Centrica hikes dividend despite market volatility slows progress

Centrica PLC (LSE:CNA) hiked its interim dividend 9% despite lower first-half profits, where energy-market volatility meant progress in parts of the British Gas owner’s business was “slower than we would like”. Underlying earnings (EBITDA) of £737 million were reported in the six months to June, down 18% compared to a year earlier. Statutory profit before tax swung to £672 million from a £43 million loss. Infrastructure earnings fell 30% to £355 million, mainly reflecting Spirit Energy disposals, outages and lower realised prices from its nuclear operations. British Gas EBITDA rose 2% to £346 million as better commercial performance and favourable pricing outweighed higher bad debts and spending on a transformation programme. Free cash flow swung to an outflow of £570 million from an inflow the year before, reflecting £698 million of capital investment, including the acquisition of the Severn gas-fired power station and expansion of its Meter Asset Provider business. Net cash shrank to £709 million from £1.5 billion at the end of last year, though Centrica raised its interim dividend by 9% to 2.0p per share. For the full year, the company expects retail EBITDA towards the lower end of its £500-800 million range. Infrastructure EBITDA is forecast at £650-750 million, while optimisation should contribute around £250 million. Chief executive Chris O’Shea said: "Volatility across energy markets has created challenges in some parts of our business, and some of our delivery has been slower than we would like. "However, we have continued to invest with discipline to strengthen our portfolio and support long-term growth, making progress pivoting the group towards more stable and predictable ear...