British Gas owner Centrica PLC (LON:CNA) expects its 2016 results to exceed the guidance it gave at the end of last year thanks to “further benefits from its cost efficiency programme and strong energy marketing and trading performance”.
The FTSE 100-listed company said it expects to deliver adjusted earnings per share for 2016 of around 16.5p per share, which would still be a fall from 2015’s 17.2p outcome.
Centrica chief executive Iain Conn said: "Our performance in the second half of the year has been strong, and we expect to exceed our 2016 targets.
“We have made considerable progress in reshaping our portfolio and capabilities to deliver a robust platform for customer-focused growth. The Centrica team has performed very well in extremely difficult circumstances."
He added: “Looking forward we are committed to delivering high levels of customer service, a wide choice of innovative offers and products and enhancing our digital capabilities, as we provide energy and services to satisfy the changing needs of our customers.”
The group said it delivered efficiency savings of £300mln during the year and its operating costs fell on a like-for-like basis compared to 2015 after absorbing the effects of inflation, foreign exchange movements and additional investment.
In early morning trading, Centrica shares gained over 2%, up 4.8p at 223.7p.
Neil Wilson, Senior Market Analyst at ETX Capital, said: ”The steady erosion of Centrica’s UK (British Gas) household consumer base has been the chief cause for concern but it looks like the company has turned a corner.”
He added: “Its upbeat trading statement today shows UK home energy accounts are virtually unchanged since the half year update. That marks a fairly important milestone after it lost 400,000 customers in the first half – 3% of its base.
“Improvements in customer service seem to be paying off. It’s got to hope that easier switching will come full circle in due course and mean people return.”
Energy regulator Ofgem yesterday said that British Gas - the largest individual residential supply business in the UK - was one of eleven suppliers having 74% of its total customer base on standard variable tariffs, which are considered more expensive than other options such as fixed tariffs.
Earlier this month, Ofgem fined the group’s British Gas Business unit £4.5mln for failing to deliver new smart meters to larger electricity business customers by an April 2014 deadline.
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