Centrica Shares Jump on Strong Operational Performance

Centrica (LON: CNA) shares jumped over 8% in early Thursday trading after the company said in a trading update that it has continued to deliver strong operational performance since its interim results in July.

As a result, the company now expects full-year adjusted earnings per share to be towards the top end of the guidance range of more recent sell-side analyst expectations. 

Centrica told investors in the update that volumes from its electricity generation and gas production activities have remained strong, while the reopening of the rough gas storage facility has strengthened the UK and Ireland’s security of supply.

However, the company warned that inflationary and economic pressures have impacted its cost base and customer numbers in British Gas Services & Solutions, with the warmer-than-usual weather in October contributing to lower volumes and profits in British Gas Energy. That has resulted in Centrica expecting adjusted operating profit in its retail division to be lower than current expectations.

Regardless, it maintains a strong balance sheet, with overall levels of liquidity having increased since the half year.

Centrica also announced a share buyback programme of up to 5% of its issued share capital, following its recent performance and expectations. 

Still, the company cautioned that there are still several significant uncertainties over the remaining two months of the year, including the effects of weather, commodity price movements, asset performance, and the potential consequences of a weak economy and elevated inflation on commercial performance in British Gas Services & Solutions and bad debt in its energy supply activities.

It also committed an additional £25m of help for customers, taking the amount it has invested in voluntary customer support this year to £50m.