Centrica’s full-year figures set to dip

Centrica’s shares have fallen throughout its financial year and are set to be rounded off with softer full-year figures. 

A man walking by a British Gas sign
Source: Bloomberg

On Thursday 19 February Centrica is due to post its full-year figures. The adjusted earnings per share is expected to come in at £0.198, down from £0.266. Sales for the year 2014 are expected to improve, moving up from £26.571 billion to £27.454 billion. Full-year pretax profits are due to fall from £1.649 billion down to £1.611 billion.

Given the performance we have seen in energy prices over the last twelve months, it is no surprise that the institutional outlook for Centrica has been dented. Nine brokers have given the company a buy rating, eleven a hold and five a sell. An example of the uncertainty surrounding the company can be seen in its average twelve-month price target, currently below the market price of 288p, at 283p.

Falling oil prices have seen its operating costs tumble and enabled the company to improve its profit margins. The large percentage falls in the commodity price have also allowed the energy supplier to cut its tariffs by large percentages. These falling prices should keep OFGEM off its backs for a while. However, this has not dented the company’s ability to pay a healthy dividend to shareholders, and with a yield approaching 6% it will have many long-term holders eager to benefit from the income return.

The 200-day moving average has proven a firm roof for any moves higher, and once again the recent move to 300p saw sellers come back in. Markets are expecting softer figures, but managerial forward guidance could be as important as the markets' reaction to its full-year figures.

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