2 UK stocks with record-breaking profits I’d snap up in May

These two UK stocks achieved outstanding financial results in 2022. Our writer highlights several reasons why they’d happily buy shares in both companies.

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Many UK stocks suffered in 2022 amid the tumultuous geopolitical and macroeconomic conditions.

However, not all British companies fared poorly. In fact, some Footsie firms managed to post record-breaking profits.

Today, I’m taking a look at two companies that managed to do just that.

If I had some spare cash lying around, I’d happily snap up shares in both of them as we May starts. Here’s why.

A global company with trusted brands

Centrica (LSE:CNA) is a British multinational energy services and solutions company with over 20,000 employees worldwide. The group is the parent company of brands including British Gas and Bord Gáis.

An outstanding financial performance last year was helped by high energy prices.

Centrica’s operating profits of £3.3bn were up from £948m in 2021. This figure comfortably surpassed the group’s previous highest-ever yearly profit of £2.7bn from 2012.

Nevertheless, I’m keeping my eye on several challenges facing the company moving forward.

For example, volatile commodity prices and an unstable economic backdrop represent risk factors outside Centrica’s control that could easily impact performance.

That being said, with cash piles expected to increase, I think the group now has a sizeable cushion to help navigate future bumps in the road.

Looking ahead, I anticipate Centrica’s energy marketing and trading (EM&T) division to continue being a core driver of performance.

The EM&T segment is the group’s trading arm, which I think looks set to benefit from energy price volatility in the long run.

Integrated energy business with customers globally

Oil and gas supermajor and FTSE 100 titan BP (LSE:BP.) is one of the world’s largest companies measured by revenues and profits.

Earlier in the year, BP reported an outstanding performance for 2022. The group posted record annual profits of $27.7bn, which was more than double last year’s figure.

As is the case with Centrica, commodity price volatility represents a key risk for the group going forward. After all, its fortunes are directly connected to the price of oil.

Key to mitigating this risk in the long run is BP’s plan to increase exposure to renewable and lower-carbon energy sources.

I always suspected that implementing its plans in this area would prove more difficult than first anticipated. After all, the group’s carbon emission reduction targets were rather ambitious at first.

To illustrate, the target from 2019 to 2030 for BP’s oil and gas production has now been reduced to 20-30%, which is a tad disappointing. For context, the prior target was 35-40%

That said, if anyone can spearhead the green energy transition, I’m still confident it will be the energy giants like BP that can leverage their huge cash flows to fuel strategic investment in renewables.

As such, if I had the cash to spare, I’d happily snap up some BP shares for my portfolio in May with the aim of holding for the long term.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Matthew Dumigan has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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