Scottish & Southern Energy Live Discussion

devonplay 12 Sep 2018

Sse warning PrefInvestor1: I do sometimes wonder if having 50 holdings makes yopu more likely to encounter these problems than running a concentrated portfolio with a smallish number of stocks There’s one advantage I find Prefs, I’m at 53 lines (my intention was 50 (30 IT’s, 10 ETF’s, 10 high potential stocks)), as I like to invest monthly I have a range of stocks to choose for my “top-ups”. That means I can slowly build a portflio and focus on specific areas that might have fallen into disfavour. It also means I can take my time to scale into a stock. That’s saved me many a rash decision! I now only invest from div income, so I’m taking on more risky positions as any othe capital can be invested off market for hopefully further diversification. This month I’ve bought NRR from August’s income and I’m hope to have enough cash left for IAPD and one other line. Although I’ve got cash calls coming up from 3 start-ups and ELM’s Rights. At least September is a bumper month of div’s for me. I run slightly larger positions, with a plan to broadly to have a range of £10k-£30k per line. I’ve almost completed this 10 year project that I started back in 2010 and just need round £40k of dividend over the next few years to have the final porfolio I’m looking for! The next stage will be AIM, I’m planning to find a job to finance this part, and create an annual portfolio of high growth stocks. My longterm obective is to be able to create a portfolio capable of delivering an internal rate of return of 25% per anum. Through a mixture of income, realisations and tax benefits. DL

PrefInvestor1 12 Sep 2018

Sse warning Hi @kool_keith and @pennyfarthing, well I was unsure about investing in this stock when I did what with the merger going on and general uncertainty overhanging utilities - all that is still there of course. And yes pennyfarthing I understand about limiting ones losses, but I have become more sanguine on that point of late in this falling market - if you arent careful you will end up just selling everything !. Dividend has been increased to 97.5p, though how they can afford that I dont know. Not short of cash obviously as still spending £1.7Bn on infrastructure this year it would seem ?. So I dont know, but will be holding for now. I have this strategy where I only put more than about £3,500 in something if I am REALLY CONFIDENT that its going to perform or come back. Thats not my feeling here right now so will not be averaging down (which of course if you get it wrong can just be throwing good money after bad). I have written at length on limiting the maximum size of ones holding to protect yourself against these kind of events. Todays drop has cost me ~£250 and actually I am only down £180 on the day so hopefully its working. I do sometimes wonder if having 50 holdings makes yopu more likely to encounter these problems than running a concentrated portfolio with a smallish number of stocks. Of course if one of those then goes wrong things get very painful very quickly, so on balance I am content with my approach. Not sure what will happen here, just planning to hold, hunker down and wait. Good luck if you average down - confess I would not do that myself. ATB Pref

Pennyfarthing 12 Sep 2018

Sse warning Pref I also am interested in your reaction. I invested at about the same time as you, I think - and it’s been a depressing tale since then. I’m more interested in income than growth, but there’s a limit to the amount of loss I’m prepared to sustain. Was considering cutting my losses - or at least some of them. Interested in other peoples thoughts.

Kool_Keith 12 Sep 2018

Sse warning Probably average down myself but would have to go a bit lower yet so in a way I hope it won’t get filled. I’m in NG but not CNA, good luck there.

PrefInvestor1 12 Sep 2018

Sse warning Hi @kool_keith, Yes I have a small holding here (thank goodness it is small, a 9% loss on a big holding would be very bad indeed !!). Not good news today, no option but to hold in this market methinks. ATB Pref

Kool_Keith 12 Sep 2018

Sse warning @PrefInvestor1 Hi Pref are you still invested here? Profit warning never good, but board ‘saying’ they still committed to 97.5p dividend…possible buying opportunity? “Regardless, the board said it continues to expect to recommend a full-year dividend of 97.5p per share for the full year and to deliver its promised five-year dividend plan”.

Hydrogen_Economy 06 Sep 2018

UK regulator sets energy price cap at 1,136 pounds a year SSE up around 1.7% on the announcement. The value is apparently at the lower end of the expected range but market seems to like removal of the uncertainty. H2 U.K. – 6 Sep 18 UK regulator sets energy price cap at 1,136 pounds a year Britain's regulator on Thursday proposed a price cap on default dual fuel energy bills of 1,136 pounds a year, which it hopes to implement by the winter, following a government promise to tackle "rip-off" prices.

El_Kel 30 Aug 2018

SSE merger with npower provisionally approved “The proposed household energy supply merger between “big six” players SSE and npower has been provisionally cleared by regulators.” “With more than 70 energy companies out there, we have found that there is plenty of choice when people shop around.” Sky News SSE merger with npower provisionally cleared by regulator An investigation finds competition will not be harmed by the planned tie-up, leaving the "big six" on track to become five.

Hydrogen_Economy 31 Jul 2018

Telegraph piece -Ofgem Plans to cut returns Who needs Corbyn to destroy returns, it’s already happening! Consumers will be able to thank Ofgem when the lights go out due to underinvestment. H2 The Telegraph Ofgem stands tough on energy network profits in blow to National Grid The energy regulator is standing by its plan to tighten the screws on energy networks while delivering a fresh blow to National Grid’s future earnings. he energy regulator is standing by its plan to tighten the screws on energy networks while delivering a fresh blow to National Grid’s future earnings. Despite outcry from the industry Ofgem will stick to its plan to slash the returns regulated energy firms can make from transmitting power from the high voltage national grid to smaller, regional networks. It will also force National Grid to dramatically cut the costs of work to connect the new Hinkley Point C nuclear power plant to the grid, signalling a tough road ahead for those taking on major power connection projects. …The change should help to save more than £5bn for household customers… Ofgem’s unrelenting stance sent National Grid shares tumbling on the FTSE 100. They fell by almost 2pc to 810.6p a share, and also knocked SSE shares by 0.8pc to £12.54 a share due to its growing exposure to network regulation.

PrefInvestor1 10 Jul 2018

Corbyn Blight Returns? Hi All, Well the recent political upheavals over Brexit and the threat to Teresa Mays government havent done utility shares any good over the last 48 hours. Down both yesterday and today having previously been on a slowly rising trend. I can only assume that holders are once again worried about the prospect of a General Election and the possible return of a Corbyn government ?. That seems pretty unlikely to me right now (but that’s only my opinion). In fact its my guess that if there were an election the Tories might well actually get in again with an increased majority. The current Parliament session wraps up for the summer on 24th July so unless there are major ructions in the next few days then TM will still be PM come September 4th. Maybe things will settle down over the recess, or maybe they wont ?. ATB Pref

El Kel 30 May 2018

SSE to raise prices "SSE to raise gas and electricity pricesSSE has become the last of the "big six" energy companies to announce early summer price rises, with a 6.7% average increase in gas and electricity bills.The move will see gas prices rise by 5.7% and electricity prices go up by 7.7% on 11 July for SSE customers on variable deals.This will mean an average £76 per year rise for 2.36 million customers."[link]

Baker2005 29 May 2018

Re: Limit Order @1385 Filled when did you last see Italians sort anything out , let alone quickly ... no - this one will run and run.

PrefInvestor1 29 May 2018

Limit Order @1385 Filled Hi All,So the speculative limit order that I set at 1385 was filled over lunch today. Was sitting watching the tennis with half an eye on my ipad watching the SSE share price perturbating just above my entry price, wondering whether it would get there. Of course its overshot now and at 1376, but you can never tell with these things can you. Happy to pickup the 66.3p divi which goes XD in July, so all up I reckon I'm in at 1396-66=1330 really. Not unhappy with that ATM. Had been looking strong prior to today.Just need the italians to sort themselves out a bit quick now. Going back to watching Rafa...ATBPref

Lupo di mare 26 May 2018

HL on SSE "The deal with npower owner innogy may seem surprising, but scratch the surface and the rationale for the deal becomes apparent. Customer numbers have been falling in SSE's Retail business, while political pressure on energy providers has been growing from MPs in both the blue and red corners.Standard variable tariffs have incurred particular wrath, and SSE has the highest percentage of customers on SVTs of any of the big players. Should the deal go ahead, the combined SSE and npower group would have around 12.7m customers. That would give it increased scale and a sharper retail focus. Significant cost synergies should be available too. For the Retail business then, we feel the deal makes sense.The question is, where does that leave investors?What remains of SSE will have a higher percentage of profits from regulated activities. For a business that wants to churn out a reliable dividend, that's no bad thing. SSE is confident of paying out at least 80% of its pre-split dividend after the demerger. That implies investors will get a prospective yield of around 5.6%, plus any income the new listing pays (NOTE).However, splitting off the Retail business will remove a valuable source of cash flow. This is important as the regulated parts of the business, while capable of delivering reliable revenues, require significant ongoing investment. In recent times, SSE hasn't always generated enough cash to cover both these outgoings and the dividend. That's seen debts rise. Not a problem in the immediate term, but the group won't be able to leverage up its balance sheet forever. The split hasn't changed our fundamental view of SSE. It needs to improve cash flows if it's to shake off nagging concerns over the stability of the dividend."Well SSE is well aware of all of that. I'm happy holding.

Lagav16 25 May 2018

Re: Dividend to fall to 80.0p -2019/2020 This is a company loaded with debt (admittedly, fairly cheap debt) that has been paying out more than it should have been for far too long; the dividend should have been re-based years ago.I sold out at c£16 a while ago and have been very tempted to re-enter on many occasions due to the payout, but it has never looked sustainable - at least when BP and RDSB's payout ratios were too high it was possible to have faith that they would improve when the POO did (as thankfully, has been the case). SSE, with its regulator-controlled pricing, clearly has less scope for better profitability and debt paydown.