Centrica PLC (LON:CSA) posted operating profit of £1.55 billion for 2024, in line with market expectations, as the energy company progressed its green-focused investment plan.
Adjusted operating profit fell from £2.75bn last year, according to its preliminary results for the year.
This was as retail operating profit halved to £400m, compared to £800m in 2023, despite “improved British Gas Services & Solutions and Bord Gáis Energy performance”.
The diversified energy company announced an additional £500m share buyback extension, taking the total programme to £2bn, which is expected to be completed by the end of 2025, depending on market conditions.
Its share price rose by about 8% by midmorning trading to over 146p per share as the company said it will increase its dividend in 2025 to 5.5p, raising the dividend to 4.5p in 2024, up from 4p the prior year.
Group chief executive Chris O’Shea said on an analyst call that the extension would mean it “would have bought back a quarter of the company in around three years”.
The energy company’s outlook for 2025 remains unchanged from December, with British Gas Services & Solutions expected to “deliver a further improved financial result compared with 2024, as it continues recovery towards its medium-term sustainable adjusted operating profit range by 2026”.
For 2025, it is forecasting adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of £650m to £850m in its infrastructure segment, equivalent to adjusted operating profit of £250m to £400m.
Centrica said it expects to register an adjusted operating loss in the range of £50m to £100m for Centrica Energy Storage+, which runs the UK’s largest gas storage facility in the North Sea.
Adjusted earnings per share fell to 19 pence, down from 33.4p last year.
Operating profit in its infrastructure division fell to £800m in 2024, down from £1.1bn in 2023, as “lower seasonal gas price spreads materially reduced profitability from Centrica Energy Storage+”.
Nuclear investment
Last year it benefited from life extensions to UK nuclear stations Heysham 1 and Hartlepool through to March 2027, and Heysham 2 and Torness to March 2030.
Centrica has entered discussions with the government to potentially invest in EDF’s planned Sizewell C nuclear plant in Suffolk, an investment that O’Shea said depends on returns.
He added: “We’re very interested in investing but it’s all dependent upon the returns.
“But if it doesn’t make sense for us, then we have plenty of other stuff. Our job is to make sure that we’re not so hung up on one thing that we have to do it no matter what. So I’d like to do Sizewell C, I think it’s the right thing for the country. If the returns are not there, I’m very happy for other people to do it.”
He added that an investment in Sizewell C will probably see “the vast majority of spend in the next decade rather than this decade”.
The company updated its climate transition plan launched in January 2025, bringing forward the target to be a net zero business by five years to 2040.
In today’s update to the market, Centrica said it has spent £2bn of a £4bn green-focused investment plan to date.
It said it continues to focus on investing “for value aligned to the changing energy system” as capital expenditure increased.
The company’s cash balance remains strong, with nearly £2.86bn of net cash, an increase compared to last year’s £2.74bn.
© Supplied by CentricaIn November 2024, portfolio company Bord Gáis Energy bought Swyft Energy, a solar photovoltaic installer in Ireland.
Centrica said it installed about 450,000 smart meters in 2024, which are expected to provide a low-risk internal rate of return of at least 9%.
“Looking ahead, I want to see Centrica continue to focus on the areas that make the biggest difference,” O’Shea said in a statement.
“We are investing in the energy transition, ensuring our customers have the energy they need, when they need it at a price they can afford.”
Centrica said it is targeting £1.6bn of adjusted EBITDA by the end of 2028.
In addition, O’Shea said that Centrica is still to decide on a direction for the Rough gas storage site.
“As it currently stands, we wouldn’t be refilling it,” O’Shea said. “But if the market changes then we could refill it, but we don’t have infinite patience.”
He added that a phased development might be needed to increase its capacity, but this would be dependent on whether a brand-new terminal might be needed if it were to converted fully to hydrogen.
“The conversation is about unlocking £2b of investment. We stand ready to do it. We’ve got the money in the bank, we’re good to go,” O’Shea added.
Recommended for you
