Centrica (CNA) grabbed headlines for the wrong reasons with the release of its half-year results, after it revealed it would raise the price of its standard electricity tariff by 12.5 per cent from 15 September. This first price rise in four years, following four consecutive price cuts, was pitched as a response to increasing costs from delivery, environmental and social policy, as well as its smart meter rollout.
The number of customer accounts in the consumer division, which includes British Gas, fell by 689,000, or 2.6 per cent, in the 12 months to the end of June 2016. However, around 60 per cent of these losses flowed from management decisions, including the roll-off of collective switch deals in the UK and scaling back door-to-door sales in the US. Lower customer numbers and reduced energy consumption among remaining customers drove adjusted operating profits down 23 per cent to £489m in the UK home division.
The group is making strong progress in its cost-cutting programme, stripping out £124m in the reported period. This puts it at £650m of savings since 2015, well ahead of the original £500m target slated for the end of 2018. Analysts at Deutsche Bank have forecast an adjusted pre tax profit of £1.4bn, giving EPS of 17.3p for the year to December 2017 (from £1.3bn and 20p in 2016).
| CENTRICA (CNA) | ||||
| ORD PRICE: | 203.2p | MARKET VALUE: | £11.4bn | |
| TOUCH: | 203.2-203.4p | 12-MONTH HIGH: | 244p | LOW: 189p |
| DIVIDEND YIELD: | 5.9% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 46p* | NET DEBT: | 109% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 13.4 | 1.63 | 22.2 | 3.6 |
| 2017 | 14.3 | 0.08 | 0.8 | 3.6 |
| % change | +7 | -95 | -96 | |
| Ex-div: | 12 Oct | |||
| Payment: | 30 Nov | |||
| *Includes intangible assets of £4.44bn, or 79p a share | ||||
