Interim Results 2000
Centrica PLC
7 September 2000
Centrica plc
Interim Results
for the 6 months ended 30 June 2000
(unaudited)
SUMMARY
6 months 6 months Year ended
ended ended 31 December
30 June 30 June 1999
2000 1999
Turnover £4,707m £3,887m £7,217m
Group operating profit £390m £255m £335m
Profit before tax, £401m £286m £417m
exceptionals and goodwill
amortisation
Earnings before exceptionals £364m £243m £331m
and goodwill amortisation
Operating cash inflow before £484m £901m £1,453m
exceptionals
Cash inflow / (outflow) £292m £274m £(690)m
before financing
Earnings per ordinary share 8.5p 4.0p 4.3p
Earnings per ordinary share 9.2p 5.5p 7.9p
before exceptionals and
goodwill amortisation
Dividend per ordinary share 1.1p 1.0p 2.5p
The main features include:
Earnings, before exceptional charges and goodwill amortisation, up by
50%
Market share in the residential gas market in Great Britain just under
72%
3 million electricity customers on supply
Continuing improvements in customer service
Gas production volumes increased by 10%
AA businesses performing on target and integration going well
Interim dividend declared of 1.1p, up by 10%
Direct Energy acquisition completed on 18 August 2000, for £406
million, bringing a base for growth in North America
Telecom products launch announced
CHAIRMAN'S STATEMENT
In the first half of 2000 we have continued to develop Centrica as the
leading supplier of products and services in and around the home. We
continue to be satisfied with the retention of residential gas customers
in Great Britain, with a market share of just under 72%. As a result of
our success in growing our base of residential electricity customers, we
have raised our target so as to have 4 million customers on supply by
the end of the year. The Automobile Association (AA), which we acquired
in September 1999, is being integrated with our other business
activities and is on target to deliver the planned benefits. AA
personal and associate membership increased by 5.9%, giving a higher
roadside assistance market share.
Financial Performance and Position
I am pleased to report a substantial increase in profits. First half
earnings before exceptional charges and goodwill amortisation were £364
million, an increase of 50% compared with the six months to June 1999.
The improvement largely came from lower gas and transportation costs,
lower gas business operating costs, a 10% increase in own gas production
and the inclusion of the AA businesses. The market prices for gas and
oil however, both of which represent material index constituents in our
long-term gas contracts, have increased sharply since 1999. These
increases will feed through into our gas costs from October 2000, when
the new gas year starts.
Group cash inflow in the period was £292 million (1999; £274 million)
and net cash and money market investment balances as at 30 June 2000
stood at £174 million (1999; £498 million).
Customer Service
All of our businesses have continued to focus on improving service.
Customer surveys show that there have been continuing improvements in
performance across the British Gas brands and that satisfaction levels
remain high for AA members and Goldfish customers.
Dividend
In 1999 we paid our first interim dividend of 1p per share. I am
pleased to report that the Board have declared an interim dividend for
2000 of 1.1p per share, an increase of 10%.
Strategy
Our strategy continues to be one of growth. In our home market we are
investing in our brands and in developing the range of services we can
offer to new and existing customers. Our telecommunications business
will soon be launching a package of attractive product offers and we
intend to expand our range of financial services. Increasingly we are
using the e-commerce channel for conducting business across all parts of
the Group. Our business model is now being extended internationally
with the acquisition of Direct Energy in Canada, which provides us with
a platform to extend our strategy into North America.
Sir Michael Perry, CBE
Chairman
CHIEF EXECUTIVE'S REVIEW
Group Results
Turnover
Group turnover from continuing operations at £4,707 million was 23%
higher than in the first half of 1999. Higher volumes of wholesale gas,
growth in the electricity customer base and inclusion of sales made by
the Automobile Association (AA) business units were primarily
responsible for the increase. Gas sales in the residential market
reduced by 6% compared with the first six months of 1999; market share
as at 30 June 2000 was 71.7% (31 December 1999; 73.3%).
Gross profit
The Group's gross profit of £1,133 million was £268 million higher than
in the first six months of 1999. The main improvements came from lower
unit costs of gas and transportation, higher non-residential gas selling
prices, an increase in own gas production, the inclusion of the AA for
the first six months of 2000, and growth in our electricity customer
base. These improvements were partly offset by lower selling prices and
volumes in the residential gas market.
Operating costs
The inclusion of AA business segments for the first half of 2000, growth
in our electricity customer base, and additional revenue investments,
including the development of our Telecoms business, were the main
reasons for the rise in operating costs compared with the first half of
1999. We continue to drive down costs in our established businesses, and
in particular we achieved a £46 million (14%) reduction in operating
costs in our residential gas supply business, when compared with the
first half of 1999.
Our strategy is to invest for growth. Much of this investment has a
direct impact on our short-term profitability. In the first half, and
in addition to capital expenditure, we invested a total of £81 million
(1999 first half; £70 million) in growing our electricity customer
base, establishing our Telecoms business in preparation for its product
launch, e-commerce developments and launching other new products. In
addition the £79 million invested in marketing (1999 first half; £51
million) will ensure the continuing strength of our consumer brands.
Exceptional charges and goodwill amortisation
The goodwill amortisation charge of £25 million primarily related to the
acquisition of the AA in 1999. Restructuring costs of £3 million were
also incurred mainly in respect of integration of the AA.
Net interest
Net interest payable of £17 million arose compared with net interest
receivable of £7 million in the first half of 1999. These figures
include notional interest charges, which arise on the unwinding of
discounted liabilities. The switch from interest receivable to payable
was the result of a reduction in average net cash and investment
balances. These balances decreased largely as a consequence of the
acquisition of the AA in September 1999 for a net cash outflow of £780
million, and the £530 million special dividend which was paid to
shareholders in June 1999.
Taxation
The tax charge of £37 million (1999; £43 million) mainly related to
offshore gas production activities which are ring-fenced for tax
purposes. Taxable profits in other businesses are largely offset by tax
losses brought forward from earlier years.
Cash Flow
Operating cash flow before exceptionals from continuing operations was
£484 million compared with £920 million in the first six months of 1999.
This reduction was largely caused by the timing of transportation
payments (£270 million), the lower rate of decline in residential gas
customer receivables, and gas contract renegotiation payments.
Acquisitions
Integration of the AA into the Centrica structure is going well and the
business performance is in line with our expectations. Integration
costs will continue to be incurred over the next two years.
E-commerce
We believe e-commerce is of growing importance to our future success.
Our brands are well suited for trade over the Internet and this medium
is also ideal for delivering customer services, such as billing and on-
line payments.
The popular Goldfish Guide has now been put on-line, with the site
providing advice and guidance on major purchases, helping consumers
through the whole buying process. The Goldfish credit card is now
internet enabled and customers can view and pay their bills, redeem
their loyalty points and take up other offers. The AA's on-line
insurance facility recently won the e-commerce category at the Insurance
Awards ceremony.
Customer Relationships
Centrica regards Customer Relationship Management (CRM) as central to
the Group's strategy. Across our businesses we serve some 18 million
households, who take from us approximately 34 million products and
services each year, giving us one of the largest customer bases in Great
Britain.
In the first half of 2000 we have continued to invest in CRM capability,
and this is reducing our cost of customer retention and acquisition, as
we better understand and meet our customer needs.
Customer Service
During the first six months of this year complaint volumes to the Gas
Consumers Council have continued to fall, down 23% on last year. Home
Services' complaints were down by 7% and Gas Supply complaints were 26%
lower.
The efforts we have made, together with Ofgem, to improve and simplify
the process for customers changing supplier, have reduced the number of
complaints within the change of supplier category by 33% compared with
the first half of 1999.
PERFORMANCE BY BUSINESS
Energy Supply
Our Energy Supply business has grown in the six months ended 30 June
2000, with our share of the residential gas and electricity energy
market in Great Britain rising from 35% at 30 June 1999 to 38% at 30
June 2000. We were supplying 3 million customers with electricity as at
30 June 2000, and we are now well on the way to achieving our revised
target of 4 million electricity customers on supply by the end of 2000.
The rate of customer losses in the residential gas market continues to
decline, and our market share stood at 71.7% as at 30 June 2000 (30 June
1999; 76.4% and 31 December 1999; 73.3%).
Operating profit (including our share of joint venture results, but
excluding exceptional items and goodwill amortisation) was £399 million,
an increase of £92 million compared with the first half of 1999. The
improvement was achieved primarily in the residential gas market with
profit rising by £56 million to £256 million. Lower unit gas and
transportation costs, and lower operating costs, were partly offset by
reduced volumes as a consequence of competition, and falling average
selling prices. The market price for gas and oil has risen sharply
since 1999 though to a large extent this has not yet fed through to our
own gas costs. Our gas portfolio will however experience material cost
increases from October 2000, as the impact of indexation feeds through
in the new gas contract year.
A better first half performance was also achieved in the non-residential
gas market where a profit of £17 million was achieved compared with £2
million in the first six months of 1999. This improvement arose from
higher unit selling prices, lower unit gas and transportation costs, and
lower operating costs. As in the residential gas market, the margins
experienced in the first half will not be sustainable as our unit gas
costs will increase from October 2000.
Operating profit from our gas production activity at £171 million was up
£7 million compared with the first half of 1999. Production volume at
2.3 billion therms was up by 10%, and was significantly higher than
planned. For much of the first six months of 2000, production from the
South Morecambe field was close to maximum capacity. This high rate of
production was maintained in order to take advantage of rising gas
prices in the market place. The profits from this higher than planned
level of production and higher prices were partly offset by losses
incurred on hedging contracts, which to some extent protect the Group
against the possibility of gas prices falling.
Electricity contributed £41 million of gross profit, on sales of 5.4
terawatt-hours to an average of 2.6 million customers on supply. In the
first half of 1999 the gross profit from electricity sales was £6
million, based on 0.7 terawatt-hours and 0.4 million customers. In the
first half of 2000 a further £50 million was invested in growing the
customer base, which contributed to a loss in electricity of £45
million, compared with a loss of £59 million in the first half of 1999.
Since we entered the electricity market in Great Britain, a total
investment of £277 million has been incurred.
We have been active in the implementation of the industry's New
Electricity Trading Arrangements (NETA), which are expected to become
live in the fourth quarter of this year. Electricity pool prices were
volatile in the first half of 2000, though our exposure to pool price
movements was mitigated by the use of forward contracts. For the medium
term we continue to seek out equity interests in electricity generation
assets so long as they can be obtained at realistic cost.
Home Services
Operating profit before exceptional charges at £9 million was 12% higher
than the £8 million achieved in the first half of 1999. Turnover
increased to £303 million, 7% higher than the first six months of 1999.
The number of gas service cover contracts, at 3.2 million as at 30 June
2000, showed an increase of 100,000 compared with the position as at 30
June 1999. Gas central heating system replacement volumes declined
following another mild winter, although our market share remains stable.
The first half of 1999 also benefited from sales generated by our former
retail operation, which was closed during the second half of 1999. Buy
now pay later incentives and marketing campaigns are being used to
stimulate more demand for the second half.
Our plumbing and kitchen appliance maintenance products are proving
popular. During the period plumbing contracts increased by 71,000 to
312,000 as at 30 June 2000, and kitchen appliance contracts grew by
73,000 to 145,000. A new plumbing and drains contract has recently been
under trial and we expect to launch this product nationally later this
year.
Our home security business is one of the UK's largest suppliers of
monitored alarms for the home, with new alarm installations of just over
6,000 in the first half. We are currently developing new channels to
market, affinity deals and a new wireless system, and have recently
become the preferred supplier of security systems for Beazer homes.
Road Services
An operating profit before exceptionals and goodwill amortisation of £18
million was achieved in the six months ended 30 June 2000. Group
results did not include AA activities for the same period in 1999, but
if they had (i.e. on a pro-forma basis), we would have reported a profit
for Road Services of £3 million during that period. The improvement in
financial performance was the result of cost reductions, for example as
a result of reducing the number of deployment centres, and improved
efficiencies arising from operational integration with Home Services.
Out of a total membership of 9.8 million, at 30 June 2000, personal and
associate AA members numbered 6.4 million, an increase of 357,000 (5.9%)
over the number at 30 June 1999. During the first half of 2000 we
attended almost 2 million breakdowns, with an average 'call to arrive'
time of just under 35 minutes. For the second year running, the AA has
been voted the best all round breakdown service by the JD Power survey
of 24,000 motorists.
Financial Services
In Financial Services, we made an operating profit before exceptionals
and goodwill amortisation, but including share of joint venture results,
of £9 million (1999 first half; loss of £7 million). On a pro-forma
basis, i.e. including AA Financial Services, turnover increased by 8%
compared with the first half of 1999, and operating profit in the first
half of 1999 would have been reported as £5 million.
Against the backdrop of rising premiums, price competition in the motor
insurance market place has intensified, driving up the level of 'churn'.
This resulted in a decline in the number of motor policies taken up by
our customers in the first half, although premiums increased from £136
million in the first half of 1999, to £141 million in the first half of
2000. In home insurance we achieved strong quotation conversion and
customer retention rates.
In June 2000 we introduced Churchill Insurance onto our panel of
Insurers. This has been seen as a significant change within the
industry, as it represents an innovative link-up between an intermediary
and a major direct underwriter. This provides us with enhanced
competitive rates, ensuring our customers continue to receive the best
value and choice in line with our 'Trusted First Choice' positioning.
We continue to seek further opportunities to grow our insurance panel to
ensure that we remain competitive.
We have continued to invest in the development of the AA Internet site.
'Rapid quote' is now available and the facility for customers to make on-
line amendments is due to go live shortly. We are actively promoting
our Internet presence to maintain our competitive advantage in financial
services.
Our credit business operates primarily through joint ventures, which as
at 30 June 2000 had in excess of £1 billion of customer receivables
under management across the AA and Goldfish brands, with a range of
products including credit cards and personal loans. In a very
competitive environment, we have been able to maintain our position in
the market.
In the first quarter of 2000 we successfully trialled our Goldfish ISA.
This has highlighted the strength of the Goldfish brand and we are
currently evaluating the potential to develop the brand over a broader
range of financial service products.
Other Activities
Other Activities include the AA driving school, signs and publishing
businesses, the Goldfish Guide, and a number of other development
activities. The results for the six months to 30 June 2000 reflect
substantial investments in telecommunications and in e-commerce.
Outlook
On 18 August 2000 we completed the acquisition of Direct Energy
Marketing Limited, a Canadian company, for £406 million. Direct Energy
has approximately 820,000 gas customers, primarily in Ontario and owns
and operates natural gas reserves in Alberta. It also has a 27.5%
equity interest in Energy America L.L.C., which currently has 450,000
customers in the United States. The acquisition provides us with a
strong energy customer base in North America, where parts of the
Canadian electricity market are due to open to competition in 2001, and
the US gas and electricity markets are in the early stages of
deregulation.
As already reported in the press, we have now started the launch of our
telecommunications products. An advertising programme will run from the
end of this month, with customers being connected in October.
We are making good progress in building our e-commerce capability in an
integrated way across our businesses. Our future plans include the
development of leading sites for the motorist and traveller, the home
and for personal finance.
In the first half our gas purchase contract position largely protected
us from the substantially higher and more volatile gas prices that have
prevailed in the market place since the early part of this year. Our
externally sourced gas costs are expected to rise by just over 3p per
therm from October 2000 however, as a result of indexation, including
that due to oil price increases. This is against a backdrop of an
increase in the annual market price of gas of 9p per therm, since
January 2000.
Our balance sheet remains strong enabling us to continue with our
programme of investment for long-term growth. The second half will see
further revenue investment aggregating some £120 million in our
electricity customer base, in financial services, e-commerce and our
telecommunications business, up £20 million on the second half of last
year.
Having taken into account our performance in the first half, the
increase in gas costs from October 2000 and our planned level of
investment, we expect to achieve satisfactory progress for the year as a
whole.
Roy Gardner
Chief Executive
Independent review report to Centrica plc
Introduction
We have been instructed by the Company to review the financial
information set out on pages 10 to 16 and we have read the other
information contained in the interim report for any apparent
misstatements or material inconsistencies with the financial
information.
Directors' responsibilities
The interim report, including the financial information contained
herein, is the responsibility of, and has been approved by the
Directors. The Listing Rules of the Financial Services Authority
require that the accounting policies and presentation applied to the
interim figures should be consistent with those applied in preparing the
preceding annual accounts except where any changes, and the reasons for
them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in
Bulletin 1999/4 issued by the Auditing Practices Board. A review
consists principally of making enquiries of group management and
applying analytical procedures to the financial information and
underlying financial data and, based thereon, assessing whether the
accounting policies and presentation have been consistently applied
unless otherwise disclosed. A review excludes audit procedures such as
tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit performed
in accordance with Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly we do not express an
audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material
modifications that should be made to the financial information as
presented for the six months ended 30 June 2000.
PricewaterhouseCoopers
Chartered Accountants
1 Embankment Place
London WC2N 6RH
Summary Group Profit and Loss Account
6 months 6 months Year ended
ended ended 31
30 June 30 June December
Notes 2000 1999 1999
£m £m £m
Turnover:
Continuing operations 4,707 3,822 7,134
Discontinued operations 4 - 65 83
2 4,707 3,887 7,217
Cost of sales 3,5 (3,574) (3,022) (5,570)
Gross profit 1,133 865 1,647
Operating costs 3,5 (751) (610) (1,308)
Operating profit 382 255 339
Share of profits less losses in
joint ventures and associates - 8 - (4)
continuing operations
Group operating profit / (loss):
Continuing operations 390 280 361
Discontinued operations 4 - (25) (26)
2 390 255 335
Exceptional provision for loss on
operations to be discontinued 4 - (42) -
Loss on closure of discontinued 4 - - (60)
operations
Net interest (payable) / (17) 7 (7)
receivable
Profit before taxation 6 373 220 268
Taxation 7 (37) (43) (86)
Profit after taxation 6 336 177 182
Dividends 8 (44) (40) (100)
Retained profit for the financial 292 137 82
period
Dividend per ordinary share 8 1.1p 1.0p 2.5p
Earnings per ordinary share:
Basic 9 8.5p 4.0p 4.3p
Diluted 9 8.3p 4.0p 4.3p
Adjusted Basic 9 9.2p 5.5p 7.9p
There were no recognised gains or losses other than those shown above.
Memorandum: £m £m £m
Group operating profit before
exceptionals and goodwill 2 418 279 424
amortisation
Profit before tax, exceptionals
and goodwill amortisation 6 401 286 417
Earnings before exceptionals and
goodwill amortisation 6 364 243 331
Summary Group Balance Sheet
As at As at As at
30 June 30 31 December
2000 June 1999
£m 1999 £m
£m
Fixed assets 2,799 1,844 2,905
Stock 79 87 84
Debtors due within one year 1,287 889 1,284
Debtors due after more than one 73 172 120
year
Cash and investments 378 743 304
Creditors due within one year (1,715) (1,092) (2,138)
Net current assets / 102 799 (346)
(liabilities)
Total assets less current 2,901 2,643 2,559
liabilities
Creditors due after more than (166) (250) (178)
one year
Provision for liabilities and (1,468) (1,371) (1,414)
charges
Total assets less liabilities 1,267 1,022 967
Capital and reserves 1,267 1,022 967
Movements in Shareholders' Funds
6 months 6 months Year ended
ended 30 June ended 30 31
2000 June December
£m 1999 1999
£m £m
Shareholders' funds as at 1 January 967 885 885
Profit on ordinary activities for 336 177 182
the period
Dividends (44) (40) (100)
Shares issued 41 - 1
Reserves transfer (33) - (1)
Shareholders' funds as at period 1,267 1,022 967
end
Summary Group Cash Flow Statement
6 months 6 months Year ended
ended ended 31
Note 30 June 30 June December
2000 1999 1999
£m £m £m
Operating profit 382 255 339
Add back:
Exceptional charges and goodwill 28 24 89
amortisation
Depreciation and amortisation 166 134 269
(Increase) / decrease in working (132) 466 726
capital
Other non cash flow items 40 22 30
Operating cash flow before
exceptionals:
Continuing operations 484 920 1,471
Discontinued operations - (19) (18)
484 901 1,453
Expenditure relating to exceptional (43) (46) (135)
charges
Net cash inflow from operating 441 855 1,318
activities
Dividends received from joint 2 - 11
ventures and associates
Returns on investments and (9) 15 19
servicing of finance
Taxation (27) (9) (163)
Capital expenditure and financial (55) (57) (143)
investment
Acquisitions - - (1,162)
Equity dividends paid 8 (60) (530) (570)
Cash inflow / (outflow) before 292 274 (690)
financing
Management of liquid resources (81) (375) 392
Financing (204) 75 248
Net increase / (decrease) in cash 7 (26) (50)
Opening (overdraft) / cash (31) 19 19
Closing overdraft (24) (7) (31)
Reconciliation of cash and
investments,
net of debt
£m £m £m
Debt, net of cash and investments (127) 223 223
as at 1 January
Money market investments acquired - - 340
Net increase / (decrease) in money 81 375 (392)
market investments
Net increase / (decrease) in cash 7 (26) (50)
for the period
New finance lease obligations - (113) (113)
Net decrease / (increase) in other 213 39 (135)
debt
Cash and investments, net of debt, 174 498 (127)
as at period end (i)
(i) Cash and investments, net of debt as at 30 June 2000 comprised cash
and money market investments of £378 million (30 June 1999; £743
million, 31 December 1999; £304 million), less bank overdrafts and loans
of £36 million (30 June 1999; £46 million, 31 December 1999; £247
million) and finance lease obligations of £168 million (30 June 1999;
£199 million, 31 December 1999; £184 million).
Notes
1 Basis of preparation
The unaudited financial information contained in this report
does not comprise statutory accounts within the meaning of
Section 240 of the Companies Act 1985. These results have been
prepared using accounting policies consistent with those used
in preparing the Group's 1999 Annual Report and Accounts.
The comparative information, for the six months ended 30 June
1999, has been restated to reflect the revised segmental
analysis presented in the Company's 1999 Annual Report and
Accounts. The segmental analysis presented in note 2 shows
'Group operating profit', which includes the Group's share of
joint venture and associate profits and losses. This revised
basis has been adopted since a significant proportion of our
Financial Services business's activity is conducted through
joint ventures, and the revised basis gives a better
understanding of the Group's operations.
2 Segmental analysis
for the 6 months ended 30 June
Group operating Group operating
profit / (loss) profit / (loss)
before after
exceptional exceptional
Turnover charges and charges and
goodwill goodwill
amortisation amortisation
2000 1999 2000 1999 2000 1999
£m £m £m £m £m £m
restated restated restated
Energy Supply 4,090 3,539 399 307 399 284
Home Services 303 282 9 8 9 7
Road Services 226 - 18 - (1) -
Financial Services 60 - 9 (7) - (7)
Other Activities 28 1 (17) (4) (17) (4)
Continuing 4,707 3,822 418 304 390 280
operations
Discontinued - 65 - (25) - (25)
operations
Total from 4,707 3,887 418 279 390 255
operations
2 Segmental analysis - continued
for the year ended 31 December 1999
Group Group operating
operating profit / (loss)
profit/(loss) after exceptional
Turnover before charges and
exceptional goodwill
charges and amortisation
goodwill
amortisation
1999 1999 1999
£m £m £m
Energy Supply 6,386 456 401
Home Services 592 20 16
Road Services 112 (3) (21)
Financial Services 26 (8) (17)
Other Activities 18 (16) (18)
Continuing 7,134 449 361
operations
Discontinued 83 (25) (26)
operations
Total from 7,217 424 335
operations
3 Costs
6 months 6 months Year ended
ended ended 31 December
30 June 30 June 1999
2000 1999
£m £m £m
Cost of sales:
Continuing operations 3,574 2,973 5,501
Discontinued operations - 49 69
3,574 3,022 5,570
Operating costs:
Continuing operations 751 569 1,268
Discontinued operations - 41 40
751 610 1,308
4,325 3,632 6,878
4 Discontinued operations
Discontinued operations comprised the Group's former retail
operations which were closed during 1999.
5 Exceptional charges and goodwill amortisation
6 months 6 months Year ended
ended ended 31 December
30 June 30 June 1999
2000 1999
£m £m £m
Included within cost of sales:
Gas contract renegotiations - - 30
- continuing operations
Included within operating
costs:
Year 2000 costs
-continuing operations - 6 9
-discontinued operations - - 1
- 6 10
Restructuring costs 3 18 36
-continuing operations
Goodwill amortisation 25 - 13
-continuing operations
Provision for loss on - 42 -
operations to be discontinued
Loss on closure of - - 60
discontinued operations
28 66 149
6 Earnings before exceptionals and goodwill amortisation
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2000 1999 1999
£m £m £m
Profit before taxation 373 220 268
Exceptional charges and
goodwill amortisation 28 24 89
Provision for loss on
operations to be discontinued - 42 -
Loss on closure of
discontinued operations - - 60
Profit before taxation,
exceptionals and goodwill 401 286 417
amortisation
Taxation (37) (43) (86)
Earnings before exceptionals
and goodwill amortisation 364 243 331
7 Taxation
The charge comprises mainly corporation tax on 'ring-fenced'
offshore gas production.
8 Dividends
An interim dividend of 1.1p per share (1999; 1.0p) will be
paid to shareholders on 27 November 2000. The final 1999
dividend of 1.5p per share was paid in June 2000, whilst a
special dividend of 12.0p per share was paid to
shareholders in June 1999.
9 Earnings per share
Basic and adjusted basic earnings per share (EPS) are
calculated as follows:
6 months 6 months Year ended
ended ended 31 December
30 June 30 June 1999
2000 1999
Earnings Earnings Earnings
EPS EPS EPS
£m pence £m pence £m pence
Profit after taxation / 336 8.5 177 4.0 182 4.3
Basic EPS
Add back exceptional charges 28 0.7 66 1.5 149 3.6
and goodwill amortisation
Earnings before exceptional 364 9.2 243 5.5 331 7.9
charges and goodwill
amortisation / Adjusted
Basic EPS
Average number of shares
(million) used in the
calculation of basic and 3,973 4,403 4,186
adjusted basic earnings
per share
Average number of shares
(million)used in the
calculation of 4,038 4,454 4,249
diluted earnings per share
Enquiries
For further information please contact:
Charles Naylor, Director of Corporate Affairs
Chris Milburn, Head of Investor Relations
Telephone:
01753 758 442/3/4/5 (Press)
01753 758 112/3/4 (Shareholders and Analysts)
Facsimile:
01753 758 440 (Press)
01753 758 472 (Shareholders and Analysts)
Internet:
www.centrica.co.uk
www.gas.co.uk
www.goldfish.com
www.theaa.com
Financial Calendar
Ex-dividend date for 2000 interim dividend 25 September 2000
Record date for 2000 interim dividend 29 September 2000
Payment of 2000 interim dividend 27 November 2000
2000 Preliminary results announcement 22 February 2001
2000 Annual Report and Accounts published End of March 2001
Annual General Meeting 14 May 2001
Registered Office
Charter Court
50 Windsor Road
Slough
Berkshire
SL1 2HA
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