Thursday 22 July 2021 2:23 pm

Centrica profits lift as British Gas strike turns down the heat

Centrica has taken home some £1bn in operating profits in the past six months, as industrial actions at subsidiary British Gas tones down.

The group swung from a £338m statutory profit loss last year, it said in its result for the six months to 30 June.

Shares sank 2.1 per cent in its afternoon trading, taking its price down to 49.6p per share.

Centrica had been hit with industrial action at British Gas over the period and said its adjusted operating profits of £262m were “offset by impacts of Covid-19 across the group and industrial action in British Gas Services”.

Some 7,000 British Gas engineers were on strike for a total of 44 days in protest of the firm’s so-called “fire and rehire” tactics.

‘Eventful year’

Despite the impacts of the pandemic and British Gas strikes, the group managed to shave its net debt down to £2.9bn from £3bn six months ago.

“Our first-half financial performance was broadly as we expected overall, and we continue to make good progress towards the simplification of our company,” group boss Chris O’Shea said.

“Although there is still a lot to achieve, our turnaround remains on track, our balance sheet has been significantly strengthened.”

Basic earnings per share lifted this year to 12.8p from a 5.9p loss last year.

The group’s sale of Direct Energy also bolstered its balance sheet, which it said allows for an increased focus on core UK and Ireland activities.

Equity analyst at Hargreaves Lansdown, William Ryder, agreed that there is still a lot of work to do at the company.

“The British Gas owner has had an eventful year. After selling Direct Energy the balance sheet is much improved, even if a decent chunk of the proceeds will need to go towards shoring up the pension deficit.

“Strikes also left their mark after the group imposed new contracts on staff and Covid continues to disrupt the market. However, an unusually cold winter boosted energy demand.”