Centrica set to post around £1bn in first-half operating profits

It is set to post operating profit of £997m for the period, analysts at investment bank Jefferies said, which is expected to account for about 62 per cent of full-year earnings of £1.6bn.

In 2022 and 2023, first-half operating profit accounted for 50 per cent and 75 per cent of the full year earnings, respectively.

Jefferies added in the research note that Centrica could be in a position to announce a fresh share buyback, after several tranches of buybacks already over the last year.

A share buyback is when a company buys its shares back from the marketplace, returning money to shareholders.

Such a move can sometimes cause companies’ stock prices to fall, so they usually only do it when they have plenty of cash and when the stock market is on an upswing.

The research note added: “Centrica’s balance sheet continues to look attractive to us,” analysts said, citing a strong net cash position which is expected to be more than £2bn over the coming years.

“With this, we see the possibility of the company providing an update on its capital allocation policy at (first-half) results which was originally set last year.”

This week’s results come after Centrica confirmed that its year has been in line with its expectations, despite the energy market returning to a “more normalised” market backdrop following a drop in gas prices.

Last month, Centrica also fended off a potential shareholder revolt over its chief executive Chris O’Shea’s £8.2m pay deal for last year.

Pensions and Investment Research Consultants (Pirc), the shareholder advisory group, had advised investors to vote against Centrica’s remuneration report, but 90 per cent of shareholders backed the measures in June.

Earlier this month, it was revealed that many households are still struggling to pay their energy bills, despite prices falling.

The latest energy debt figures from Ofgem show levels now stand at a record £3.1bn.

National Debtline said its findings suggested 6.1m people were finding it hard to to settle their energy bills.

While the lower price cap would bring some relief, the service called for “urgent action” to help those facing unaffordable arrears.

It said energy debt was one of the most common debt types among those who contacted it for support.

Speaking in early July, Steve Vaid, chief executive of the Money Advice Trust, the charity that runs National Debtline, said: “The fall in the price cap will alleviate some of the pressure many households are under, but our findings show that many more will continue to struggle as energy bills remain high.

“As millions of people worry about keeping up with their energy payments, arrears levels have continued to increase and many have been left with unaffordable debts as a result.”