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(Bloomberg) — Centrica Plc will extend its program to return cash to shareholders before a multi billion-pound investment in the UK’s Sizewell C nuclear power station expected later this year.
The owner of British Gas plans to buy further £200 million ($257 million) in shares from investors, it said in its earnings statement on Thursday. The new program will add to the already £1 billion that started in November 2022.
Centrica stepped up pay-outs to its shareholders in 2022 after profits at its British Gas retail energy unit jumped after the energy crisis sent prices soaring. Now, with prices normalizing, the company is sitting on a £3.2 billion pile of cash that needs to be spent.
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“Against the medium-term profit objectives we set out last year, we are on track to deliver two years ahead of schedule for the majority of our businesses, and we continue to ramp up our investment program, including in innovative technologies that will support the UK and Ireland’s net zero ambitions,” Centrica Chief Executive Officer Chris O’Shea said in the report.
The utility said it remain committed to increasing dividends raising the interim payment to 1.5 pence per share from 1.33 pence. Centrica previously said it is considering investing in the planned UK nuclear power plant Sizewell C, potentially making it a key stakeholder in the British government-led project.
Centrica is seeking average returns on future investments of 7-10%, according to the statement Thursday.
“We have a significant opportunity set under consideration, and will only progress the most attractive projects through our rigorous investment review process,” it said in the statement. “We remain confident of building up investment, with an expected increase in the second half of 2024.”
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The company appointed Kevin O’Byrne to succeed Scott Wheway as Chair of Centrica from December 2024.
Centrica’s profits have been publicly scrutinized and faced widespread criticism as the country grappled with soring inflation during the cost-of-living crisis. The latest set of results also come after figures showing UK households have accumulated energy debts of £3.3 billion even as bills ease, a reminder that lower power and gas costs haven’t tempered the financial constraints for many households.
Analysts including Jenny Ping from Citigroup Inc. and Javier Garrido from JPMorgan Chase & Co. were expecting more buybacks, saying in advance of the first half results that the company was in position to continue with the program.
Centrica’s adjusted operating profit more than halved to £1.04 billion in the six months through June as energy prices returned to more normal levels after the region’s crisis.
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