

Growing Profit Margin: RRE's current net profit margins (27.8%) are lower than last year .


Past Earnings Growth Analysis

Earnings Trend: RRE's earnings have grown significantly by 54.5% per year over the past 5 years.

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

Earnings vs Industry: RRE had negative earnings growth (-38.5%) over the past year, making it difficult to compare to the Oil and Gas industry average (24.4%).


Return on Equity

High ROE: RRE's Return on Equity (55.5%) is considered outstanding.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is RockRose Energy's financial position?


Financial Position Analysis

Short Term Liabilities: RRE's short term assets ($162.2M) exceed its short term liabilities ($73.9M).

Long Term Liabilities: RRE's short term assets ($162.2M) do not cover its long term liabilities ($389.8M).


Debt to Equity History and Analysis

Debt Level: RRE is debt free.

Reducing Debt: RRE has not had any debt for past 5 years.

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

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


Balance Sheet

Inventory Level: RRE has a high level of physical assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if RRE's debt is covered by short term assets.


Next Steps

Dividend

What is RockRose Energy's current dividend yield, its reliability and sustainability?

2.82%

Current Dividend Yield


Dividend Yield vs Market

company2.8%marketbottom25%1.8%markettop25%5.0%industryaverage5.3%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: RRE's dividend (2.58%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: RRE's dividend (2.58%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (21.3%), RRE's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of RockRose Energy's salary, the management and board of directors tenure and is there insider trading?

4.1yrs

Average board tenure


CEO

Peter Mann 0

0yrs

Tenure

0

Mr. Peter Mann serves as Managing Director at RockRose Energy PLC. He joined IGas Energy plc (“IGas”) in 2013 to assist in the implementation of the company’s core strategic aims. During his time at IGas h ...


Board Age and Tenure

4.1yrs

Average Tenure

61yo

Average Age

Experienced Board: RRE's board of directors are considered experienced (4.1 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUK£10,31031 Jul 19
Richard Benmore
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares526
Max PriceUK£19.60
BuyUK£99,47831 Jul 19
John Andrew Morrow
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares5,014
Max PriceUK£19.84
BuyUK£28,33826 Jul 19
John Andrew Morrow
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares1,517
Max PriceUK£18.69

Ownership Breakdown

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


Management Team

  • Andrew Austin (53yo)

    Executive Chairman

    • Tenure: 4.5yrs
    • Compensation: US$1.37m
  • Richard Slape (53yo)

    Chief Financial Officer

    • Tenure: 1yrs
  • Peter Mann

    Managing Director


    Board Members

    • Andrew Austin (53yo)

      Executive Chairman

      • Tenure: 4.5yrs
      • Compensation: US$1.37m
    • John Andrew Morrow (65yo)

      Non-Executive Director

      • Tenure: 4.1yrs
      • Compensation: US$67.00k
    • Richard Benmore (61yo)

      Non-Executive Director

      • Tenure: 4.1yrs
      • Compensation: US$77.02k

    Company Information

    RockRose Energy PLC's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: RockRose Energy PLC
    • Ticker: RRE
    • Exchange: LSE
    • Founded: 2015
    • Industry: Oil and Gas Exploration and Production
    • Sector: Energy
    • Market Cap: UK£260.155m
    • Shares outstanding: 13.07m
    • Website: https://www.rockroseenergy.com

    Number of Employees


    Location

    • RockRose Energy PLC
    • Dashwood House
    • 69 Old Broad Street
    • London
    • Greater London
    • EC2M 1QS
    • United Kingdom

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    RRELSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 2016
    RRELBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 2016

    Biography

    RockRose Energy PLC operates as an independent oil and gas production company. It primarily holds interests in the Galahad, Mordred, Galley, Ross and Blake, Halfweg, and Hanze projects in the United Kingdom and the Netherlands. The company was founded in 2015 and is based in London, the United Kingdom. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/22 22:11
    End of Day Share Price2020/01/22 00:00
    Earnings2019/06/30
    Annual Earnings2018/12/31


    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.