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British Gas owner Centrica predicts eightfold rise in earnings as energy prices soar

Centrica: Surge in earnings comes as eight million households face fuel poverty amid soaring energy bills. Photo: PA/Alamy
Centrica: Surge in earnings comes as eight million households face fuel poverty amid soaring energy bills. Photo: PA/Alamy

Centrica (CNA.L), the owner of British Gas, expects a near eightfold increase in its earnings as energy prices soar.

The UK energy group said on Thursday that it expected to report adjusted earnings per share (EPS) of more than 30p when it publishes its 2022 results in February.

EPS – a measure of profitability calculated through the number of shares in circulation – had previously stood at the upper end of a 15.1p to 26p guided range following several upgrades.

Wholesale gas costs later hit record levels and were kept high as supplies were squeezed amid Russia's war in Ukraine and the subsequent Western sanctions imposed on Moscow for its invasion.

Read more: Over 1.4 million households facing mortgage hike

It is the third time Centrica has upgraded its annual expectations this financial year, and the second time in three months.

In a surprise statement to investors, Centrica said it had “continued to deliver strong operational performance from its balanced portfolio” and expects to have more than £1bn of cash on its balance sheet for this year.

Centrica did not explain what it was basing this new conclusion on, instead it will update shareholders further in February.

Shares in Centrica rose by more than 5% following the news.

Russ Mould, investment director at AJ Bell, said: "Higher energy prices are not bad news for everyone – with Centrica once again upgrading forecasts.

"How much credit the business itself can take for its revived fortunes is an open question but, for now, financial performance is undoubtedly strong."

Campaigners predict the number of households in fuel poverty will increase to 8.4 million from April when government support drops.

Read more: UK households to be £2,100 worse off amid cost of living crisis, think tank warns

The energy company has tried to avoid criticism over its profits by making a £50m voluntary payment to help customers with the cost of living crisis.

Centrica is the largest electricity and gas supplier to British households and serves more than 10m customers.

Martin Young, an analyst at Investec, forecasts 2022 earnings per share at Centrica of 25.4p and pre-tax profits of £2.4bn.

Watch: Why are gas prices rising?