Why Centrica’s investors are hoping for a Conn trick

IS Iain Conn, the chief executive of British Gas owner Centrica, feeling the heat? If he’s not already, he might be after this week’s annual results. City scribblers are forecasting bad news for the energy provider.

They reckon the mild weather over winter has meant lower energy consumption in the UK.

City broker Jefferies says that while residential gas volumes in November were about the same as the year before, December saw a 13 per cent drop. Those two months usually make up around a quarter of the UK’s annual consumption.

Centrica has also had to contend with lower oil prices in that period – which affects its oil production arm – and customers continuing to desert the company. Not to mention the energy price cap which Centrica has said will hit profits by £70 million.

Analysts at RBC Capital have a suggestion. They say the company should take the axe to its dividend, arguing that a cut to the payout is ‘inevitable’.

Conn might be able to keep it at 12p per share when the company reports on Thursday, but this year might be a step too far for the dividend, according to RBC.

THIS newspaper revealed in December that specialist equipment testing firm Spectris had been the subject of bid interest from private equity giants Bain Capital and Advent who were eying a joint bid worth around £3.5billion before the market jitters gave them cold feet.

Spectris’s annual results on Tuesday should remind investors why it remains attractive to potential buyers. Sales are expected to have risen 4 per cent in 2018 to £1.59 billion, with adjusted pre-tax profits also up a touch at £227 million.

If the FTSE250 company’s results disappoint investors and the shares fall, that might get suitors licking their lips at the prospect of a discount takeover.

CITY slickers brokering corporate deals have found themselves at the centre of the rumour mill. The long-awaited consolidation among small-cap stockbrokers finally appears to be taking place.

Shore Capital bought Stockdale Securities last week; Canaccord Genuity is said to have put its UK arm up for sale; while Daniel Stewart has folded. Rumours of a deal between Cenkos and N+1 Singer are just that and nothing more, I’m told.

The latest rumour to reach me is about a potential deal between Cenkos and Liberum, although other sources have dismissed the idea. More twists and turns will emerge over the next few weeks, I’m sure.