SSE lifted to overweight ...

[Bouleversee]

...by Morgan Stanley, according to ADVFN's morning market bulletin today.

Can anyone explain why, with the threat of an election and possible labour govt. looming?

[dspp]

Maybe they are calculating that it may be broken up and sold off at a premium to current market cap.
- dspp

[TheMotorcycleBoy]

...by Morgan Stanley, according to ADVFN's morning market bulletin today.

Can anyone explain why, with the threat of an election and possible labour govt. looming?

IDK, but the polls suggest fear of a labour govt. is ill-founded.

https://britainelects.com/polling/westminster/
https://www.politico.eu/europe-poll-of- ... d-kingdom/

[PeterGray]

Or they reckon the risk of Brexit, or at least a no deal one is receeeding, which would benefit the economy and energy producers?

[Dod101]

From the reports that I can find, Morgan Stanley thinks that the removal of the retail arm and the development of renewables, plus an increase in power prices (outside of the retail price cap) will produce the goods. They have raised their target price from 1255p all the way to 1290p which I am afraid is more or less market noise anyway.

No comment on their rather stretched finances as far as I can see.

Re the political risk, even if Corbyn was able to form a government, I rather think that he will have to concentrate on more pressing matters than his political aims at least in the short term.

I will disregard MG's comments. Do not currently hold SSE and will not be buying in.

Dod

[richfool]

I shall abdicate my view on SSE to the managers of EGL (Ecofin Global Utilities & Infrastructure trust) which I hold and whose portfolio has a holding of 2.8% in SSE.

[Dod101]

I do not think anyone has reported the RNS this morning from SSE re the sale of the retail business. This can only be good news for holders of SSE surely. I am not one.

sidehttps://otp.investis.com/clients/uk ... id=1328724

I have not checked if this link works.

Dod

[AJC5001]

I do not think anyone has reported the RNS this morning from SSE re the sale of the retail business. This can only be good news for holders of SSE surely. I am not one.

sidehttps://otp.investis.com/clients/uk ... id=1328724

I have not checked if this link works.

Dod

Link didn't work for me - says it needs an app!

Try https://www.investegate.co.uk/sse-plc--sse-/rns/agreement-to-sell-sse-energy-services-to-ovo/201909130700082451M/

Adrian

[Dod101]

Thanks Adrian. At the time I did not have time to check it.

Anyway that has of course been planned for a long while and is surely a positive for SSE as it relieves them of a thorn in their side, gives them some cash (£400 million or so) plus a loan note for another £100 million. Normally that would all be positive but given the uncertain political situation with utilities.......

Dod

[PrefInvestor]

Hi All, Been a while since I held SSE (they were £13+ then......). Dont I remember that the original plan was to sell the retail business for quite as lot more than the £500M they just agreed with Ovo ?. And what will all this do to the companies treasured dividend I wonder ?. I remember being concerned about this when they were planning to merge with nPower. Any cut would not be well received by the market I reckon. The Ovo sale seems to have lifted the SP a bit so maybe its a positive I really dont know.

I got out of utilities a long time ago..........(and banks and REITs and housebuilders). Im mainly in ITs and ETFs these days, though I guess these have some holdings in some of those sectors.

ATB

Pref

[tjh290633]

If you recall the original plan was to merge the retail side with Npower, and give the shareholders the appropriate number of shares in the merged company. By selling the retail side, the money stays with the existing company. The shareholders have also avoided getting another holding which they might prefer not to have.

The entrails suggest that the retail side is the weaker vessel, so the outcome would appear to be beneficial. Reducing debt is preferable to both share buy-backs or special dividends.

TJH

[AJC5001]

Hi All, Been a while since I held SSE (they were £13+ then......). Dont I remember that the original plan was to sell the retail business for quite as lot more than the £500M they just agreed with Ovo ?. And what will all this do to the companies treasured dividend I wonder ?. I remember being concerned about this when they were planning to merge with nPower. Any cut would not be well received by the market I reckon. The Ovo sale seems to have lifted the SP a bit so maybe its a positive I really dont know.

Pref

Regarding the dividend, the investegate link has the following :-

"SSE's commitment to remunerating shareholders

SSE's financial strategy remains the same with the Board of SSE committed to remunerating shareholders' investment and fully focused on delivery of the remaining four years of its five-year dividend plan to March 2023. It still intends to recommend a full year dividend of 80 pence per share in respect of the financial year ending 31 March 2020 and is targeting annual increases that keep pace with RPI for the three years after that, to March 2023."

It is always possible that they cannot meet their commitment

Adrian

[PrefInvestor]

Regarding the dividend, the investegate link has the following :-

"SSE's commitment to remunerating shareholders

SSE's financial strategy remains the same with the Board of SSE committed to remunerating shareholders' investment and fully focused on delivery of the remaining four years of its five-year dividend plan to March 2023. It still intends to recommend a full year dividend of 80 pence per share in respect of the financial year ending 31 March 2020 and is targeting annual increases that keep pace with RPI for the three years after that, to March 2023."

It is always possible that they cannot meet their commitment
Adrian

Hi Adrian, The SSE total dividend for 2019 is 97.5p this year (I think) so 80p is ~18% less. Guessing no other change for shareholders as a result of the Ovo deal ?. If so thats going to reduce the yield from its somewhat stellar 8.x% ATM to more like ~6.8% ?. Might put some HYPers off ?.

ATB

Pref

[PinkDalek]

The discussion of the SSE disposal of SSE Energy Services to OVO and the announcement on Friday the Thirteenth continues over at:

Company Share news (LSE Main Market)
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