Tomorrow's Business Today
British Gas to feel the heat over share buybacks
This is a bit in today’s trading update from Centrica.
“With over 10 million customers, we are acutely aware of the difficult environment facing many people and we remain committed to doing what we can to support those who need our help most. Today, Centrica is announcing an additional £25m of help for our customers, taking the amount we have invested in voluntary customer support this year to £50m.”
Those are perfectly fine words, I guess.
But even I don’t need a calculator to work out that £50 million divided among 10 million customers is, erm, a fiver each.
Which adjusted for inflation is basically nothing.
So I’m not sure the owner of British Gas wins bragging rights for compassion.
The bigger number in the statement, the one the press will notice, is the £250 million share buyback programme, which will be good for City shareholders and for the share options held by executives.
Centrica is in a very difficult position here, as it tries to balance the needs of shareholders and avoid the notion that it is a beastly energy giant which enjoys the idea of poor people freezing to death.
Since it is a public company rather than a government entity, it needs to be able to raise capital before it can do a thing to help anyone.
In order to raise capital it has to look like a going concern, which might include the ability to buy back its own shares when it can.
But its position isn’t uniquely difficult, plenty of others are in the same situation.
It is quite hard to see why now, heading into what will be a very difficult winter for many, was the right time for Centrica to spend £250 million on boosting its own shares.
Could this not have waited till Spring?
Press release of the day
The UK has imposed the most severe sanctions Russia has ever faced, says this from the Treasury.
More than £18 billion worth of assets have been frozen, that is £6 billion more than under all the other sanction regimes.
With other government departments under pressure to cut staff, the Office of Financial Sanctions Implementation is hiring.
Economic Secretary to the Treasury, Andrew Griffith said: “To make sure we are doing all we can to keep the pressure on Putin’s corrupt cronies we are more than doubling OFSI’s headcount. Our message is clear: we will not allow Putin to succeed in this brutal war.”
Stories that will keep rolling
1) Do the GDP figures suggest the UK can avoid a recession? If we do, what will be the main driver of that result?
2) What was Heathrow traffic like for October? Surely the 3rd runway is now dead?
3) How does US consumer confidence compare with ours?
4) Will there have to be a public bailout of crypto?
