Centrica’s solid H1 numbers and 12.5% electricity tariff increase announced yesterday morning were both in line with market expectations. Operationally, the business was resilient given this year’s warm weather and challenging competitive dynamics. The political impact of the tariff hike was mitigated by protecting 200,000 vulnerable customers, a move we view as sensible given especially high levels of political risk in UK retail energy currently. The bigger story for Centrica shareholders remains the long-term shift away from upstream ‘asset businesses’ to tech-enabled customer businesses. Yesterday’s announcements do not change that strategy and the reality is that Centrica is very early in its strategic change of direction.

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