Seplat Energy (LSE:SEPL) - Share price, News & Analysis

SEPL fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	4/6
Past Performance	4/6
Financial Health	5/6
Dividends	4/6

SEPL Stock Overview

Seplat Energy Plc engages in the oil and gas exploration and production, and gas processing activities in Nigeria.

Rewards

Trading at 33.6% below our estimate of its fair value

Earnings are forecast to grow 24.37% per year

Risk Analysis

Unstable dividend track record

Seplat Energy Competitors

Harbour Energy

LSE:HBR

UK£3.9b

Energean

LSE:ENOG

UK£2.4b

Diversified Energy

LSE:DEC

UK£1.0b

Serica Energy

AIM:SQZ

UK£841.0m

Price History & Performance

Summary of all time highs, changes and price drops for Seplat Energy
Historical stock prices
Current Share Price	UK£1.18
52 Week High	UK£1.39
52 Week Low	UK£0.68
Beta	0.72
1 Month Change	-5.62%
3 Month Change	25.00%
1 Year Change	25.00%
3 Year Change	0.21%
5 Year Change	49.21%
Change since IPO	-44.58%

Shareholder Returns

	SEPL	GB Oil and Gas	GB Market
7D	-7.5%	0.3%	-0.4%
1Y	25.0%	22.2%	-3.0%

Return vs Industry: SEPL exceeded the UK Oil and Gas industry which returned 23% over the past year.

Return vs Market: SEPL exceeded the UK Market which returned -2.7% over the past year.

Price Volatility

Is SEPL's price volatile compared to industry and market?
SEPL volatility
SEPL Average Weekly Movement	8.6%
Oil and Gas Industry Average Movement	9.5%
Market Average Movement	6.0%
10% most volatile stocks in GB Market	11.6%
10% least volatile stocks in GB Market	3.1%

Stable Share Price: SEPL is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: SEPL's weekly volatility (9%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2009	532	Roger Brown	https://www.seplatenergy.com

Seplat Energy Plc engages in the oil and gas exploration and production, and gas processing activities in Nigeria. It generates hydrocarbon through seven oil and gas blocks in the Niger Delta region. The company also engages in the renewable energy generation activities.

Seplat Energy Fundamentals Summary

How do Seplat Energy's earnings and revenue compare to its market cap?
SEPL fundamental statistics
Market Cap	US$859.15m
Earnings (TTM)	US$122.62m
Revenue (TTM)	US$822.58m

7.0x

P/E Ratio

1.0x

P/S Ratio

Is SEPL overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SEPL income statement (TTM)
Revenue	US$822.58m
Cost of Revenue	US$472.83m
Gross Profit	US$349.75m
Other Expenses	US$227.13m
Earnings	US$122.62m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.21
Gross Margin	42.52%
Net Profit Margin	14.91%
Debt/Equity Ratio	43.7%

How did SEPL perform over the long term?

See historical performance and comparison

Dividends

6.8%

Current Dividend Yield

47%

Payout Ratio

Valuation

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

Valuation Score

6/6

Valuation Score 6/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

33.6%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: SEPL (£1.18) is trading below our estimate of fair value (£1.77)

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

Price To Earnings Ratio

PE vs Industry: SEPL is good value based on its Price-To-Earnings Ratio (7x) compared to the UK Oil and Gas industry average (10.4x).

PE vs Market: SEPL is good value based on its Price-To-Earnings Ratio (7x) compared to the UK market (15.4x).

Price to Earnings Growth Ratio

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

Price to Book Ratio

PB vs Industry: SEPL is good value based on its Price-To-Book Ratio (0.5x) compared to the GB Oil and Gas industry average (1x).

Future Growth

How is Seplat Energy forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

24.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SEPL's forecast earnings growth (24.4% per year) is above the savings rate (0.9%).

Earnings vs Market: SEPL's earnings (24.4% per year) are forecast to grow faster than the UK market (11.3% per year).

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

Revenue vs Market: SEPL's revenue (8.6% per year) is forecast to grow faster than the UK market (4% per year).

High Growth Revenue: SEPL's revenue (8.6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: SEPL's Return on Equity is forecast to be low in 3 years time (9.5%).

Past Performance

How has Seplat Energy performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-1.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SEPL has high quality earnings.

Growing Profit Margin: SEPL's current net profit margins (14.9%) are higher than last year (6.9%).

Past Earnings Growth Analysis

Earnings Trend: SEPL has become profitable over the past 5 years, growing earnings by -1.5% per year.

Accelerating Growth: SEPL's earnings growth over the past year (220.3%) exceeds its 5-year average (-1.5% per year).

Earnings vs Industry: SEPL earnings growth over the past year (220.3%) underperformed the Oil and Gas industry 344.7%.

Return on Equity

High ROE: SEPL's Return on Equity (6.5%) is considered low.

Financial Health

How is Seplat Energy's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: SEPL's short term assets ($750.5M) exceed its short term liabilities ($487.0M).

Long Term Liabilities: SEPL's short term assets ($750.5M) do not cover its long term liabilities ($1.7B).

Debt to Equity History and Analysis

Debt Level: SEPL's net debt to equity ratio (25.6%) is considered satisfactory.

Reducing Debt: SEPL's debt to equity ratio has reduced from 51.9% to 43.7% over the past 5 years.

Debt Coverage: SEPL's debt is well covered by operating cash flow (72.1%).

Interest Coverage: SEPL's interest payments on its debt are well covered by EBIT (4.4x coverage).

Balance Sheet

Dividend

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

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

6.80%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: SEPL's dividend (6.8%) is higher than the bottom 25% of dividend payers in the UK market (1.78%).

High Dividend: SEPL's dividend (6.8%) is in the top 25% of dividend payers in the UK market (4.85%)

Stability and Growth of Payments

Stable Dividend: SEPL has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: SEPL has only been paying a dividend for 8 years, and since then payments have fallen.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (47.5%), SEPL's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (15.3%), SEPL's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

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

2.9yrs

Average management tenure

CEO

Roger Brown (51 yo)

1.75yrs

Tenure

US$2,741,000

Compensation

Mr. Roger Thompson Brown has been the Chief Executive Officer of Seplat Energy Plc (formerly known as Seplat Petroleum Development Company Plc) since August 01, 2020. Mr. Brown served as the Chief Financia...

CEO Compensation Analysis

Compensation vs Market: Roger's total compensation ($USD2.74M) is above average for companies of similar size in the UK market ($USD1.39M).

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

Leadership Team

Experienced Management: SEPL's management team is considered experienced (2.9 years average tenure).

Board Members

Experienced Board: SEPL's board of directors are not considered experienced ( 2.3 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: SEPL 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.

Data	Last Updated (UTC time)
Company Analysis	2022/05/24 00:00
End of Day Share Price	2022/05/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31