Centrica profits dive as political pressure mounts
Energy giant Centrica has reported a fall in profits before tax to £1.6bn for the year to 31 December 2013. The fall is heavy blow to the energy company which recorded profit before tax in 2012 of over £2.4bn.
Centrica also announced a six per cent dip in profit for its British Gas residential arm from £606m in 2012 to £571m in 2013.
Sam Laidlaw, Centrica chief executive, commented:
Recently we have seen unprecedented focus on the energy sector in the UK, with intense political and media scrutiny at a time when many customers have faced declining real disposable income. In British Gas, we have simplified our energy product range to just four residential tariffs, we have made further improvements to the transparency of our reporting, and we were the first energy company to reduce retail tariffs following proposed changes to the ECO programme.
Centrica suffered disappointment earlier in the week when UBS downgraded its rating on the stock from sell to neutral, causing shares to tumble over three per cent.
UBS also lowered its price target for the energy Centrica, which owns big six supplier British Gas, from 340p to 280p.
Analysts attributed the downgrade to heightening political risk in the wake of energy secretary Ed Davey's letter to regulators asking them to scrutinise British Gas’ high gas supply margin.