Centrica lifts expectations ahead of full-year results

Centrica published a trading update on Thursday, prior to entering its close period on 1 January, saying it was continuing to make good progress against its strategic priorities and now expected to exceed the 2016 targets originally set out at its 2015 preliminary results.

The FTSE 100 firm said adjusted operating cash flow was now expected to be in the range £2.4bn-£2.6bn.

Group capital investment, including small acquisitions of less than £100m each, was now expected to be around £900m, below the £1bn limit set as part of the group’s financial framework.

Efficiency savings of more than £300m were also reported, as part of the group’s £750 million per annum cost efficiency programme, with like-for-like operating costs expected to be lower in 2016 than in 2015.

The board said that was even after absorbing the effects of inflation, foreign exchange movements and additional investment in its focus areas for growth.

It made a direct like-for-like headcount reduction of over 3,000 during the period, and currently expected full year 2016 adjusted earnings per share to be around 16.5p.

The board said that improved outlook relative to the half year reflected further benefits from the cost efficiency programme and strong energy marketing and trading performance.

“Our performance in the second half of the year has been strong and we expect to exceed our 2016 targets,” said group chief executive Iain Conn.

“We have made considerable progress in reshaping our portfolio and capabilities to deliver a robust platform for customer-focused growth.”

Conn said the Centrica team performed very well in extremely difficult circumstances.

“Looking forward we are committed to delivering high levels of customer service, a wide choice of innovative offers and products and enhancing our digital capabilities, as we provide energy and services to satisfy the changing needs of our customers.”