Customer losses have continued at ‘Big Six’ energy supplier Centrica (CNA). The group’s 2017 results revealed the group’s total consumer energy supply and services customer numbers fell 7 per cent in the year to 24.4m. Of the roughly 1.7m customers lost, 1.38m came from its UK consumer business, although the group notes that almost a million of these were customers on low-margin collective switch or white-label fixed-price tariffs, which it has been trying to move away from.
As political and competitive pressures have continued to weigh heavily on UK energy suppliers, catering to businesses has become increasingly attractive. Indeed, despite rival SSE’s (SSE) intention to spin out its UK consumer energy supply business, it plans to continue serving business customers. Unfortunately, Centrica has also run into problems with its business customers, both in the UK and US. Increased competition and warmer weather pushed adjusted operating profit for the division down 67 per cent to £161m. Challenges in business supply were also given as the reason for lower profits in the wider group, which were down 17 per cent to £1.25bn.
Despite this, the group performed largely in line with analyst estimates, with RBC Capital Markets continuing to forecast adjusted EPS of 13.8p for 2018 (from 12.6p in 2017).
| CENTRICA (CNA) | ||||
| ORD PRICE: | 138p | MARKET VALUE: | £7.72bn | |
| TOUCH: | 137.8-138p | 12-MONTH HIGH: | 236p | LOW: 123p |
| DIVIDEND YIELD: | 8.7% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 48p* | NET DEBT: | 76% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 26.6 | 1.65 | 18.4 | 17.0 |
| 2014 | 29.4 | -1.40 | -20.2 | 13.5 |
| 2015 | 28.0 | -1.14 | -14.9 | 12.0 |
| 2016 | 27.1 | 2.19 | 31.4 | 12.0 |
| 2017 | 28.0 | 0.14 | 6.0 | 12.0 |
| % change | +3 | -94 | -81 | |
| Ex-div: | 10 May | |||
| Payment: | 28 Jun | |||
| *Includes intangible assets of £4.3bn, or 77p a share | ||||
