Diversification plan is paying off for Centrica

Energy giant Centrica today claimed the policy of developing its upstream wholesale gas business is paying off, as it posted a 65% hike in half-year operating profit to £1.6 billion.

The profit included first-time contributions from Centrica's acquisitions of North Sea gas producer Venture Production and British Energy, and the newly commissioned gas-fired Langage power station.

They were part of its strategy to expand into both wholesale energy and household services to limit the impact of fluctuating gas prices,
Today Centrica — the owner of British Gas — said that plan was paying off, with higher gas production levels offsetting lower power prices.

It now wants to snap up further assets, particularly in North America and the North Sea.

Chief executive Sam Laidlaw said the firm is also focusing on investing in infrastructure in Britain.

He said: "The UK needs a lot of its energy infrastructure replacing. We're spending
£1.2 billion a year on new offshore wind projects and gas production."

Keith Bowman, analyst at Hargreaves Lansdown stockbrokers, said: "The figures largely reflect Centrica's expansion, aided by one of the coldest winters on record.

"The group's transformation from a supply business to a fully integrated production and supply company remains the dominant story, and is aided by a supportive and progressive dividend policy. Market consensus continues to denote a buy."