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British utility Centrica confirms full-year targets, lifts efficiency goals

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By Reuters

By Susanna Twidale

LONDON (Reuters) – British utility Centrica <CNA.L> is on track to meet its full-year cash flow and earnings targets and on Thursday raised its expected efficiency savings by 50 million pounds ($65 million).

Adjusted operating cash flow is expected to be in the lower half of its targeted 1.8-2.0 billion pound range, it said.

Centrica said its hedging strategy had insulated it from lower European wholesale gas prices, while a strong performance from its North American business helped to offset lower output from Britain’s nuclear fleet, in which it owns a 20% stake.

The company has been shifting towards consumer energy services and away from oil and gas exploration and large-scale power generation, as part of a move away from fossil fuels.

It has also launched the sale of exploration business Spirit Energy, a document seen by Reuters shows.

Efficiency savings for the year at Centrica are now expected at 300 million pounds compared with 250 million pounds indicated in its interim results in July.

The company previously said it expected to cut between 1,500 and 2,000 jobs on a like-for-like basis in 2019, as a part of the 4,000 cuts to 2020 announced last year.

Centrica chief executive Iain Conn said when presenting interim results in July that more jobs cuts could be announced with the company’s full-year results in February.

Conn, who has been under pressure from shareholders because of Centrica’s poor performance, also said earlier this year he would step down in 2020.

Shares in the company up around 4% in early trade.

“We see today’s reassuring update as a first step forward, after several profit warnings since 2017,” analysts at Jefferies said in a research note.

(Reporting by Susanna Twidale; editing by Jason Neely and Alexander Smith)