Centrica share price slumps as group expects lower cash flow this year

Shares in Centrica (LON:CNA) have fallen deep into the red in London this morning as the British Gas owner cautioned that the energy regulator’s price cap will impact its cash flow and earnings this year. The comments came as the company updated investors on its full-year performance and separately announced that it was selling its North American business Clockwork.

As of 09:53 GMT, Centrica’s share price had given up 10.09 percent to 123.35p. The shares are weighing on the blue-chip FTSE 100 index which is currently 0.61 percent worse off at 7,184.40 points.

Centrica posts FY results

Centrica announced in a statement this morning that its adjusted operating profit had climbed 12 percent last year to £1.39 billion. The group’s earnings per share, however, fell 10 percent to 11.2p.

“Centrica’s financial performance in 2018 was mixed against a challenging external backdrop,” the group’s chief executive Iain Conn commented in the statement, cautioning that the company’s financial performance in the new year will be impacted by the UK default tariff cap and continuing lower volumes in the group’s E&P and Nuclear units.

The British Gas owner said that the midpoint of its adjusted operating cash flow guidance in 2019 stands around £350 million lower than the 2018 result, with around £100 million of this reduction also expected to impact the group’s adjusted earnings.

Group sells Clockwork

Centrica announced in a separate statement that it is to sell its Clockwork, Inc business in North America to Authority Brands for $300 million (£230 million). 

“The disposal of the Clockwork portfolio is aligned with our intention to drive channel and brand simplification across the Group focusing on our owned channels,” Iain Conn pointed out. The British Gas owner noted that it targets  £500 million of non-core divestments in 2019.

As of 10:09 GMT, Thursday, 21 February, Centrica PLC share price is 122.88p.