Market report

British Gas profits surge tenfold | SMS bid update

British Gas reported a tenfold surge in pre-tax profits after Ofgem raised the energy price cap.

British Gas

Earnings for Britain’s largest household energy supplier rose to £751 million from £72m in 2022.

The figures helped drive adjusted operating profits for parent company Centrica to £2.72 billion, ahead of consensus, but down from the record £3.3bn in 2022.

The board proposes a dividend of 2.69p per share taking the full-year total to 4p, up 33%.

On a pre-tax basis Centrica swung to a pre-tax profit of £6.47bn from a £383m loss a year earlier driven by its British Gas energy unit.

Sharon Graham, Unite general secretary, said the results showed that Centrica was “still raking in astonishingly high profits off the back of exorbitant energy bills that are nearly double what they were three years ago”.

Shares in Centrica were up 3.1p (2.31%) at 137.5p in mid-afternoon trade.

Smart Metering Systems

Smart Metering Systems said 38.2% of shareholders have accepted the £1.3 billion offer from Kohlberg Kravis Roberts and those who have not yet voted have until 1 pm on 24 March to do so.

The Glasgow based company received the bid, valuing each share at 955p,on 7 December and the terms were subsequently changed from a scheme of arrangement requiring a 75% vote in favour to a straight offer requiring a simple majority.

The offer price represents a 40.4% premium to the closing price of 680p on 6 December.

Pound falls on recession news

Sterling dropped to fresh lows for the week after it was confirmed the UK fell into recession in the second half of 2023.

The pound to euro exchange rate fell to 1.17 from 1.1710 in the minutes after the ONS said the UK economy shrank 0.3% quarter-on-quarter in the final quarter of 2023, which makes for two consecutive quarters of contraction owing to Q3’s shrinkage.

While the shrinkage was expected the figure was worse than the -0.1% reading the market expected and the pound to dollar rate dipped to 1.2558 from 1.2566.

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