Centrica, the UK?s biggest gas and electricity supplier, on Thursday said that despite an uncertain outlook for wholesale energy prices this year it had made a good start to the year.
The owner of British Gas, which lost almost 1m customers in 2004 following a series of price rises, offered hope after saying its plan to refocus its business on core areas of expertise was beginnng to pay off as it reported a 16 per cent rise in operating profit to ?1.23bn ($2.34bn). Turnover was up 9 per cent at ?11.8bn.
Pre-tax profits before goodwill, amortisation and execeptional items rose from ?1.01bn to ?1.21bn in 2004.
Sir Roy Gardner, chief executive, said the group was beginning to win back customers as he described 2004 as ?another stage in the evolution? of the company.
Centrica has been hit by soaring wholesale gas and electricity costs, which rose 29 per cent last year. Those price rises were passed on to customers, triggering 1m to leave last year alone.
The group said on Thursday it was fighting back and hoped to win over customers with new products, such as its three-winter capped price dual fuel offer, and by using its ?cross-selling capabilities?. Sir Roy said that those initiatives were already having a positive impact with net losses beginning to narrow.
During the year Centrica sold the AA, the UK car breakdown services unit, realising a post-tax profit of ?740m. It also made a number of acquisitions including, a new power station, a windfarm and further gas reserves.
The group said on Thursday it remained committed to giving value to shareholders. During the year it raised the ordinary dividend payout ratio to 40 per cent of earnings and returned a further ?1.2bn to shareholders through a special dividend and a share buyback programme. The company is recommending a full-year dividend of 8.6p per share, up 59 per cent on 2003.
In North America the group said growth prospects were encouraging.
In mid morning trade the shares were up 0.93 per cent at 243?p.