Centrica announced a 15 per cent increase in adjusted operating profits to £1.45bn for the first six months of the year, as British Gas customers used more gas at higher prices and production received a boost from recently acquired Norwegian assets in the North Sea. The shares look a reasonable defensive bet.
The impact of higher prices upon the British Gas residential arm was dramatic. Despite losing 300,000 customers to rival suppliers, rotten weather meant gas usage rose 5 per cent, and operating profit rose 23 per cent to £345m.
The group's gas production division reported operating profits up by £94m to £508m as the business benefited from three major acquisitions in the North Sea, which are expected to increase oil and gas production by 20 per cent in the current financial year. Centrica also announced it will start the £1.4bn development of Cygnus, the largest gas discovery in the Southern North Sea for 25 years.
Power generation operating profits rose by £57m to £174m after being boosted by a £33m net gain on the disposal of an offshore wind farm interest. But the ageing gas-fired fleet continues to struggle: Kings Lynn is to be closed and Peterborough and Roosecote were placed under review.
Analysts at Deutsche Bank forecast adjusted full-year pre-tax profits of £2.7bn and EPS of 27.27p.
CENTRICA (CNA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 313p | MARKET VALUE: | £ 16.3bn | |
| TOUCH: | 312.7-313p | 12-MONTH HIGH: | 331p | LOW:278p |
| DIVIDEND YIELD: | 5.0% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 117p* | NET DEBT: | 75% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Net div per share (p) |
|---|---|---|---|---|
| 2011 | 11.5 | 1.18 | 9.1 | 4.29 |
| 2012 | 12.0 | 1.68 | 19.1 | 4.62 |
| % change | +4 | +43 | +110 | +8 |
Ex-div:26 Sep Payment:14 Nov *Includes intangible assets of £4bn, or 77p per share. | ||||
