21st Feb 2019 08:35
LONDON (Alliance News) - Centrica PLC on Thursday reported an increase in its annual profit and revenue but warned on the pressuring effects of the UK tariff caps on its 2019 results.
Centrica shares were trading down 11% at 121.85 pence each, the worst performer in the FTSE 100 index early Thursday.
For 2018, the energy company posted pretax profit of GBP575.0 million, significantly higher that the GBP137.0 million profit posted a year ago.
Adjusted pretax profit was in line with analysts consensus at GBP1.12 billion, 24% higher than the GBP901 million generated last year.
Revenue meanwhile rose to GBP29.69 billion from GBP28.04 billion, and adjusted operating profit increased 12% to GBP1.39 billion, just short of analysts' expectations which were set at GBP1.41 billion.
However, the British Gas owner described its 2018 performance as "mixed", with good financials but struggling volumes in its Spirit Energy and Nuclear units and a slow recovery in the firm's North America business.
"Our 2019 financial performance will be impacted by the UK default tariff cap and continuing lower volumes in Exploration & Production and Nuclear, meaning our 2018-20 target range for average adjusted operating cash flow is under some pressure," Chief Executive Officer Iain Conn said.
The company is targeting adjusted operating cash flow in the range GBP1.8 billion to GBP2.0 billion for 2019. Adjusted operating cash flow in 2018 stood at GBP2.25 billion, up 9% and within the company's targeted GBP2.1 billion to GBP2.3 billion range.
The energy firm also said it expects a like-for-like headcount reduction between 1,500 and 2,000 in 2019.
Furthermore, the company is targeting GBP500 million of non-core divestments including the sale of its US Clockwork Home Services business announced on Thursday.
Centrica sold Clockwork to Authority Brands, a home services franchise platform, for USD300 million.
"The disposal is in line with Centrica's intention to drive channel and brand rationalisation across the group, with a continued focus on the efficiency and effectiveness of those channels and Centrica's ability to offer a range of energy and services propositions through them," the company said.
Centrica declared a final dividend of 8.4 pence per share, giving an unchanged total payout of 12.0p.
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