Two FTSE 100 Stocks In Focus – SSE and BARC

SSE Plc

SSE Plc (SSE) is an energy company that is involved in the production, distribution and supply of electricity and gas as well as other energy-related services to residential, commercial and industrial areas in Great Britain and Ireland. SSE has a group of retail segments. It distributes electricity and gas to business, commercial and public sector customers in Great Britain and supplies electricity and gas and related services to customers across the island of Ireland. The company’s business segments include the Networks Segment – which is involved in the distribution of electricity, transmission of electricity and the distribution of gas, the Retail Segment where the company engages in energy and electricity supply throughout the United Kingdom and Ireland, support services for electricity and energy and Wholesale Segment which is involved in the management of a huge portfolio of electricity generation, storage and warehousing and gas production.

SSE Latest News and Trading Update

On 20th September 2019, the company made a press release regarding one of its projects, Seagreen Phase 1 offshore, is set to be awarded a contract for low carbon power after being successful in UK’s third contract for difference allocation round. The project has successfully secured a contract for 15 years for a 454MW project at a price of £41.61 per Megawatt Hour (in 2012 prices) in auction delivery year 2024/25. After the period of 15 years, the project will remain an essential asset with huge earning capacity. The capacity of the contract is a denotes 42 per cent of the capacity of the total project, albeit SSE Renewables is planning to develop the entire 1,075MW.

In another press release on 20th September 2019, one of the other SSE renewables’ subsidiary, in which SSE has a 50 per cent stake as a part of a Joint Venture with Equinor, Dogger Bank Wind Farms, was successfully awarded three contracts with a total capacity of 3600 MW in the third allocation round of UK’s Contract for Difference (CfD). This includes a CfD of 1200MW for delivery in 2023-24 at the price of £39.65 per Megawatt Hour for Dogger Bank Creyke Beck A, another CfD of 1200MW for delivery in 2024-25 at the price of £41.61 Megawatt Hour for Dogger Bank Creyke Beck B and a CfD for delivery in 2024-25 for Dogger Bank Teesside A for 1200MW at a price of £41.61 per Megawatt Hour.

On 18th July 2019, the company presented a trading update. The company in a financial outlook for 2019/20 mentioned that in spite of a below expectation renewable energy output in the three months to 30th June with the deficit in the production equalling to less than 4 per cent of the annual forecast, the outlook for the full-year adjusted operating profit across a number of SSE’s divisions would stay the same. It further added that the company’s belief in sustainable dividends would stay put with an expected full-year dividend to be at GBX 80 per share as per the guidance set out in May 2019.

SSE Share Performance

On 1st October 2019, at 08:05 AM GMT, while writing, SSE stock traded at GBX 1248.50 per share; an increase of 0.24 per cent or GBX 3.00 in comparison with the previous day’s closing price at GBX 1245.5 per share. While writing, SSE Plc traded 1.03 per cent below its 52-week high at GBX 1261.50 set on September 30, 2019. The company’s Market Capitalisation was GBP 12.95 billion.

283,220 stocks of the company have been traded by the time of writing. The average volume of trading per day for last one year has been 4.31 million. The stock has surged by 10.73 per cent in the previous one year from the price of GBX 1127.5 per share.

The beta of the stock was at 0.6311, showing that the share price movement is less volatile compared to the benchmark market index.

Barclays Plc

Barclays Plc (BARC) is a United Kingdom based Banking and Financial Services company, that primarily focuses on providing Retail, Corporate, Merchant and Investment Banking services across the world. The company also provides Wealth management as well as Investment Management services to its retail clients. The company is headquarters in London with a presence in countries all across the world. Geographically, the company has two separate segments which are Barclays UK and Barclays International. The two divisions operate as Barclays Bank UK Plc and Barclays Bank Plc, with another Barclays service limited, which is a group service company that provides critical infrastructure and operational support to the other business divisions and also engages in the provision of services such as management of fraud, Cyber Security and reduction in the duplication of work. Barclays Bank UK Plc includes four divisions, which are Local Consumer, Small Business, United Kingdom Wealth and the Credit Card business, which mostly serve the individual customers, High Net-worth Individual clients and small businesses.

BARC latest news

On 9th September 2019, the company made a press release to provide an update on its provision regarding the Payment Protection Insurance (PPI) claims redressal. Payment Protection Insurance was a policy started to be sold in the 1990s by the UK Banks, for the purpose of repayment of borrowings, for people whose income had stopped on being sick or losing their jobs. Banks had aggressively sold these policies at a low rate until there were complaints, and it was found that PPI was expensive, ineffective, mis-sold and inefficient. As per the announcement made, the company had made provisions of £9.6 billion in relation to the claims made by the people for PPI to 30 June 2019, with utilisations totalling to a £9.2 billion. The company also reported that post the interim results, Barclays had received significantly higher number of claims and that, Barclays will maintain provisions between £1.2 to £1.6 billion at the time it reports its Q3 2019 results subject to investigations and the quality of the claims.

BARC Financial Performance (Interim results for the half-year ended 30 June 2019)

On 1st August 2019, Barclays Plc announced its interim results for the half-year ended 30 June 2019. The company reported a decrease in the total income by 1 per cent year on year to £10.79 billion in H1 2019 from £10.93 billion in H1 2018. This was driven by margin compressions and a reduction in risk appetite towards the credit card business. The group’s profit before tax (PBT) was reported at £3.0 Billion in H1 201, a sharp 82 per cent year on year increase from the Profit before tax in the first half of 2018 at £1.66 Billion. Attributable profit was also up to £2.07 billion in H1 2019, as compared to £561 million in the first half of 2018, a growth of 269.34 per cent year on year. Return on Tangible Equity (RoTE) was up to 9.4 per cent in H1 2019 from 11.6 per cent in H1 2018. The company continue to target a RoTE of more than 9 per cent in 2019 and more than 10 per cent in 2020. The company has also announced an interim dividend of GBX 3.0 per share which was paid on 23rd September 2019.

Barclays is one of the biggest and most significant banking companies in the United Kingdom and hence, there is an anticipation that they will have a big impact from Brexit. To mitigate any risk that might be arising, the company has been expanding its operations through an existing subsidiary Barclays Bank Ireland which will allow them to continue their services when UK exits the European Union and to face any challenges from the arising economic difficulties.

BARC Share Performance

On 1st October 2019, at 08:15 AM GMT, while writing, BARC stock traded at GBX 151.66 per share; an increase of 0.84 per cent or GBX 1.26 in comparison with the previous day’s closing price at GBX 150.40 per share. While writing, Barclays Plc traded 15.74 per cent above its 52-week low at GBX 131.04, set on September 12, 2019. The company’s Market Capitalisation was GBP 25.96 billion.

1.42 million stocks of the company have been traded by the time of writing. The average volume of trading per day for last one year has been 35.95 million. The stock has plunged by 12.03 per cent in the previous one year from the price of GBX 172.4 per share.

The beta of the stock was at 0.8482, showing that the share price movement is less volatile compared to the benchmark market index.