Shares in Centrica were up on the FTSE 100 in morning trading after the energy company and owner of British Gas reported a rise in operating profit in the full year ended 31 December 2010.
Revenue was reported as rising from £22 billion in the previous year to £22.4 billion. Operating profit increased from £1.9 billion to £2.4 billion while adjusted earnings rose slightly from £1.1 billion to £1.3 billion.
The group said it was raising its full year dividend from 12.8 pence per share to 14.3 pence per share.
Centrica said that during the year British Gas had seen a rise in residential energy customer accounts of 267,000 thanks to what it called its "competitive pricing position". However the group also said that profits in its second half were lower than the first due to rising wholesale energy prices.
Centrica said it hoped to create 2,600 skilled jobs in 2011.
Sam Laidlaw, Chief Executive of Centrica, said, "In 2010 we delivered a strong operational and financial result, reflecting the contribution from the enlarged upstream business in the UK, together with good downstream performance in both the UK and North America. Our investment programme for 2011 and beyond will enable continued growth for the benefit of all our stakeholders, offering a competitive deal for customers, creating further job opportunities, and delivering superior financial returns for our shareholders."
Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers, commented,
"The benefits of the group's diverse and expanded business portfolio are clearly evident today. Higher gas prices in the second half have aided its significantly expanded production division, counterbalancing cost induced profit pressure for its doorstep supply business.
"Furthermore, production profits are likely to have aided the price competitiveness of the group's supply offering, a fact differentiating it from many rivals and supporting the 267,000 residential account wins over the full year. Finally, increased production profits will be assisting the government's and thereby Centrica's drive to enhance energy efficiency, reducing the impact of lower usage now and going forward.
"In all, Centrica remains a company with strong management and direction. The uncertainty which volatile commodity/energy prices bring has been partially mitigated, with diversity in both asset type and even geographical location bringing further comfort for investors. With Centrica now offering a more robust business model and the dividend policy remaining progressive, market consensus opinion currently denotes a strong hold."
By 10:50 shares in Centrica were up 0.15 per cent on the FTSE 100 to 335.60 pence per share.