British Gas-owner Centrica (CNA) shot to the top of the FTSE 250 leader board on Friday after agreeing to sell its North American business Direct Energy in a $3.63 billion deal, or roughly £2.85 billion.

The sale, to US energy supplier NRG Energy, will significantly ease Centrica’s balance sheet borrowings, with net debt rising 18% to £2.8 billion during the first-half of the year, and to make a ‘material’ contribution to its defined benefit pension schemes, where a £1 billion increase was made in the technical pension deficit.

Investors rallied behind the company in the wake of the deal, sending the shares soaring nearly 18% higher to 47.56p, giving Centrica a market value of close to £2.9 billion.


The energy supplier also reported narrowed first-half losses on Friday and said it expected a recovery in energy demand to continue into the second-half of the year.

For the six months to 30 June 2020, pre-tax losses narrowed to £264 million from £569 million last year, on a 7.5% revenue fall to £10.7 billion.

The uptick in profit was driven by a gain from certain net re-measurements after tax of £459 million, compared to a loss from these certain re-measurements in the first half of 2019, the company said.

There will be no interim dividend for shareholders, however.


Looking ahead, as lockdowns ease in its core markets, the company said it had already seen some recovery in energy demand and more normal sales of services and solutions.

‘We would expect these trends to continue into the second half of the year, assuming a second wave of Covid-19 does not lead to further severe lockdowns in our core markets,’ the company said.


Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account.

Issue Date: 24 Jul 2020