Mild winter and lower use hit Centrica outlook
BRITISH Gas owner Centrica yesterday reduced its earnings forecast, as milder winter weather cut into its revenues.
The firm said the average residential gas consumption for the first 10 months of the year was 21 per cent lower than in 2013, while the average electricity consumption was down seven per cent.
It added that the average fuel bill is expected to be £100 lower as a result.
Centrica also warned that falling oil and gas prices could “significantly” impact its business.
The company said the number of British Gas residential customer accounts fell by 50,000 in the months since June, but has recently begun to grow.
Despite cutting its earnings-per-share forecasts by 2p, Centrica said it expected to see a “return to more normal weather conditions”, which would boost its year-end profits.
“We will likely spend less on finding gas as commodity prices come down,” said interim chief financial officer Jeff Bell on a conference call to journalists.
The company’s 2015 upstream capital expenditure is expected to fall to £900m from £1bn this year.
Despite its earnings downgrade for this year, Centrica was more upbeat about the coming year, saying a return to normal weather conditions in Britain and North America would lead to earnings growth in 2015.
The utility also said it had started signing up new customers in Britain in recent weeks through a new tariff it launched in partnership with supermarket chain Sainsbury’s .
Shares in Centrica fell 1.57 per cent to close at 293.90p.