Centrica PLC on Thursday rewarded shareholders with a dividend boost despite a decline in underlying earnings.
The Windsor, England-based owner of British Gas returned to profit in 2023 at the statutory level with a pretax figure of £6.47 billion compared to a pretax loss of £383 million in 2022. The figure for 2023 included exceptional items of £3.76 billion.
Operating profit fell to £2.75 billion from GPP3.31 billion, reflecting improved profit at its British Gas retail arm, but a worse performance in its optimisation and infrastructure businesses.
Annual profit at British Gas multiplied to £799 million from £94 million aided by the regulator allowing energy companies to recoup costs incurred during the energy crisis.
Optimisation adjusted operating profit nearly halved to £774 million from £1.40 billion the year before hit by lower prices and volatility in commodity markets.
Infrastructure adjusted operating profit fell 40% to £1.08 billion from £1.79 billion, including a £326 million hit from the introduction of the electricity generator levy in the UK.
Centrica said group revenue rose 11% to £26.46 billion in 2023 from £23.74 billion the year before, with diluted earnings per share of 70.6p compared to loss per share of 13.3p.
Free cash flow declined to £2.21 billion from £2.49 billion.
The annual dividend was increased by 33% to 4.0 pence per share from 3.0p, including a final payout of 2.67p, up from 2.00p the year before.
Centrica said its £1 billion share buyback programme is expected to run to July 2024. As at February 14, it had bought back £727 million of shares since the start of the programme.
Chief Executive Chris O’Shea said called it a ‘strong underlying operational performance’, which has ‘continued into early 2024’.
‘As you would expect, sharply lower commodity prices and reduced volatility will naturally lower earnings in comparison to 2023 as we return to a more normalised environment,’ he added.
Centrica said the progress made in 2023 has reinforced confidence in delivering around £800 million of sustainable adjusted operating profit over the medium-term from its retail and optimisation activities on average each year.
Shares in Centrica rose 4.5% to 140.40p each in London on Thursday morning.
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