Centrica PLC (LSE:CNA) will return more of its cash to shareholders in 2024 once it has completed £270 million of share buybacks, analysts believe.
Operating profits at the British Gas owner fell by 17% to £2.75 billion in 2023 due to lower commodity prices, but experts at Citi reckon the group’s strong balance sheet can support the prospect of future capital returns.
The US bank had predicted net cash would be at £2.4 billion, one billion higher than the market had forecast.
However, to the surprise of all analysts, Centrica closed the year with £2.7 billion in net cash.
Analysts also noted the strength in the gas giant’s Energy Marketing and Trading division, its Home Services arm performing better than expected and power hedging prices coming in marginally higher than forecast.
Citi’s £2.87 billion estimate for Centrica’s operating profit was slightly higher than what the energy giant reported but beat consensus of £2.6 billion.
However, not all of the cash generated by Centrica will go to its shareholders.
Boss Chris O’Shea said the company would be continuing to commit a portion of British Gas Energy and Bord Gais Energy profits to return to customers.
"Whilst we are starting to see material commodity price falls, today we have committed another £40 million, bringing the total voluntary customer support to £140 million, more than any other supplier,” he said in a company statement.