Centrica launches 500m-pound share repurchase programme

FTSE 100 listed integrated energy company Centrica has announced the launch of a 500m-pound share repurchase programme following its decision not to participate in a UK nuclear new build.

In 2009, Centrica acquired a 20% interest in EDF Energy's eight operational nuclear power stations in the UK and also took an option for a 20% interest in the construction of new nuclear power stations at Hinkley Point and Sizewell.

The acquisition was funded through a £2.2bn rights issue, completed in 2008, part of which provided financing for the investment in new nuclear.

Having taken the decision not to proceed with the new nuclear investment, the group will launch a £500m share repurchase programme, to return surplus capital to shareholders, which will be conducted over the next 12 months, the update stated.

Sam Laidlaw, Chief Executive Officer of Centrica, said: "We believe that nuclear generation has a valuable role to play in a balanced UK energy mix. Centrica and EDF continue to enjoy a successful partnership in existing nuclear. However, since our initial investment, the anticipated project costs in new nuclear have increased and the construction timetable has extended by a number of years.

"These factors, in particular the lengthening time frame for a return on the capital invested in a project of this scale, have led us to conclude that participation is not right for Centrica and our shareholders. In 2012 we invested over £2 billion in securing supplies of energy for the UK and where we see attractive returns we will continue to invest in Britain's energy future."

MF