BUMPER half-year results from Scottish Gas-owner Centrica yesterday stoked speculation that the FTSE 100 stock could become a takeover target.
Jonathan Jackson, head of equities at Killik & Co, said: “In a sector that has seen a pick-up in merger and acquisitions activity, we believe Centrica would make an attractive bid target.”
A long winter pushed the group’s adjusted operating profits for the six months to 30 June up 9 per cent to just under £1.6 billion, on the back of a 14 per cent rise in revenues to £13.7bn.
Profits at its oil and gas division – which includes the former Aberdeen-based Venture Production business that was taken over in 2009 in a hostile £1.3bn acquisition – jumped by 32 per cent to £683 million.
The smaller gas-storage business also benefited from the colder weather, with profits jumping 31 per cent to £47m. British Gas – which trades as Scottish Gas here – grew its profits by a more modest 1 per cent to £569m, which still sparked criticism from consumer groups.
Sam Laidlaw, Centrica’s Scots-born chief executive, said: “With our customers using more gas to stay warm during the unusually cold winter, we’re doing everything we can to help them keep their energy costs under control and make bills clearer.
“We are also delivering for our shareholders, enabling us to continue to grow the business and invest to secure energy supplies for the future.”
Profits at Direct Energy – the group’s North American business – increased by 6 per cent to £165m. News of the rise came a day after Direct Energy bought Hess’s business-to-business arm, making it one of the largest players on the eastern seaboard of the United States.
Centrica’s interim dividend was raised by 6 per cent to 4.92p, while the firm ploughs ahead with its £500m share buy-back scheme, which has so far returned £240m to investors.
RBC Capital Markets analyst John Musk said: “Centrica reported first-half results about 5 per cent ahead of both our and consensus expectations. The beat was driven by a better-than-anticipated result in both the US and international gas.”