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TOP NEWS: Centrica ups dividend by third as British Gas profit soars

15th Feb 2024 08:58

(Alliance News) - Centrica PLC on Thursday rewarded shareholders with a dividend boost despite a decline in underlying earnings.

The Windsor, England-based owner of British Gas returned to profit in 2023 at the statutory level with a pretax figure of GBP6.47 billion compared to a pretax loss of GBP383 million in 2022. The figure for 2023 included exceptional items of GBP3.76 billion.

Operating profit fell to GBP2.75 billion from GPP3.31 billion, reflecting improved profit at its British Gas retail arm, but a worse performance in its optimisation and infrastructure businesses.

Annual profit at British Gas multiplied to GBP799 million from GBP94 million aided by the regulator allowing energy companies to recoup costs incurred during the energy crisis.

Optimisation adjusted operating profit nearly halved to GBP774 million from GBP1.40 billion the year before hit by lower prices and volatility in commodity markets.

Infrastructure adjusted operating profit fell 40% to GBP1.08 billion from GBP1.79 billion, including a GBP326 million hit from the introduction of the electricity generator levy in the UK.

Centrica said group revenue rose 11% to GBP26.46 billion in 2023 from GBP23.74 billion the year before, with diluted earnings per share of 70.6p compared to loss per share of 13.3p.

Free cash flow declined to GBP2.21 billion from GBP2.49 billion.

The annual dividend was increased by 33% to 4.0 pence per share from 3.0p, including a final payout of 2.67p, up from 2.00p the year before.

Centrica said its GBP1 billion share buyback programme is expected to run to July 2024. As at February 14, it had bought back GBP727 million of shares since the start of the programme.

Chief Executive Chris O'Shea said called it a "strong underlying operational performance", which has "continued into early 2024".

"As you would expect, sharply lower commodity prices and reduced volatility will naturally lower earnings in comparison to 2023 as we return to a more normalised environment," he added.

Centrica said the progress made in 2023 has reinforced confidence in delivering around GBP800 million of sustainable adjusted operating profit over the medium-term from its retail and optimisation activities on average each year.

Shares in Centrica rose 4.5% to 140.40p each in London on Thursday morning.

By Jeremy Cutler, Alliance News reporter

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