Company News

Interim results for the period ended 30 June 2012

Operating and financial overview

Strong financial performance
  • Adjusted earnings up 14% to £767 million; 14.8 pence adjusted basic earnings per share◊
  • Upstream production benefiting from new investments and Norwegian expansion
  • Higher UK residential energy consumption, compared to the exceptionally mild weather and unusually low levels of profitability* in the first half last year
  • Benefiting from enhanced scale in North America
  • On track to achieve £500 million cost reduction programme to maintain competitiveness
  • Tax charge^ of £568 million; UK tax charge of £431 million
Investing for growth
  • Total investment of £1.5 billion in the first six months of 2012
  • Further progress in gas development projects, to bring 140mmboe of reserves into production
  • Moving ahead with £1.4 billion Cygnus development; largest gas discovery in the Southern North Sea for 25 years, supporting 4,000 new jobs
  • First power from £1 billion Lincs wind farm in the coming weeks, able to supply around 200,000 homes
  • Awarded planning consent for 580MW Race Bank wind farm; progressing towards a final investment decision in the first quarter of 2013
Delivering for customers
  • Launched easy to understand bill and simplified tariff structure
  • Maintained position as cheapest major standard electricity supplier at average consumption
  • British Gas residential energy accounts stable at 15.8 million, reflecting good service
  • Industry leadership in innovation, energy efficiency and support for the vulnerable
Delivering for shareholders
  • Interim dividend up 8% to 4.62 pence per share, 30% of prior year's dividend in line with established practice

"Centrica has performed well in the first half of 2012 despite challenging market conditions, although the increase in earnings must be placed in the context of unusually low levels of consumption and profits in the UK in the first half of 2011. We continue to focus on high standards of service, while ensuring that we run the business as efficiently as possible for the benefit of our customers. We have made significant investments to secure energy supplies for the UK – and will continue to invest across the Group, where we see value. As a result, we have a stronger business that is delivering benefits for all our stakeholders."

Sam Laidlaw
Chief Executive

Earnings and operating profit numbers are stated, throughout the Financial Performance and KPIs, Performance Overview and Operating Review sections, before depreciation of fair value uplifts to property, plant and equipment from Strategic Investments and exceptional items and certain re-measurements unless otherwise stated – see note 3 for definitions. In addition, all references to profit or loss are stated before share of joint venture and associate interest and tax. The Directors believe these measures assist with better understanding the underlying performance of the Group. The equivalent amounts after exceptional items and certain re-measurements are reconciled at Group level in the Group Income Statement. Exceptional items and certain re-measurements are described in note 6. Adjusted earnings and adjusted basic earnings per share are reconciled to their statutory equivalents in note 10. All current financial results listed are for the period ended 30 June 2012. All references to 'the prior period', 'the prior year', '2011' and 'last year' mean the period ended 30 June 2011 unless otherwise specified.

*Including share of joint ventures and associates before interest and taxation, and before depreciation of fair value uplifts to property, plant and equipment from Strategic Investments and exceptional items and certain re-measurements
◊As above, except joint ventures and associates stated after interest and taxation
^ Includes taxation on profit from continuing operations and tax from joint ventures and associates as reconciled in the Group Financial Review

View the full report 

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