British Gas owner Centrica's underlying profits rose just 1 per cent to £2.4bn in what was a tale of two halves for the company as its downstream retail business struggled amid record energy prices, which conversely allowed the upstream production division to boom.
Soaring gas prices and a mild winter squeezed margins at British Gas, where underlying operating profit slumped 17 per cent to £1bn. Conversely, high gas prices pushed underlying profit in upstream gas production 33 per cent higher to £1bn. The US retail business continues to perform well, with underlying profits 33 per cent higher at £312m, but the UK gas storage business struggled as underlying profits fell 56 per cent to £75m.
An estimated £200bn of investment is required across the industry to secure the UK's energy future, and Centrica has already announced £1.4bn of acquisitions in the first few weeks of 2012. It has earmarked a further £1.4bn for capital investment in 2012. Cash generation remained strong, with operating cash flow marginally up to £3.1bn.
Broker Investec Securities forecasts underlying pre-tax profits of £2.6bn and EPS 27.8p (from £2.3bn and 25.6p in 2011) for 2012.
CENTRICA (CNA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 292p | MARKET VALUE: | £15.1bn | |
| TOUCH: | 292-292.4p | 12-MONTH HIGH: | 343p | LOW: 278p |
| DIVIDEND YIELD: | 5% | PE RATIO: | 34 | |
| NET ASSET VALUE: | 108p | NET DEBT: | 61% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 16.3 | 2.11 | 36.5 | 11.6 |
| 2008 | 20.9 | 0.66 | -3.3 | 12.2 |
| 2009 | 22.0 | 1.00 | 12.7 | 12.8 |
| 2010 | 22.4 | 2.81 | 36.4 | 14.3 |
| 2011 | 22.8 | 1.25 | 8.6 | 15.4 |
| % change | +2 | - | - | +8 |
Ex-div: 25 Apr Payment: 13 Jun *Includes intangible assets of £3.7bn, or 72p a share | ||||
