British Gas owner Centrica has unveiled record profits of over £3bn – more than treble that of last year – powered by soaring energy prices and historic market volatility.
Its mega £3.3bn earnings, which include the £485m offloading of its Spirit fossil fuel assets in Norway, are more than three times last year’s total of £948m and surpass its previous record profits of £2.7bn in 2012.
Profits have been driven by its oil, gas and nuclear divisions – with households grappling with record energy bills.
The FTSE 100 group also revealed that group adjusted earnings per share had skyrocketed from 4.1p per share to 34.9 per share, while its reinstated dividend policy was set at 3p per share last year.
The company now intends to extend existing £250m share buyback programme by an additional £300m, which at the current share price would result in Centrica buying back 10 per cent of its issued share capital in total.
Meanwhile, free cash flow from continuing operations has risen from £1.2bn to £2.5bn, including some big swings in working capital with £1.1bn inflow in British Gas.
Centrica’s lucrative trading follows oil and gas giants such as BP, Chevron, Equinor, Exxon, Shell, and Total reporting huge profits over the past 12 months – intensifying calls for a tougher windfall tax from the Labour Party.
It also comes with Centrica feeling the heat from an Ofgem investigation after The Times revealed it was forcibly installing prepayment meters in the homes of vulnerable customers struggling to pay energy bills.
However, British Gas only recorded £72m full-year profits reflecting the difference between the monster earnings of its oil and gas producers and the tight operating margins of household suppliers.
Centrica expects to record a tax charge of £1.07bn in 2022, while the impact of the windfall tax is estimated at £2.5bn until 2028 – when it is expected to be wound down.