British Gas owner Centrica PLC (LSE:CNA) has recorded bumper profits during the six months to June 31, 2023, prompting a new wave of investment, a higher dividend and a larger share buyback.
Adjusted operating profit climbed by 55.2% over the period to £2.08bn, while net cash increased tenfold to £3.06bn.
Improvements in British Gas aided the surging profits, Centrica said in a statement, with the retail wing penning a tenfold increase in operating profit to £969mln.
This was thanks to a recovery of costs incurred when wholesale prices began to rise in 2021, with Ofgem’s price caps from April including measures for losses to be regained through bills.
Centrica’s profit on a statutory basis sat at £6.46bn, meanwhile, up from a £1.09bn loss last year.
Chief executive Chris O’Shea explained the leap in gains marked a “significant one-off recovery of past costs,” allowed by the UK’s price cap mechanism, which determines bills.
Given the higher earnings, Centrica announced a £450mln boost to its share buyback programme, launched in November 2022, bringing the total figure to £1bn.
The group’s dividend was also increased by 33% to 1.33p per share at the half-year stage.
O’Shea unveiled a new green transition strategy, meanwhile, which will see Centrica “materially” increase investments in clean technology to between £600mln and £800mln by 2028.
“The new green investment strategy we've announced will see us invest several billion pounds in the energy transition,” O'Shea commented. “Our robust balance sheet has allowed us to invest heavily […] and will make sure that our customers have cleaner energy at the right price.”