Colder weather boosts Centrica in first quarter
UTILITIES group Centrica delivered a more positive update to the market yesterday, following a profit warning and dividend cut announced along with its 2014 results in February, and said trading continues in line with previous guidance.
The company said colder-than-usual weather in the UK and across North America in the year to date had led to higher than expected energy consumption in British Gas and Direct Energy, its US and Canada business.
Average residential gas consumption by British Gas customers was 10 per cent higher year-on-year during the first three months of 2015, while average electricity consumption was up by two per cent.
The group said its upstream gas and power business, Centrica Energy, continues to be “impacted by the low commodity price environment”. Centrica said it is still on track to meet a target of 25 per cent reduction in capital expenditure to around £800m in 2015, and a 40 per cent reduction to £650m next year.
Meanwhile, the company also said it is continuing to engage with the Competition and Markets Authority (CMA) on its investigation into pricing in the UK energy market, with provisional findings expected before the end of June.
Analysts at Whitman Howard said that “once the dust has settled” following the CMA review and upcoming General Election “the intrinsic value in Centrica should begin to feed through”.
Shares in the company closed up by 1.74 per cent yesterday.