Centrica released a trading statement ahead of its Annual General Meeting, noting strong performance across the first five months of the year.
In the retail division, first-half underlying operating profit is expected to come in “significantly higher” than previous years, driven by allowances in the UK domestic tariff cap having a positive impact on British Gas Energy.
Performance in Energy Marketing & Trading has remained strong. In Infrastructure, availability and volumes from gas production, nuclear and gas storage have helped to offset the impact of lower commodity prices.
Full-year underlying earnings per share (EPS) is now expected to be towards the top end of analyst forecasts of 16.5p-24.7p, heavily weighted towards the first half of the year.
The shares rose 1.8% following the announcement.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown:
“Centrica’s had a great start to the year, with its British Gas Energy division fuelling overall group performance. Increased allowances in the UK domestic tariff cap are having a positive impact on this retail arm, helping to drive a strong showing across the first five months. The majority of these tailwinds should be felt in the first half of the year, but are strong enough to nudge up full-year earnings per share guidance toward the top end of analysts’ forecasts.
This is good news as the performance of British Gas has been lacklustre in recent times. Centrica’s previously relied on its Energy Marketing & Trading division to capitalise on high energy prices and pick up the slack of its struggling retail efforts, so it’s a welcome sight to see British Gas start to pull its own weight again.”
