24th Feb 2022 10:58
(Alliance News) - Centrica PLC on Thursday reported a healthy return to profit in 2021 with the company promising dividends in the near future after dealing with a hefty pension deficit.
Centrica shares were down 2.5% to 73.90 pence each in London on Thursday.
The Windsor, Berkshire-based energy and services company reported pretax profit of GBP1.17 billion in 2021, swinging from GBP117 million loss a year before.
The British Gas-owner posted revenue of GBP14.74 billion, up 20% from GBP12.25 billion.
"Our strong balance sheet and responsible business model has allowed us to ensure continued supply for customers whose suppliers have ceased trading and offer additional help to those most vulnerable through the ongoing energy crisis. 2021 financial performance was resilient, and we continue to make good progress towards the turnaround of Centrica, having materially completed our portfolio simplification," Chief Executive Chris O'Shea said.
Centrica did not declare any dividends for the year, unchanged from the year before. But the company did say that it has a clear path towards the revival of dividends.
"We remain focused on delivering shareholder returns. Although no 2021 final dividend is being proposed, the balance sheet is in a much stronger position reflecting our divestments and our continued focus on free cash flow generation. With triennial pension negotiations due to conclude in the first half of 2022, we should soon be in a position to restart paying a dividend out of our adjusted earnings and free cash flow," Centrica said.
Centrica is currently in negotiations with pension trustees after hitting a net pension deficit of GBP601 million at the end of 2020. At December 31, 2021 the company was not in any pension deficit and said talks with the trustees are proceeding constructively with an agreement expected in the first half of this year.
"2022 outlook broadly positive. Strong balance sheet and leading energy procurement and risk management capabilities leave us well placed to handle the energy market crisis," the company said.
Centrica's focus remains on improving operational performance, "in particular customer service levels".
By Greg Roxburgh; [email protected]
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