Centrica slides after surprise profit warning

Suzie Neuwirth
CENTRICA’S share price dropped yesterday, after the energy giant issued its second profit morning in six months.

The FTSE 100 firm, which owns big six supplier British Gas, said lower energy consumption due to mild winter weather in the UK and losses from its UK gas-fired power stations had caused the company to lower its outlook for full-year earnings per share by around 10 per cent to 22p to 23p – which would be its lowest profit since 2009. But it expects an improvement in 2015 and reaffirmed its commitment to “real dividend growth”.

Centrica also said it does not expect to raise consumers’ energy bills this year, “reflecting the competitive market and wholesale price environment”, although it did not go quite as far as peer SSE and confirm a price freeze. But analysts have warned that consumers may be short-changed by such a move, as by forward-hedging power contracts energy firms will not be able to lower bills if wholesale energy prices continue to fall.

The company said it is putting three of its UK gas-fired power stations up for sale, which are collectively worth around £500m, “to address the continuing operating losses”.

Centrica and the rest of the big six are facing a possible probe by the Competition and Markets Authority after regulator Ofgem referred competition in the energy market for a full-scale investigation.

Shares closed down 1.96 per cent.