Centrica H1 Earnings Call Highlights

Key Points

• Centrica reported weaker first-half 2026 earnings, with adjusted EBITDA of GBP 737 million and free cash outflow of GBP 570 million, but it still raised its interim dividend by 9% and reiterated its long-term targets. Management said the results were weighed down by heavy transformation spending and external disruptions.
• Retail performance improved, but bad debt stayed elevated, with the U.K. energy supply bad-debt charge rising to GBP 216 million and outstanding billed/unbilled debt at GBP 2 billion. Centrica said customer satisfaction and self-service metrics are improving, while calling for stronger regulatory support on industry-wide debt issues.
• The company is leaning harder into infrastructure-led growth, highlighting investments in assets such as Severn, Sizewell B and other power infrastructure as it aims for more predictable cash flows. Centrica reaffirmed its 2030 goal of GBP 2 billion in EBITDA and doubling EPS, while saying Rough gas storage now depends on a government-backed framework to avoid closure.

Centrica LON: CNA reported lower first-half earnings for 2026 while raising its interim dividend and reiterating long-term targets, as executives said the company is investing heavily to reshape its portfolio toward more predictable infrastructure-led cash flows.

Chris, who led the presentation, said Centrica has continued its effort to become “a higher quality, more predictable business,” though he acknowledged that “not everything’s gone our way.” He cited the Middle East war’s impact on Centrica Energy, slower-than-desired delivery in parts of the portfolio and Retail growth that is “not yet” where management wants it.

Chief Financial Officer Russell O’Brien said adjusted EBITDA was GBP 737 million in the first half, down from last year, while adjusted earnings per share were GBP 0.068. Free cash outflow was GBP 570 million, leaving the group with net cash of GBP 709 million at period end. Centrica raised its interim dividend by 9% to GBP 0.02.

O’Brien said the results reflected a significant step-up in spending on transformation. Centrica invested just over GBP 90 million in the first half, including GBP 20 million of capital expenditure. Chris said that excluding the investment, EPS would have risen 8% year over year.

Retail performance improves, but bad debt remains elevated

Retail EBITDA was GBP 346 million, slightly above last year, reflecting stronger operational performance and favorable price effects. O’Brien said those factors offset higher transformation investment, higher bad debt and a more normalized result in the business segment.

Bad debt remained a major issue. O’Brien said the charge in the U.K. energy supply business was GBP 216 million, or 4% of revenue, compared with GBP 159 million, or 3%, a year earlier. He said billed and unbilled debt outstanding on the balance sheet after provisions stood at GBP 2 billion.

Chris said industry debt is forecast to reach GBP 7 billion by year-end, up from GBP 1.8 billion three or four years ago, and called for more leadership from the regulator Ofgem. He said Centrica supports a longer-term social tariff using government data to distinguish between customers who cannot pay and those who choose not to pay.

At the same time, Centrica pointed to improving customer metrics. O’Brien said customer satisfaction was up and engineer productivity was improving. Chris said customer contact per customer was down 20% year over year, while most customers now self-serve through the app.

Centrica Energy hit by market disruption but guidance maintained

Centrica’s optimization business generated GBP 87 million of EBITDA in the first half. O’Brien said gas and power trading had a good first half, supported by structural volatility and asset-backed and algorithmic strategies, though markets driven by non-market fundamentals remained challenging.

He said LNG profitability was lower, partly because commodity prices normalized and partly because Centrica delayed cargoes into the second half to maximize value. The Middle East crisis caused price dislocations and volatility, but also temporarily reduced Asian LNG buying and disrupted shipping and insurance markets, limiting Centrica’s ability to capture additional value from its fully hedged physical portfolio.

O’Brien said Centrica Energy remains on track to deliver around GBP 250 million of EBITDA in 2026. However, he said the conflict has implications for 2027 because Centrica had positioned its portfolio for higher global LNG supply and weaker gas prices. As risk conditions changed, the company reduced exposure to upside opportunities. O’Brien said EBITDA in 2027 is currently expected to be around the level delivered in 2025 and expected in 2026, while longer-term earnings are still expected to grow to GBP 300 million to GBP 400 million by the end of 2028.

Infrastructure investments become central to strategy

Infrastructure EBITDA was GBP 355 million, down GBP 150 million year over year. O’Brien said more than GBP 100 million of the decline was due to the Spirit Energy disposal, with production outages and lower nuclear realized prices also acting as headwinds. Gains came from the meter asset provider business, Grain LNG and Sizewell C, which together generated almost GBP 90 million of EBITDA in the first half.

Centrica now expects full-year investment of around GBP 1.1 billion following the acquisition of Severn. Chris said the Severn acquisition adds a high-quality dispatchable combined-cycle gas turbine asset with contracted underpin and upside optionality as volatility grows. He said performance since acquisition has been better than expected due to tight market conditions.

The company also highlighted progress at Sizewell B, where a contract for difference will turn merchant exposure into predictable regulated earnings from 2035 and support baseload power into the 2050s. Chris also said life extensions were announced for Heysham 1 and Hartlepool, aligning them with the rest of the advanced gas-cooled reactor fleet.

Rough storage future depends on government decision

Chris gave a stark update on Rough, the U.K.’s largest gas storage asset. He said Centrica has not injected gas into the reservoir this summer without a support framework in place, and that by winter Rough will be “close to empty” and producing less than 2% of what it could deliver if redeveloped.

He said Rough provides half of current U.K. gas storage capacity and is the country’s biggest hydrogen storage opportunity. Centrica’s current production consent expires in April next year, and Chris said the company does not currently intend to seek an extension. He said the asset’s future is not simply a commercial decision for Centrica and that allowing it to close would be “a strategic and major loss for the U.K.”

Management reiterates 2030 ambitions

Centrica reiterated its targets of GBP 2 billion of EBITDA by 2030 and doubling EPS against 2025. O’Brien said the company is targeting GBP 500 million of underlying savings while keeping nominal costs flat to 2030. He said operating costs were down 3% year over year and that 1,300 role reductions had been announced across the group.

Chris said Centrica is pursuing opportunities tied to rising power demand, electrification, artificial intelligence and data centers. He said the company’s customer relationships, trading expertise and infrastructure capabilities allow it to connect generation, tariffs, services and energy optimization in ways competitors may struggle to match.

Asked how much of the 2030 EPS target is already underpinned, Chris said Centrica has “clear line of sight” but that the outcome is not “in the bag.” O’Brien said the infrastructure side is easier to see, citing Sizewell C, the meter asset provider business, Irish peakers and a potential Galway plant, while Retail and optimization would need to move toward the top of their guidance ranges by the end of the decade.

About Centrica (LON:CNA)

Centrica is energising a greener, fairer future for our colleagues, customers and communities. Our integrated business operates across the energy value chain, with over ten million Retail customers, leading brands such as British Gas and Bord Gáis Energy, and the UK's largest energy services workforce. Our Infrastructure businesses bring gas and electricity to the market every day and provide more than half of the UK's gas storage capacity, while our Optimisation business delivers world-class procurement and route-to-market capabilities to the Group and third parties, supporting energy security and our customers' decarbonisation journeys.

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