Centrica share price: British Gas owner updates investors on recent performance

on Nov 20, 2014
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iNVEZZ.com, Thursday, November 20: Centrica Plc (LON:CNA) has this morning issued an interim management statement.

*h*Highlights from Centrica’s statement*h*
Centrica today gives an update on its business performance. The Group has faced a number of challenges in the year to date, in particular mild weather in the UK and the Polar Vortex in North America, trading conditions for British Gas Services, and the impact of boiler inspections at the Heysham 1 and Hartlepool nuclear power stations. Reflecting this, full year adjusted earnings per share in 2014 are expected to be in the range 19-20p. Although the upstream business will be impacted by falling oil and gas prices, the Group still expects to deliver earnings growth in 2015. Good operational progress has also been made across a number of areas which will drive Centrica’s long-term growth.
**Earnings outlook**
Full year adjusted earnings per share in 2014 are now expected to be in the range 19-20p, compared to a range of 21-22p at the time of our Interim results. This change reflects mild UK weather in the second half of the year to date, trading conditions for British Gas Services, and the impact of boiler spine inspections at the Heysham 1 and Hartlepool nuclear power stations. British Gas Residential post-tax margins are expected to be around 4% this year, lower than long-term expectations.
Looking ahead to 2015, we expect to deliver growth in Group adjusted earnings. In addition to an expectation of a return to more normal weather conditions, we expect increased underlying profit in Direct Energy, British Gas Services and British Gas Business. We will also see a first full year of contribution from Bord Gáis in Ireland. However, these improvements may be significantly offset by the impact of lower oil and gas prices on our upstream business, and a higher effective upstream tax rate as small field tax allowances in 2014 are not repeated. Both 2014 and 2015 earnings expectations remain subject to the usual variables of commodity prices, weather and asset performance, together with the downstream regulatory and competitive environment.
*h*More to follow…*h*

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