Centrica (CNA) H1 2024 earnings summary

Executive summary

• Achieved strong H1 2024 performance with adjusted operating profit over £1 billion and EPS of 12.8p, supported by robust cash generation and a strengthened balance sheet, despite lower profits versus last year due to non-recurrence of prior year one-offs and lower commodity prices.

• Interim dividend increased to 1.5p per share and share buyback program extended by £200 million, reflecting confidence in future performance and cash flows.

• Continued investment in green infrastructure, flexible power generation, hydrogen storage, and strategic partnerships in energy storage and offshore wind.

• Colleague engagement improved to 8.1/10 and customer retention and satisfaction rose, though customer acquisition remains a focus.

• On track to deliver medium-term profit targets for most businesses two years ahead of schedule, with group targets expected by 2026.

Financial highlights

• Adjusted operating profit: £1,035m (H1 2023: £2,083m); adjusted EPS: 12.8p (H1 2023: 25.8p); free cash flow: £816m (H1 2023: £1,377m); net cash: £3.2bn (Dec 2023: £2.7bn).

• Adjusted revenue: £13,284m (H1 2023: £20,486m); adjusted gross margin: £2,150m (H1 2023: £3,307m); adjusted EBITDA: £1,134m (H1 2023: £2,304m).

• Capital expenditure increased to £221m (H1 2023: £190m); interim dividend per share: 1.5p (H1 2023: 1.33p).

• Over £1.7bn returned to shareholders in dividends and buybacks over two years; share buyback now totals £1.2bn since 2022.

• Group revenue decreased 35% to £13,284m, driven by lower commodity prices and volatility.

Outlook and guidance

• All Retail energy supply and Optimisation businesses expected to be within medium-term profit ranges in 2024, two years ahead of schedule.

• Group profitability to be heavily weighted to H1; net cash expected to decline in H2 as CapEx ramps up to £600–800m.

• Centrica Energy Storage+ faces a challenging outlook due to low seasonal spreads; infrastructure profitability expected to decline in H2.

• Commitment to progressive dividend policy and disciplined capital allocation remains.

• Uncertainties remain around weather, commodity prices, and regulatory changes, resulting in a range of possible full-year outcomes.