Jefferies has reiterated its 'buy' recommendation for Serica Energy PLC (AIM:SQZ) with a share price target of 340p.
The current price stands at 244p, up 1%, and the bank remains optimistic about the company's financials and growth, particularly following the £367mln acquisition of Tailwind Energy.
Serica Energy's full-year results were largely in line with Jefferies' estimates, showcasing a net profit of £178m, which is 5% lower than the predicted £188m. Net cash for the year-end was £457m, 2% less than Jefferies' estimate of £464m.
These results came before the Tailwind deal, which has the potential to boost the company's financials further.
Completed in March, it has already impacted Serica Energy's production guidance for 2023. Production is expected to range between 40-47,000 barrels a day, a 66% year-over-year increase at the mid-point, primarily due to the inclusion of central North Sea producer. The combined company's net production averaged 46,800 daily barrels in the first quarter of the new year.
In another significant development, Tony Craven Walker, chairman of Serica Energy, is set to step down from his position at the AGM. Having served for 18 years since the company's formation in 2004, Craven Walker has been instrumental in guiding the company through numerous accretive deals, creating long-term value and growth for Serica, Jefferies acknowledged.