Broker snap: UK and US to fuel Centrica growth

15th Mar 2010 10:24

Expectations of strong growth in the UK and the US have prompted Nomura to raise its rating on British Gas owner Centrica to 370p from 340p.The broker notes that Centrica is already the largest energy provider in the UK with 16m accounts and is adding customers due to its competitive prices and an improvement in customer service.'Centrica can use this scale in energy coupled with its 9,000 plus engineers (10 times more than nearest peers) to cross sell energy and home services products and to roll out new product offerings as the UK moves towards greater energy efficiency and implements the low carbon agenda,' the broker says.Nomura also notes that earnings before interest and tax in the US are expected to double in three to five years.'Centrica hopes to mimic the successful turnaround of the UK business in the US,' the broker notes. 'We are not convinced that a doubling of EBIT is possible but our forecasts here have increased.'Nomura has a 'buy' recommendation on Centrica.