Centrica PLC

Centrica's fair value per share has been revised down from £2.22 to £2.17, driven by a shift in revenue growth assumptions from a 3.65% increase to a 0.33% decline. The net profit margin assumption rose from 3.45% to 3.89%, while the future P/E multiple was adjusted from 13.31x to 13.01x, with the discount rate unchanged at 7.38%. Analyst price targets have moved in both directions, with Berenberg raising its target to £2.30 from £1.90, while Citi lowered its target to £2.14 and JPMorgan cut its target to £2.27 from earlier higher levels, reflecting a more cautious view on upside despite maintained Buy and Overweight ratings.

London stocks closed lower on Thursday as the widening Middle East conflict and a surge in oil prices unnerved investors. The FTSE 100 index fell 77.80 points, or 0.7%, to 10,639.17, while the FTSE 250 dropped 1.3% and the AIM all-share lost 0.8%. Brent crude topped 100 dollars a barrel for the first time since May after Yemen's Houthi rebels attacked two Saudi tankers, and US President Donald Trump threatened Iran and the Houthis with major military punishment. The European Central Bank kept interest rates unchanged but signalled that higher energy costs could reignite inflation, with President Christine Lagarde suggesting another rate hike could come as soon as September. In London, oil majors BP and Shell rose 3.1% and 1.6% respectively, while Segro led the FTSE 100 with a 6.5% gain after saying it was prepared to recommend a takeover proposal from Prologis that values the company at around 14 billion pounds. Centrica sank 10% after reporting lower operating profit and revenue, and on the FTSE 250, CVS Group fell 6% despite higher annual revenue, citing a challenging UK economic backdrop.

Centrica reported lower first-half 2026 earnings with adjusted EBITDA of GBP 737 million and a free cash outflow of GBP 570 million, but raised its interim dividend by 9% to GBP 0.02 and reiterated its 2030 targets of GBP 2 billion in EBITDA and doubling earnings per share. Management attributed the weaker results to heavy transformation spending and external disruptions, including the Middle East war's impact on its optimization business. Retail EBITDA edged up to GBP 346 million, though the U.K. energy supply bad-debt charge rose to GBP 216 million, or 4% of revenue, with outstanding billed and unbilled debt at GBP 2 billion. The company is leaning harder into infrastructure-led growth, highlighting investments in assets such as the Severn combined-cycle gas turbine plant, Sizewell B, and Sizewell C, while warning that the Rough gas storage facility may close without a government-backed support framework.

British Gas owner Centrica plans to cut approximately 1,300 jobs over two years as part of an overhaul of its customer services and support teams. The reductions include about 500 contact-based roles in customer operations and additional cuts to offshore outsource support jobs, leading to an approximately 14% reduction in the customer operations workforce. The company is also proposing to reduce roles within group support functions to improve efficiency. Centrica said the overhaul responds to structural changes in customer behavior, with around 90% of customers now using digital support methods and customer contact falling sharply. A spokesman added that the company continues to invest in areas of demand, including recruiting more engineers and hiring 500 apprentices this year.