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Centrica share price deep in the red even as group reiterates FY targets

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Shares in Centrica (LON:CNA) have fallen deep into the red in London in today’s session, even as the British Gas owner reiterated its targets for the full year. The company, however, expects a £70-million impact next year following industry regulator Ofgem’s energy price caps.

As of 08:55 GMT, Centrica’s share price had given up 8.57 percent to 133.40p. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.84 percent lower at 6,990.70 points.

Centrica reiterates targets

Centrica announced in a statement this morning that it continues to expect to achieve its targets for the current year, despite unexpected outages and operational issues in its E&P business, as well as extended inspections and outages in its Nuclear division. The British Gas owner expects to deliver adjusted  operating cash flow of between £2.1 billion and £2.3 billion, while net debt is forecast to come in between £2.5 billion and £3 billion.

The group also expects to maintain the full year dividend per share at 12.0p, while adjusted operating profit and EBITDA are flagged above last year’s levels.

“Maintaining a focus on performance delivery and financial discipline and demonstrating resilient cash flows remain our objectives for 2019 and beyond, as we deal with the impact of the UK energy supply default tariff cap,” Centrica’s chief executive Iain Conn commented in the statement.

Price caps impact

The British Gas owner, however, cautioned that Ofgem’s price cap is likely to result in some negative near-term impact on earnings and cash flow, particularly next year. Centrica further noted that the regulator’s  revision to the methodology for calculating supplier wholesale and hedging costs is  expected to lead to a one-off negative adjusted operating profit impact of about £70 million in the first quarter of next year.

As of 09:01 GMT, Thursday, 22 November, Centrica PLC share price is 135.60p.

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