Centrica saw group statutory revenue from continuing operations growth of 20% from £12.2bn to £14.7bn in the full year.
Revenues from the sale of products and services between segments climbed by 30% to £20.5 billion (2020: £15.7 billion) in the gross segment revenue from continuing operations. Higher wholesale commodity prices impacted Energy Marketing & Trading and Upstream, as well retail pricing in British Gas Energy, Bord Gáis Energy, and Centrica Business Solutions.
The group recorded and adjusted operating profit increase of 112% from £447m to £948m.
A 38% rise in EBITDA from continuing operations from £541m to £1.8bn due to higher achieved prices and restating of operating profits.
Customer retention grew to 82% in 2021, despite a drop of 135,000 customers at British Gas Services.
“Centrica’s posted strong full year results, with profits almost doubling despite ongoing volatility. The group’s restructuring is all but complete, and the cost savings went a long way in offsetting volatility and weakness in some parts of the business,” said Laura Hoy, Equity Analyst at Hargreaves Lansdown.
“Profits at British Gas Service & Solutions were hurt as customers swapped to lower-priced products to temper the impact of inflation and covid-related costs offset hard-earned efficiency improvements. The latter is likely to dissipate, but the former could be an ongoing trend.”
Recovery in the energy demand due to reduced impact of Covid restrictions and growth in volume resulted in an increase of 14% from 2020 in the amount of energy provided.
Non-Core Divestments
On January 5, 2021, Centrica competed the sale of Direct Energy to NRG Energy for £2.7bn. The sale was part of Centrica’s business strategy to be more focused on their core markets, UK and Ireland.
“Our strong balance sheet and responsible business model has allowed us to ensure continued supply for customers whose suppliers have ceased trading and offer additional help to those most vulnerable through the ongoing energy crisis. 2021 financial performance was resilient, and we continue to make good progress towards the turnaround of Centrica, having materially completed our portfolio simplification. Our focus for 2022 is on building on the progress we have already made to drive improvements in colleague engagement and in particular customer service, while continuing to build our capabilities to help our customers on their path to net zero,” said Chris O’Shea, Group Chief Executive.
Despite a recovery in Centrica’s revenues and profit, the board held off declaring a dividend for the period.
“The dividend isn’t back on the table yet, though management said it’s in the pipeline. With the balance sheet looking much improved and free cash flow on the up, the group looks on track to stage a fully fledged recovery,” said Laura Hoy.
“However with uncertainty looming over future price volatility it could take some time before management is confident enough to loosen the purse strings.”
