Bord Gáis investment pays off for parent group Centrica
The new owners of Bord Gáis Energy are sitting on profits of €92.9m just two years after buying the business in a privatisation demanded by the Troika.
Profits at Bord Gáis Energy rose 53pc to €54.4m last year, according to annual accounts filed by the company's UK parent, Centrica.
Centrica bought Bord Gáis Energy in a deal agreed at the start of 2014 for a net consideration of just €150m, including the Whitegate gas-fired power station in Cork and the retail business with 650,000 customers. The power station had cost €400m to build back in 2010. The results show that Centrica has now recouped almost two-thirds of its investment in just two years.
The sale prompted anger in some quarters, with opposition parties and trade unions accusing the Government of selling the company "on the cheap".
Since the sale, Bord Gáis Energy has outstripped expectations, with the company posting an unexpected profit of €38.5m for 2015.
Bord Gáis declined to comment on the results.
Centrica said that the number of Bord Gáis customer accounts rose by 4pc over the course of last year to 690,000. It also said that the number of customer complaints during the year had decreased by 35pc.
The company said the improving results were based on its competitive pricing arrangements. Bord Gáis Energy had seen a reduction in both gas and electricity customers at the end of 2015. The improvement means that Bord Gáis Energy is now the second-largest provider of electricity in the country.
Centrica,which is led by ceo Iain Conn, were part of a consortium of investors that bought State-owned Bord Gáis in 2014.
Overall, Centrica posted a decline of 3pc last year, with revenues falling to £27.1bn. However, the company announced an adjusted operating profit of £1.45bn, which was up 4pc on the figure for 2015.
Centrica said it had boosted its operating cash flow by 14pc and said that an additional £2bn raised this year would go to servicing the company's net debt of £3.5bn. The company's debt fell by 27pc over the course of 2016.
Capital expenditure is to be limited to £1bn in 2017, the company said.
Centrica said the layoff of 3,400 employees across the business last year produced savings of £384m during 2016.
It said it anticipated saving an additional £250m in an "efficiency programme" to be rolled out this year.
"We delivered our key objectives including improved customer service and more innovative offerings and solutions," said Centrica ceo Iain Conn.
"Last year was a busy year for the team, but we have delivered a lot, and Centrica enters 2017 a stronger company with encouraging underlying momentum and positioned to deliver longer-term returns and growth," Mr Conn added.
Centrica, which also owns British Gas, said that it intended to focus on consumer facing operations in the year ahead. The company said enhancing consumer choice and ensuring customer loyalty would be priorities for 2017.
It was also announced that the company would divest its interest in a renewable site in Trinidad and Tobago.
Centrica also declared its intention to find a buyer for a Canadian exploration facility later this year
Shares in the company were down 3.7pc at the close of trading on Thursday.
The results show that Centrica has now recouped almost two-thirds of its investment in just two years.