H MORRIS | EVOLUTION
Centrica says the deal strengthens its energy hedge ie reduces a structural short. Centrica’s desire to improve its energy hedge would suggest it doesn’t see commodity prices going lower and therefore the implication is that the value of North Sea assets are the very least underpinned at these levels.
JONATHAN JACKSON | KILLIK
The deal will be immediately accretive to earnings. The strength of the group’s balance sheet – gearing is currently 1x net debt/ebitda and will rise to 1.3x – provides the firepower for such deals. At a time of severe market turbulence, its financial strength and 5.5 per cent dividend yield make it a relatively safe haven.
ANGELOS ANASTASIOU | INVESTEC
We believe these are good moves that will underpin its position both upstream and downstream. Confidence still needs to be regained in the UK supply market – but we believe the share price now factors in unreasonably pessimistic scenarios on the supply side, while Centrica has strong cashflow, good earnings growth, and undemanding multiples.