Centrica powers ahead

True, a good chunk of this was gobbled up by a 4 per cent hike in Centrica's effective tax rate to 47 per cent - due to higher taxes on rising upstream oil and gas production - so adjusted earnings only climbed 2 per cent year on year. Exceptional items and certain re-measurements of contracts make up the remainder of the difference.

Investors should nevertheless be comforted by the group's strong first-half operational performance, led by 16 per cent growth in adjusted cash profits at Centrica Energy, the oil and gas production arm that now accounts for half of group-wide profits. The upstream business is on track to deliver a production increase of nearly 20 per cent for the full year, after the York and Rhyl gasfields began production in the first quarter and the acquisition of Canadian gas assets is accounted for.

At British Gas, gas consumption was up 13 per cent year on year against a backdrop of sustained cold weather. However, rising environmental, network and regulatory pressures meant Centrica was unable to capitalise on the demand increase in an effort to keep prices down for customers. As a result, adjusted cash profits increased a mere 1 per cent.

Centrica's North American arm, Direct Energy, grew operating profit by 6 per cent during the period, with management citing "enhanced scale due to organic growth and acquisitions" as the primary factor. The recently announced $1bn (£650m) purchase of a US energy marketing business should provide further scale in retail, with analysts at Deutsche Bank describing the acquisition as "a deal with strategic value for which they are not paying a strategic premium".

Centrica's management reiterated that the company is well on track to hit earnings expectations for the full year. Before the results, Deutsche Bank forecast pre-tax profits of £2.67bn in the current year and EPS of 28.0p (from £2.48bn and 27.0p in 2012).