2016 Preliminary Results announcement


“2016 was a year of robust performance and progress in implementing our customer-focused strategy.  We delivered our key objectives including improved customer service and more innovative offerings and solutions – while repositioning the portfolio, building capability and driving significant cost efficiencies.  2016 was a busy year for the team, but we have delivered a lot, and Centrica enters 2017 a stronger company – with encouraging underlying momentum and positioned to deliver longer-term returns and growth.”


Customer-led strategic repositioning on track

  • Shift in investment towards customer-facing activities from E&P and Central Power Generation.
  • New offers in energy and services focused on delivering choice, improved engagement and loyalty.
  • Investment in customer service resulting in lower complaints and improved NPS.
  • UK energy supply accounts broadly flat in H2 2016 after a 3% reduction in H1 2016.
  • In Connected Home 527,000 hubs installed at the end of 2016.  Hive brand introduced into North America.
  • B2B acquisitions have added leading capabilities and are performing ahead of expectations.
  • Establishment of ‘Centrica Innovations’ to drive growth and access new technology and innovation.
  • E&P capital expenditure down 28% to £518m, within the £400m-£600m targeted range.
  • Exit from wind power generation ownership completed with sale of Lincs windfarm; Trinidad & Tobago E&P divestment announced; Canada E&P sale targeted for 2017.

 Robust financial performance

  • Adjusted operating profit and adjusted earnings both up 4%, adjusted EPS of 16.8p.
  • Adjusted operating cash flow up 19% to £2,686m, including £357m working capital inflow in UK Business.
  • Underlying adjusted operating cash flow growth of 14%.
  • Efficiency programme delivery of £384m of cost savings and over 3,400 like-for-like reduction in direct headcount in 2016, both ahead of target.  A further £250m of efficiency programme delivery expected in 2017.
  • E&P £166m free cash flow positive reflecting reduced capex and lower cash production costs.
  • Net debt down 27% to under £3.5bn.

Outlook and 2017 targets – returns and growth

  • Continued confidence in at least 3-5% per annum underlying adjusted operating cash flow growth on average 2015-20, underpinned by strong delivery in 2016.
  • Adjusted operating cash flow expected to exceed £2bn in 2017; capital expenditure to be limited to £1bn.
  • Having built base capabilities, around £100m of incremental revenue investment in growth expected in 2017.
  • Full year dividend of 12.0p.  In the prevailing environment, restoration of a progressive dividend currently expected when Group net debt is in the range £2.5-£3.0bn, a level targeted by the end of 2017.
  • Global Consumer and Business divisions formed to enable a more coherent approach to the end-customer.
  • Capital Markets Day on 21 June 2017 to provide additional insight into Consumer and Business strategies.

Group financial summary

Year ended 31 December








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Unless otherwise stated, all references to operating profit or loss, taxation, cash flow, earnings and earnings per share throughout the announcement are adjusted figures, reconciled to their statutory equivalents in the Group Financial Review on pages 8 to 10. See also notes 2, 5 and 10 to the Financial Statements and pages 71 to 72 for an explanation of the use of adjusted performance measures.

Download documentation for the results




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For further information:

Centrica will hold its 2016 Preliminary Results presentation for analysts and institutional investors at 9.30am (UK) on Thursday 23 February 2017. There will be a live audio webcast of the presentation and slides at www.centrica.com/2016-prelim-results-webcast.

A live audio broadcast of the presentation will be available by dialling in using the following number:

+ 44 (0) 20 3059 8125

The call title is “Centrica plc 2016 Preliminary Results”.

An archived webcast and full transcript of the presentation and the question and answer session will be available on the website
on Tuesday 28 February 2017.