16 February 2023
If you are covering Centrica’s latest financial results, please find below a comment from Tom Gilbey, equity research analyst at Quilter Cheviot:
“Centrica produced some strong results this morning as its trading division took advantage of energy trends that came to dominate in 2022. Its adjusted profit grew over 250% to over £3bn , and it more than doubled its free cash flow, putting this to use by paying a dividend – which they only reinstated a year ago - and getting approval to buy back a potential 10% of their shares. It is this that may draw controversy given it is also benefiting from elevated energy prices and it has come under fire in recent weeks for its consumer practices.
“The business still expects conditions to remain tough for customers and stressed it will try and support them, pointing to the fact it recruited 700 additional people over 2022 to help.
“Interestingly, Centrica paid around £1bn in tax, perhaps putting the larger energy producing giants to shame. However, with these profits quite so extraordinary for Centrica, calls are only going to grow for stricter windfall taxes, particularly in the run up to the general election next year. While the results are strong, it is a reminder that Centrica faces a number of headwinds, some of its own making but some out of their control.”
