Centrica issues profit warning even as bills rise

Suzie Neuwirth
BRITISH Gas owner Centrica yesterday warned that profits would be lower than expected this year, despite recently unveiling a 9.2 per cent increase to customers’ energy bills.

“Market conditions remain challenging, particularly in business energy supply in both the UK and the US, in UK gas-fired power generation and in UK gas storage,” said the firm.

FTSE 100-listed Centrica expects full-year adjusted earnings per share to be similar to 2012. But it forecasts its British Gas household supply business to make a post-tax profit margin of almost five per cent, buoyed by the recent price hike and higher consumption. Five of the big six suppliers have recently said they will be raising bills, causing a political furore over energy prices and the cost of living.

Centrica also warned that it continues to experience “margin pressure” in its North American supply business, despite making a US acquisition in October. Shares dropped almost four per cent in early trading, closing 5.1 per cent lower at 345.30p.

“While the UK retail pressures are understandable, the more concerning incremental news is on North America,” said Martin Brough, analyst at Deutsche Bank. “This will disappoint given the increased capital the firm has decided to put into this business.”

German energy firm RWE, which owns rival supplier Npower, yesterday outlined its plans to cut 6,750 jobs across Europe.