Centrica might be about to kick off a new row over energy prices with its first-half results on 28 July if a preview by Citi proves accurate.
According to the US bank, the British Gas owner will announce a resumption of dividends plus outline plans for up to £0.5-£1bn to be returned to shareholders through share or debt buybacks.
Citi’s forecast comes on the day that energy consultant Cornwall Insight predicted household energy bills might hit £3,300 in January compared to £1,971 at present due largely to soaring gas prices.
The bank sees scope for an 'upside surprise' from both the company's nuclear and energy markets & trading divisions given the production volumes and volatile commodity markets.
“On the flip side, we expect weak services profits due to continued pressure from cost inflation and absenteeism.”
A half-year dividend of 1.1p is expected by the bank with a 3.8p payment for the full year.
Buy/High Risk is Citi’s investment assessment of Centrica with a target price for the shares of 105p.
Today, they were trading at 76p, down 2%.