Centrica Shares Surge on £4 Billion Investment Plan, Buybacks

(Bloomberg) -- Centrica Plc rose the most in four years in London trading after announcing plans to return more cash to investors and unleash spending.

The owner of British Gas will repurchase an additional £500 million ($630 million) of stock, adding to a windfall that’s flowed to shareholders since the 2022 energy crisis drove up profits. It’s also embarking on a £4 billion investment program, responding to pressure to set out future spending plans.

“Investor expectations were limited,” Citigroup Inc. analyst Jenny Ping wrote in a note. “But today’s announcement should provide new visibility to the equity story.”

The shares jumped as much as 11%, the most since November 2020, and traded up 7.9% at 146.65 pence as of 9:29 a.m. in London.

Centrica, sitting on a £2.9 billion cash pile, had been awaiting government guidance on investment in regulated assets before making key decisions, and on Thursday indicated that talks have progressed.

About £2 billion of the investment plan has been committed, partly for expansion in the Irish power market, the company said. The firm also announced a 15-year supply deal for liquefied natural gas with Petroleo Brasileiro SA.

Although it’s pressing ahead with the spending program, there’s still uncertainty around its involvement in the Sizewell C nuclear project in eastern England, of key interest to investors.

Chief Executive Officer Chris O’Shea said Thursday that the company “remains interested,” but reiterated that Centrica’s participation in any UK infrastructure projects, including Sizewell, hinges on the “right conditions.” He said he expects more clarity from the government’s spending review due midyear.

Centrica also announced 2024 results on Thursday, posting adjusted earnings per share of 19 pence, broadly in line with estimates, and capital expenditure of £600 million.

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