Centrica shares jump as British Gas owner eyes £1BN cash pile

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Centrica tops FTSE 100 risers as owner of British Gas sees £1bn in cash as energy prices rise

  • Centrica benefits from high energy prices despite tight UK gas margins
  • It now expects full-year adjusted earnings per share of ‘above 30 pence’
  • Centrica also now expects net cash flow to exceed £1 billion by 2022

Centrica shares were among the biggest gainers on the FTSE 100 early Thursday after the company revealed it expects to close the financial year with more than £1bn in net cash.

The owner of British Gas told investors ahead of its preliminary results on Feb. 16 that its strong operating performance had maintained momentum since the last update in November, while “infrastructure asset availability and volumes have remained good.”

Centrica Shares were up 5.4 percent to 96.74p in early trading, after rising 33 percent over the past 12 months, before easing again to rise 4.84 percent from 96.24p at 1:30 p.m.

The company now expects full-year adjusted earnings per share of “more than 30 pence,” a significant increase from analysts’ forecast of 15.1 pence to 26 pence in early November.

Centrica has benefited from higher energy prices despite tight margins within British Gas

According to UBS, market consensus prior to the trade update pointed to annual earnings per share of 24.7 pence, with a net cash position of £1.15 billion.

The group’s share price lifted in November when Centrica revealed the extent to which it had benefited from skyrocketing energy prices and launched a £250m buyback scheme.

Performance was driven by its energy trading business and gas and power generation assets, which offset pressured UK gas margins.

Inflation and economic pressures have hit costs and customer numbers in British Gas Services and Solutions, while warmer weather in the third quarter also weighed on retail sales.

The company said on Thursday, “Centrica has continued to deliver strong operational performance from its balanced portfolio.

“Infrastructure asset availability and volumes have remained good, and we delivered strong optimization performance incrementally.

As a result, we currently expect full-year 2022 adjusted earnings per share in excess of 30 pence. Cash generation was also good, and we expect net cash flow to exceed £1 billion by 2022.”

In addition to the unscheduled trading update, Centrica revealed that chief financial officer and executive director Kate Ringrose would step down at the end of February.

Ringrose, who has worked at Centrica for nearly 20 years, will be replaced in both roles from March by former Group Treasurer at Shell Russell O’Brien.

She is expected to remain with Centrica “by the end of 2023” to ensure “an orderly transition,” the company said.

Chief Executive Chris O’Shea, Chief Executive of Centrica Group, said: “Centrica has made significant progress over the past three years and is now more efficient and competitive.

“We have a focused portfolio of complementary companies with a transformed balance sheet, and we are now well placed to drive growth across the portfolio and deliver better shareholder returns.

“Russell’s broad energy value chain experience, including roles as global CFO for both Shell’s Integrated Gas and Retail businesses, will be a tremendous asset to Centrica as we aim to accelerate shareholder value creation while helping to decarbonise the energy system.” to make.’