Centrica Plans US Purchases to Grow North American Profit - Businessweek

Centrica Plc (CNA), the biggest power and gas supplier to U.K. homes, plans acquisitions in the U.S. as the utility tries to double profits from North America.

More than half of the U.S. expansion will come through small and larger purchases, Chief Executive Officer Sam Laidlaw said today on a conference call presenting the Windsor, England- based company's strategy.

"As some U.S. states deregulate and open markets, we've the scope to make acquisitions of customer blocks," Chief Financial Officer Nick Luff said on a conference call with journalists. "From a downstream energy supplier's perspective, it's a growing market."

Centrica is looking for growth in North America as a stagnant U.K. economy holds back demand. It has 5.5 million customers in the U.S. and Canada concentrated in New England and Texas, where energy markets are deregulated.

Centrica reported a 5.5 percent rise in 2012 adjusted earnings to 1.4 billion pounds ($2.1 billion) as U.K. gas demand increased because of cooler weather. The company expects U.K. gas imports to rise while supplies from the North Sea dwindle on aging fields.

The shares declined 0.4 percent to 347.80 pence at the close in London trading, valuing the company at about 18 billion pounds.

Centrica's North American division made 331 million pounds last year from 312 million in 2011, according to an earnings statement. It added more than 200,000 residential customer accounts, it said. Profit at its British Gas unit increased 9 percent last year to 1.09 billion pounds.

The company has appointed Chris Weston as head of the international downstream business to oversee supply business in the U.K. and U.S. Badar Khan will replace Weston as head of the North American division from April 1. Phil Bentley, head of British Gas, will leave the company by the end of the year.

Build Reactors

Centrica earlier this month opted out of a plan to build nuclear reactors at two power plants in the U.K. with Electricite de France SA, writing off 200 million pounds it spent on advanced costs. It also completed a 500 million-pound share buyback program.

Global oil and gas production is expected to rise to 75 million barrels of oil equivalent a year in 2013, Centrica said in a presentation on its website. That compares with 44 million barrels in 2009.

The U.K. is becoming increasingly reliant on imports and liquefied natural gas will intensify the link between the U.K. and global gas markets, Centrica said in the presentation.

"As the U.K. imports more gas, maximizing production of gas in the U.K. is important," Luff said. "We're interested in all sources of gas supply."

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net