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Centrica profit down 44%, to sell Clockwork

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Centrica   Basic earnings per share fell to 3.3 pence

Centrica reported fiscal 2018 profit attributable to shareholders of 183 million pounds, down 44 percent from 328 million pounds in the prior year.

Basic earnings per share fell to 3.3 pence from 5.9 pence last year.

The difference in profit compared to 2017 is due to the lower profit from business performance and a net loss from certain re-measurements compared to a net profit in 2017, partially offset by a lower post-tax net exceptional charge.

However, profit before taxation for the year was 575 million pounds, up from 137 million pounds last year.

Adjusted earnings for the period were 631 million pounds, compared to 693 million pounds last year.

Adjusted earnings per share were 11.2 pence, compared to 12.5 pence a year ago.

Group revenue for the year increased 6 percent to 29.69 billion pounds from 28.04 billion pounds in the previous year.

In addition to the interim dividend of 3.6 pence per share, the proposed final dividend is 8.4 pence, giving a total full year dividend of 12.0 pence, in line with 2017.

Looking ahead, Iain Conn, Group Chief Executive said, "Our 2019 financial performance will be impacted by the UK default tariff cap and continuing lower volumes in E&P and Nuclear, meaning our 2018-20 target range for average adjusted operating cash flow is under some pressure.

We are taking actions to strengthen the company in 2019 and improve underlying performance in 2020, including driving cost efficiency hard and delivering further divestments, and as a result net debt levels remain underpinned."

The company is targeting 2019 adjusted operating cash flow in the range 1.8 billion to 2.0 billion pounds, which is below the targeted range of 2.1 billion to 2.3 billion pounds on average over 2018 to 2020.

The company also projected a like-for-like headcount reduction of 1,500 to 2,000 in 2019 and said it is targeting 500 million pounds of non-core divestments in 2019.

Centrica said it plans to sell Clockwork, Inc., and certain of its affiliates in North America to Authority Brands, a home services franchise platform backed by funds advised by Apax Partners for $300 million, or 230 million pounds.

Clockwork consists of over 725 franchise territories, and 10 company-owned stores, and brands including One Hour Heating & Air Conditioning, Benjamin Franklin Plumbing, Mister Sparky electric, BuyMax, Success Academy and SuccessWare 21.

The sale is expected to close in the first half of 2019.

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