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Centrica rallies after mixed trading update

Adjusted operating cash flow is expected to be in the lower half of the £1.8-£2bn range and year-end net debt will be between £3bn and £3.5bn

Centrica PLC - Centrica confirms full-year outlook so far
Performance was hit by lower European wholesale gas prices

Centrica PLC (LON:CNA) said full year adjusted operating cash flow is expected to be in the lower half of the £1.8bn-£2bn range, but the British Gas owner trimmed its capital investment plans and increased its target for cost cutting.

Performance was hit by lower European wholesale gas prices, although exploration and production earnings are protected by forward hedging.

READ: Centrica wins appeal over Ofgem price cap

Confirming full-year earnings guidance, the group said that final results depend on the weather, commodity prices and performance in the key final months of the year.

The FTSE 100-listed firm said there was growth in total customer accounts, with 214,000 new subscriptions in the four months to October, higher margins and returns in North America, strong trading and optimised performance in Europe, offset by outages at the non-operated nuclear stations in the UK.

Year-end net debt will be between £3bn and £3.5bn.

Capital investment was knocked off by £100mln to £800mln, while efficiency savings will be increased by £50mln to £250mln.

“I am encouraged by further growth in customer accounts and the recovery of business energy supply margins in North America, while we also continue to drive material levels of efficiency and maintain capital discipline,” said chief executive Iain Conn, who announced he was leaving in the summer after the dividend was cut.

Centrica shares were up more than 5% to 76.94p in early trading on Thursday.

"Centrica shares have taken an absolute battering in the last few years, as management have tried and failed to implement a turnaround plan to restore confidence to investors," said Michael Hewson at CMC Markets. 

"While there is some evidence of a nationalisation discount most of Centrica’s problems are mostly home grown."

"The company has consistently blamed a challenging environment and this morning’s trading statement doesn’t appear to have changed the outlook for this year." 


Quick facts: Centrica PLC

Price: 40.05 GBX

Market: LSE
Market Cap: £2.34 billion

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