Picture ... thousand words ... etc
I've always had a soft spot for Centrica, ever since they got off on exactly the right foot back in the 1990s when British Gas was triumphantly de-merged. Maybe it's to do with the mighty relief of the break-up of that ghastly, brutal monopoly. Newly-liberated Centrica did an awful lot right; and as the years progressed, they were clear-sighted, objective and flexible enough to recalibrate their strategies in the face of changing market circumstances (including cutting their losses decisively when called for). Not least, they've staved off being gobbled up.
You'll find we've written about them, on and off, for years - and not always in complimentary tones because they haven't been beyond reproach at all. Worst of all has been their nuclear gamble, when they got hopelessly carried away by their stonking coup of buying a heap of electricity from the old British Energy at the absolute bottom of the market, when Gordon Brown (remember him ...) was engineering a bail-out. That was very good business (one of several such opportunistic bottom-of-the-market coups - almost as good as John Browne / BP in 1998), but it wasn't to last. Participating as a more-or-less passive partner (OK, patsy) in EDF's outright purchase of BE in 2009 was crass, and they've regretted it from the day they agreed it, probably even before the ink was dry. And they've never found a way of severing the ties, despite committing to do so by the end of this year.
Still, it's sad to see them the way they are now, cancellation of dividend and all - even if they are by no means alone among broadly competent energy companies out of favour right now. Earlier in the year we said there needed to be some meaningful asset sales and that remains the case, IMHO. But it seems we have to wait for developments on the nuclear front ...
Centrica still plans to exit both E&P and Nuclear, but divestment programmes have been paused until the financial and commodity markets have settled.
Yeah, right - doesn't sound much like any time soon. Which must mean selling something more conventional than a part-share in EDF's mouldering, cracking-up UK nukes (with the associated energy-sapping politics that EDF wages all the time against HMG).
Still, they remain a competent lot. How much of that former clear-sightedness and objectivity do they retain? The sale of Direct Energy (their big North American supply company) is a start, and must be a wrench: they bought it in 2000 as part of their Enron wannabe strategy, and grew it to #2 position in North America. So maybe they really are up for it.