Centrica Shares Make New 52 Week High as Dividend Increases

Centrica's share price (LON: CNA) hit a new 52 week high in the most recent session, touching 152.20 as the owner of British Gas reported financial results that exceeded market expectations, and announced an increase in its dividend.

Centrica's financial performance showed a decrease in EBITDA, reporting £2.3 billion for the year ended 31 December. This figure is lower than the £3.5 billion reported the previous year but is still ahead of analyst expectations, which were projected at £1.6 billion. The company outperformed on its adjusted earnings per share as well, reporting 19 pence compared to an anticipated 18.62 pence.

In response to these positive results, Centrica plans to raise its dividend by 13% to 4.5 pence. Furthermore, it has extended its share buyback program by an additional £500 million, signaling confidence in its future performance.

Looking ahead, Centrica aims to achieve an EBITDA run rate of £1.6 billion by the end of 2028. It also plans to increase the dividend per share to 5.5 pence by 2025, indicating a commitment to delivering value to its shareholders.

The chief executive, Chris O’Shea, attributed the company’s success to operational improvements and increased investment. In terms of future focus, Centrica is prioritizing investment in the energy transition and maintaining affordable energy for customers.

Furthermore, an important decision regarding the Sizewell C project is expected by May, with UBS analysts predicting Centrica's cash commitment for a 10-15% stake will not surpass £2 billion.

These developments highlight Centrica's strategic initiatives and strengthen investor confidence, as reflected in the market's positive reaction. Centrica's shares had previously been range trading through the first 8 weeks of the year, but are now up 9.95% year-to-date, with the last 5 trading sessions amounting for all of that (+10.63%). With the price threatening to break out, we have to look back to late 2023 at the 170 range for recent resistance if an upside move can materialise.