British group Centrica, parent company of British Gas, soared nearly 7% on the London Stock Exchange on Thursday, boosted by the announcement of a return to profit in the first half thanks to energy prices charged in the UK.
Centrica reports first-half net profit of £4.2 billion, London Stock Exchange soars
Group share of net profit amounted to 4.2 billion pounds (4.9 billion euros) in the first half, compared with a loss of 864 million a year earlier, Centrica announced in a press release. Its electricity and gas supply arm British Gas Energy posted a ten-fold increase in adjusted operating profit (excluding exceptional items) to £969 million (€1.1 billion), thanks to a more generous energy price cap over the period. The announcement sent Centrica shares soaring on the London Stock Exchange, climbing 6.81% to 132.45 pence shortly before 11:00 GMT.
Pressure on UK energy distributors: Centrica faces energy crisis and controversial profits
Energy distributors have been under pressure for several years, and particularly over the past two years, with a series of supplier bankruptcies in the UK, others being absorbed or subject to government bailouts. With the post-Covid reopening of the economy and the Russian invasion of Ukraine, wholesale energy prices soared, but suppliers were unable to pass on these increases quickly due to caps in place to protect consumers. The energy companies have since been able to recoup some of their losses, and the announcement of huge profits is causing teeth to crunch at a time when many Britons are suffering from a severe cost-of-living crisis, and inflation remains high, boosted for months by energy bills.
“Centrica won’t win a popularity contest with the public any time soon, but shareholders may not be too bothered,” believes AJ Bell analyst Russ Mould. The group “needs to tread carefully given that many households are struggling to pay bills” and that Centrica has also recently been rocked by a scandal linked to the forced installation of prepaid meters in the UK, the analyst continued.
