April 21, 2016 / 9:00 AM / 4 years ago

UPDATE 1-Centrica expands in European energy trading with Neas acquisition

(Adds analyst comment, detail, background, shares)

LONDON, April 21 (Reuters) - Britain’s Centrica announced the 170 million-pound ($243 million) acquisition of Danish energy management company Neas Energy on Thursday, a move that builds on its recent strategy shift to grow in European energy trading.

The 18-year old Danish company with around 250 employees manages and trades energy on behalf of clients who own power stations, including renewable energy plants, in more than 20 European countries.

This ties in with Centrica’s own trading capabilities and is an area in which the company said last year it sees good prospects.

“This acquisition will allow us to accelerate our energy marketing and trading growth strategy and serve renewable and distributed energy customers at a wholesale level across Europe,” said Centrica Chief Executive Iain Conn in a statement.

Analysts said the acquisition made strategic sense for Centrica but some said they were surprised about this cash-heavy transaction at a time when the utility should be saving money.

“Investors may be a little surprised that Centrica’s management are making a near 200 million-pound acquisition in current market conditions, particularly given their overriding need to convince investors of their capital discipline,” said analysts at Jefferies, who have a “buy” rating on the stock.

Shares in Centrica were trading down 0.5 percent at 235 pence a share at 0845 GMT.

Centrica’s energy trading expansion comes as it has been hit hard by weak energy prices and fiercer competition in its home market. It said last year it would cut 6,000 jobs as part of a cost-saving drive.

$1 = 0.6989 pounds Reporting by Karolin Schaps and Sarah Young, Editing by James Davey and Mark Potter

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