British Gas owner Centrica has forecast full-year earnings to be at the top end of analysts’ expectations, adding to a bullish mood in the energy industry that has prompted calls for higher taxes to offset surging costs for consumers.
Analysts expect the company to make earnings of between 6.7p and 10.8p per share this year, Centrica said on Tuesday, up from 4.1p last year.
The UK group said it had delivered a “strong” operational performance in the first four months of this year even as it suffered supply chain disruption and higher inflation that hit customer demand.
Shares in the group rose more than 3 per cent in early London trading on Tuesday.
Centrica’s prediction followed bumper first-quarter earnings reports posted by oil majors such as Shell and BP as prices soared for hydrocarbons. The UK group’s shares have risen more than a quarter over the past 12 months.
UK politicians have called for a windfall tax on oil and gas profits, arguing that the proceeds should be used to help people who are struggling with higher energy bills.
Centrica said it had secured increased volumes of gas and renewable energy to improve the UK and Europe’s security of supply and “managed increased commodity price volatility well”. It added a note of caution about the year’s uncertainties as businesses face higher inflation and the fallout from war in Ukraine.
“We expect those headwinds to continue to, at least partially, offset underlying operational progress for the duration of this period of higher inflation,” the group said. “Significant uncertainties remain over the balance of the year, including the impacts of weather, commodity prices movements, asset performance and the potential for increased bad debt charges given the current inflationary pressures in the UK.”
Centrica has set up a support fund that provides grants of up to £750 to help customers pay their energy bills.
The company’s adjusted operating profits more than doubled last year to £948mn, bolstered by surging profits from its North Sea oil and gas business.