Centrica profits drop in 'normalising' market conditions

(Sharecast News) - British Gas owner Centrica said on Thursday that it was extending its share buyback programme as it posted a drop in first-half profits in what it called a more "normalised" external environment. In the six months to 30 June, adjusted operating profit fell to £1.04bn from 2.08bn in the same period a year earlier, with pre-tax profit down to £1.1bn from £2.07bn.

Adjusted operating profit at British Gas Energy slid to £159m from £969m. Centrica said this reflects a non-repeat of the H1 2023 cost recovery of about £500m largely associated with unanticipated Standard Variable Tariff demand in 2022, as well as lower commodity prices and associated volatility.

The company said that group profitability was set to be "heavily weighted" to the first half of 2024.

Centrica lifted its interim dividend per share to 1.5p from 1.33p, and extended its buyback programme by £200m, to be completed by around February 2025.

Chief executive Chris O'Shea said: "Our core businesses continued to deliver in line with our expectations in the first half of 2024, against the backdrop of more normalised market conditions.

"Against the medium-term profit objectives we set out last year, we are on track to deliver two years ahead of schedule for the majority of our businesses, and we continue to ramp up our investment programme, including in innovative technologies that will support the UK and Ireland's net zero ambitions.

"Alongside this, the investments we are making in our data capabilities, product innovation and customer service have helped to improve operational performance across the group. This has driven marked improvements in customer satisfaction, allowing us to continue shifting our focus to growing customer numbers, and helping to deliver for our colleagues, customers and investors over the long-term."

Centrica also announced that Scott Wheway will step as chair after almost nine years on the board and five years as chair and will not seek re-election as a director.

With effect from 16 December 2024, Kevin O'Byrne will succeed Wheway and will be appointed as chair of the company.