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Centrica ups earnings guidance after year of energy chaos

The business says that it now thinks earnings will top 30p per share.

12 January 2023

The owner of British Gas keeps benefiting from the energy crisis that has hit the world over the last year, new figures suggested on Thursday.

Centrica said that it expects earnings to be considerably higher in 2022 than it had told shareholders just a couple of months ago.

In November Centrica said that earnings per share would be “towards the top end” of the range of 15.1p to 26p that analysts were expecting.

But on Thursday the business upped this further, saying that it now thinks earnings will top 30p per share.

Centrica did not explain what it was basing this new conclusion on, instead it will update shareholders further in February.

But Martin Young, a specialist at Investec, thinks that the changes might be linked to parts of the business, the company’s trading business and its new-old gas storage site.

Centrica’s energy, marketing and trading business trades in power and gas across much of Europe. Big swings in gas and electricity prices in recent months have left a lot of space for energy traders to make big profits.

Centrica will also be benefiting from the Rough gas storage site. Years after being decommissioned, Centrica brought the UK’s biggest storage site back online in 2022 as countries across Europe scrambled to find enough gas to last the winter.

Late last year, the company started selling some of the gas that it had stored up in previous months, likely giving it an extra boost to cap off 2022.

Gas hob and British gas bill
Centrica owns British Gas (PA)

In its update on Thursday, the energy company said: “Centrica has continued to deliver strong operational performance from its balanced portfolio since its trading update on November 10 2022.

“Infrastructure asset availability and volumes have remained good, and we delivered incrementally strong optimisation performance.

“As a result, we currently expect to report 2022 full year adjusted earnings per share of above 30p. Cash generation has also been good, and we expect 2022 closing net cash to be above £1 billion.”

Shares in Centrica rose by more than 5% following the news.

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