British Gas Owner Centrica Shares Rally 7.25% on FY ’23 Results

The British Gas owner Centrica PLC (LON: CNA) share price rallied 7.25% after announcing its interim results for the year ended 31 December 2023. The company reported that its adjusted operating profit (AOP) stood at £2.8 billion, experiencing a slight decrease from 2022 once the disposed Spirit Energy Norway assets are factored out.

Retail profits rose by £0.7 billion to £0.8 billion, buoyed by a return to profitability in British Gas Services & Solutions alongside significant cost recoveries from previous periods in British Gas Energy. The optimisation segment saw a decrease of £0.6 billion, settling at £0.9 billion, attributed to diminished price levels and market volatility in the commodities sector.

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Infrastructure earnings declined by £0.2 billion to £1.1 billion, a move affected by the new Electricity Generator Levy imposed on Nuclear energy sources.

The company’s adjusted basic earnings per share (EPS) experienced a minor reduction to 33.4p. Meanwhile, the statutory operating profit surged to £6.5 billion, a figure inclusive of the positive effects from reversing unrealised hedge position losses recorded in 2022.

Consequently, the statutory basic EPS markedly increased to 70.6p, a significant improvement from a loss of 13.3p in 2022. Free cash flow was reported at £2.2 billion, slightly down from £2.5 billion in 2022, with a notable £0.2 billion inflow from working capital adjustments (compared to a £0.7 billion outflow in 2022)

Statutory net cash flow from operating activities was £2.8 billion, up from £1.3 billion in 2022, including a £0.6 billion inflow from margin cash and collateral. The year-end saw margin cash postings of £0.2 billion, down from £0.8 billion the previous year.

Chris O’Shea, Centrica’s Group Chief Executive, said: “At the start of the energy crisis we committed to contribute a material sum from British Gas Energy and Bord Gáis Energy profits to support our customers. Whilst we are starting to see material commodity price falls, today we have committed another £40 million, bringing the total voluntary customer support to £140 million, more than any other supplier. We’ve done a lot we can be proud of in 2023: we’ve paid over £1 billion in tax; we’ve created over 1,000 new UK based jobs as we continue to invest in customer service.” 

Centrica share price.

The Centrica share price rose 7.25% to trade at 143.82p from Wednesday’s closing price of 134.10p.