2024 Interim Results

25 July 2024

Good financial performance in a more normalised environment

• First half adjusted operating profit (AOP) of £1.0bn with:
  • Retail AOP of £0.2bn (H1 2023: £1.0bn) driven by improved performance in British Gas Services & Solutions and Bord Gáis Energy, offset by no repeat of one-off cost recoveries in British Gas Energy.
  • Optimisation AOP of £0.3bn (H1 2023: £0.5bn) reflecting both lower commodity prices and volatility. 
  • Infrastructure AOP of £0.5bn (H1 2023: £0.7bn) underpinned by our hedging strategy, although Centrica Energy Storage+ (CES+) has been impacted by lower seasonal gas price spreads.
• Net finance income of £20m (H1 2023: £36m cost) driven by our strong net cash position.
• Adjusted EPS for the first half was 12.8p.
• Statutory operating profit of £1.7bn includes the impact of the unwind of unrealised hedges from 2023, and an impairment write-back on our nuclear investment. Reflecting this, statutory basic EPS for the first half was 25.1p (H1 2023: 73.0p). 
• Free cash flow of £0.8bn (H1 2023: £1.4bn) largely reflects the movement in adjusted operating profit, also supported by dividends received from our nuclear investment.
• Statutory net operating cash flow of £0.8bn (H1 2023: £2.5bn) includes £0.1bn of margin cash and collateral inflow (H1 2023: £1.1bn inflow), closing with total margin cash posted of £0.2bn.
• Modest increase in capital expenditure to £221m (H1 2023: £190m), although progress has been slower than we hoped as we retain our disciplined focus on returns.
• Strong balance sheet, with closing adjusted net cash of £3.2bn compared to £2.7bn at the end of 2023.
• In-line with our progressive dividend policy, interim dividend per share increased to 1.5p, while our share buyback programme has been extended by £200m, to be completed by around February 2025.

Continued delivery on our strategic priorities

• Embedding operational excellence across the Group as the foundation for growth.
  • Group colleague engagement of 8.1 (FY 2023: 7.7) now top quartile for our industry.
  • Customer satisfaction improvements across Retail, with reduced complaints, higher net promoter scores ("NPS"), Uswitch Energy Awards Best Overall Improvement, and retaining our 4 star Trustpilot score.
  • Majority of our UK residential energy customers now migrated to our new Ignition technology platform.
  • Strong operating performance in British Gas Services & Solutions benefitting customer retention, +5ppts vs FY23.
  • Continued focus on improving performance in new customer acquisitions.
• Delivering attractive returns from our green-focused investment programme.
  • Remaining disciplined on return thresholds, targeting 7-10%+ average returns and additional Group portfolio benefit, with a significant opportunity set currently under review.
  • Ramping up our Meter Asset Provider ("MAP") business, with an expected low risk return of 8%+.
  • 200MW Irish flexible power generation plants project ~70% complete, with commissioning expected around the middle of 2025.
  • In addition, over 600MW of assets in detailed plans or delivery across the UK and Continental Europe.
• Expanding our portfolio of growth options, supporting the UK and Ireland's energy security and net zero ambitions.
  • Phased £70m investment and strategic partnership with Highview Power focused on developing the first commercial-scale Liquid Air Energy Storage ("LAES") plant in the UK.
  • Exploring offshore wind opportunities with Corio Generation in Ireland.
  • Continue to progress carbon storage opportunity at Morecambe Bay gas field, and remain ready to transform Rough, which could store up to 200bcf of hydrogen, subject to regulatory framework.

Further Reading