Centrica's underlying pre-tax profit fell 18 per cent to £1.6bn last year, as the energy company’s wholesale operations were hammered by weak commodity prices. Despite the drop, earnings remained flat due to lower tax on retail profits and lower exceptional costs.
It's residential supply business, British Gas, shone despite a 7 per cent drop in overall gas consumption. Operating profits were up 42 per cent due to higher retail prices, a slightly increased customer base and more secondary product sales. On the flipside, low gas prices pummelled Centrica Energy, with operating profit down 62 per cent to £444m. Profits at the group’s North American arm, Direct Energy, also fell 29 per cent to £153m after a £61m one-off charge.
However, the group made several transformational deals throughout the year. The takeover of Venture Production added 50 per cent to UK reseves, and it established a position in nuclear with the November acquisition of a 20 per cent stake in British Energy. It also announced the £246m cash purchase of Suncor’s Trinidad and Tobago Liquefied Natural Gas operation, as well as plans to create 1,100 'green jobs' building an insulation business in British Gas.
Broker Ambrian expects full-year underlying pre-tax profits of £2.2bn and EPS of 24.7p (from £1.64bn and 21.7p in 2009).
CENTRICA (CNA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 272p | MARKET VALUE: | £14.0bn | |
| TOUCH: | 272-273p | 12-MONTH HIGH: | 291p | LOW: 213p |
| DIVIDEND YIELD: | 4.7% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 82p* | NET DEBT: | 74% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 13.4 | 1.81 | 26.2 | 10.5 |
| 2006 | 16.4 | -0.01 | -4.30 | 11.2 |
| 2007 | 16.3 | 2.11 | 36.5 | 11.6 |
| 2008** | 20.9 | 0.66 | -3.30 | 12.2 |
| 2009 | 21.9 | 1.00 | 16.5 | 12.8 |
| % change | +5 | +51 | - | +5 |
Ex-div:28 Apr Payment:16 Jun *Includes intangible assets of £2.8bn or 55p a share **Figures restated | ||||
