British Gas owner Centrica is expected to confirm its post-pandemic rebound with mega profits in its upcoming half-year results last this month.
However, it is likely to restrain its overall dividends, as the firm looks to play a balancing act with customers facing a severe cost of living crisis and record energy bills.
The company’s revival has chiefly been powered by soaring oil and gas prices and lucrative offloads of expendable assets, with the company now expected to re-join the FTSE 100.
This has put pressure on chief executive Chris O’Shea to bring back dividend pay-outs to shareholders, two years after he tightened the purse strings amid the pandemic.
The energy boss hinted at the possible reinstatement earlier this year.
In an interview with The Times in April, O’Shea said: “You’ve got to restore it at some point. You’ve got to give people a return. And I think our shareholders have been very, very patient.”
Centrica has enjoyed a remarkable rebound in performance over recent month with analyst expectations of £1bn in pre-tax profits, while revenues are expected to jump to £27.8bn, a 50 per cent boost on last year’s like-for-like total of £18.3bn.
However, it is expected to contain interim pay-outs to 1p per share, with a full-year pay-out of 3.1p per share.
This is despite Centrica citing analyst forecasts in May of potential earnings per share of 10.8p per share – up from 4.1p last year.
The restraint comes amid expectations of household energy bills climbing over £3,000 per year this winter, in the coldest months of the year when demand is at its peak.
With energy users braced for a sustained period of high prices, a “fat cat” style handout could trigger a customer backlash.
During this crisis, Centrica has picked up over 700,000 customers during the market crisis from fallen suppliers, allowing the supplier to dip into Ofgem’s compensation scheme, totalling £2.7bn.
It has also completed the sale of Spirit Energy,’s North Sea oil and gas arm, for £800m.
The sales have lined Centrica with cash and wiped out its debt, which could be directed towards its £1.3bn pension deficit.
It is now valued at close to £5bn.
Meanwhile, Centrica has applied to reopen the Rough field’s storage site, to help alleviate Britain’s lack of gas storage, five years after it was shut.
The firm has also called for customer credit balances to be ringfenced as part of industry reforms, a move which has drawn opposition from rival supplies such as Octopus Energy and So Energy.