The figuresRevenue grew six per cent year on year to £29.7bn at Centrica and adjusted operating profit was up 12 per cent to around £1.4bn compared to 2018. Read more: Price cap: Four of the Big Six energy suppliers hike prices
Why it is interestingCentrica said it expects to take a hit to its adjusted operating cash flow from Ofgem's energy price cap that limits the amount customers on default tariffs pay for their energy. That sent shares down to 122.7p, their lowest point since hitting 119.8p in March 1999. Alongside other changes, including production at the lower end of the guidance for its oil and gas company Spirit Energy, Centrica has set a 2019 target of £1.8bn to £2bn, which is £300m below its average target for 2018 to 2020. The group also announced today that it will sell North American home services company Clockwork for £230m, part of a £500m divestment of its non-core positions. More than 740,000 UK customers, including 97,000 on prepayment meters, switched away from the company last year as competition increased in the market. The hit was made worse as British Gas tried to move customers off its default tariff ahead of the price cap which was introduced in January.
Shares were trading down nearly 11 per cent at around 9am this morning. Brewin Dolphin senior investment manager John Moore said that analysts will be disappointed by the performance at Spirit Energy and its business in North America. “Closer to home, British Gas lost more than 740,000 customers in 2018, adding to large customer defections in the previous year. However, with many of the challenger brands hitting the rocks over the past year, it is beginning to feel like a ‘survivors’ market’ which may benefit Centrica in the long term,” he added.