This article first appeared on GuruFocus .
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Adjusted EBITDA:GBP737 million, down versus last year.
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Adjusted Earnings Per Share (EPS):6.8p.
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Free Cash Outflow:Almost GBP600 million.
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Net Cash Position:Just over GBP700 million at the end of the period.
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Interim Dividend:Raised by 9% to 2p.
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Retail EBITDA:GBP346 million, slightly higher than last year.
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Infrastructure EBITDA:GBP355 million, down by GBP150 million versus last year.
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Rough EBITDA:Almost GBP60 million.
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Bad Debt Charge:Just over 4% of revenue.
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Investment:GBP90 million in the first half, including GBP20 million of CapEx.
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Operating Costs:Down 3% year on year in nominal terms.
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Free Cash Outflow:GBP570 million.
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Closing Net Cash Position:GBP709 million.
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Full-Year Investment Expectation:Around GBP1.1 billion.
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Warning! GuruFocus has detected 3 Warning Sign with BOM:541540.
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Is CPYYF fairly valued? Test your thesis with our free DCF calculator.
Release Date: July 23, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Centrica PLC ( CPYYF ) has made significant progress in transforming into a more predictable business, with investments supporting growth in power demand and stable earnings.
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The company has ambitious targets, including achieving GBP2 billion of EBITDA and doubling EPS by 2030, with a clear strategy to deliver these goals.
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Centrica PLC ( CPYYF ) is well-positioned to capitalize on the growing demand for electrification and AI, with a strong operational foundation and expanding product range.
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The acquisition of Severn CCGT has been a positive addition, performing better than expected and contributing to earnings growth.
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The transformation program is underway, with GBP90 million invested in the first half, leading to operational efficiencies and cost reductions.
Negative Points
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Centrica PLC ( CPYYF ) faces challenges from the Middle East conflict, impacting its energy portfolio and limiting upside opportunities.
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Retail growth is not meeting expectations, with EPS slightly lower year-on-year due to increased transformation investment and higher bad debt.
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The company is dealing with industry-wide bad debt challenges, with a charge of over 4% of revenue, and is seeking regulatory support to address this issue.
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LNG profitability was lower in the first half, affected by normalized commodity prices and market disruptions.
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The future of the Rough gas storage asset remains uncertain, with ongoing discussions with the government needed to secure its redevelopment.
Q & A Highlights
Q: What is Centrica's plan to address the issue of bad debts, which is becoming a strain on the balance sheet? A: Chris O'Shea, CEO, explained that the price cap is here to stay, and the industry debt is forecast to rise significantly. Centrica is seeking leadership from the regulator and suggests a social tariff as a long-term solution. Russell O'Brien, CFO, added that the bad debt charge has increased, and efforts are being made to improve collections, but broader regulatory action is needed.
Q: What are the expectations for Centrica's optimization business to reach the GBP300 million to GBP400 million target? A: Russell O'Brien, CFO, stated that the optimization business consists of R2H, LNG, and Gas and Power. R2H is expected to continue growing, while LNG and Gas and Power trading face challenges due to market volatility. The company is confident in reaching the target as market conditions stabilize and new LNG supplies come online.
Q: Can you provide an update on the Rough gas storage discussions with the government? A: Chris O'Shea, CEO, mentioned ongoing discussions with the government about Rough's future. The company has proposed using working capital to fill the reservoir, with the government taking the price risk. However, a decision is needed soon to prevent the asset from closing.
Q: How does Centrica view the balance between investment for growth and share buybacks? A: Chris O'Shea, CEO, emphasized that Centrica has a pipeline of attractive investment opportunities that could create more value than share buybacks. However, if these opportunities do not materialize as expected, the company is open to returning money to shareholders.
Q: What is the outlook for Centrica's earnings volatility and credit rating improvement? A: Russell O'Brien, CFO, explained that Centrica's strategy to rebalance its portfolio towards more stable cash flows is credit positive. The company expects reduced earnings volatility as it moves away from merchant exposure and increases contracted and regulated cash flows, which should positively impact credit ratings.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
