British Gas owner's shares singed by spring sunshine demand slump
Centrica shares fell on Thursday after the British Gas owner flagged tough market conditions following warmer than usual spring weather.
The business told shareholders the residential energy arm of British Gas 'has been impacted by warmer than normal weather in Q2'.
Centrica said the unit is still expected to be within its £150million to £250million sustainable profit margin, but flagged issues elsewhere.
Centrica Energy, an energy trading unit, is currently expected to be towards the bottom of medium-term profit guidance range for the year, 'due to more challenging market conditions in the gas & power trading segment'.
In addition, Centrica Energy Storage+ is now expected to post an adjusted operating loss at the higher end of the indicated range of £50million to £100million.
Centrica reaffirmed 2025 full year adjusted operating profit guidance ranges and revealed its intention to increase the full year 2025 dividend per share to 5.5p.
However, Centrica shares fell 7.23 per cent or 11.50p to 147.60p on Thursday, having risen 10 per cent in the last year.
In an update ahead of its annual general meeting today, Centrica also said it remained in talks with ministers about securing financial support to expand and revamp its Rough gas storage site.
The facility in the North Sea is the largest of its kind in Britain, but Centrica had stopped filling it with natural gas last month amid concerns over its financial viability.
The company usually starts injecting fuel into the Rough site by spring, but it had not done so by mid-April, according to reports.
Centrica said on Thursday that it was running at a loss of between £50million and £100million, but that it was pressing ministers for more financial support.
The group said: 'Constructive discussions are ongoing with the UK Government to secure a regulatory support mechanism that unlocks £2billion of investment to increase Rough's capacity and ultimately convert it into a hydrogen-ready storage facility.'
While Britain does not rely heavily on gas storage compared to other countries, the Rough site comprises around half of its storage capacity and acts as a buffer when the weather is particularly cold and demand for gas increases.
The company added that its energy trading arm, Centrica Energy, had taken a hit in the first part of this year as a result of 'more challenging market conditions in the gas and power trading segment'.
It said it was 'closely monitoring the impact of potential global trade restrictions and will continue to do so.
'Given our diversified supply chains across key projects and operations, we do not currently anticipate any material impact on our business or financial results.'
Russ Mould, investment director at AJ Bell, said: 'In recent years Centrica's gas and power arm has helped transform its prospects – delivering lots of cash which helped the company repair its balance sheet and return capital to shareholders.
'However, the boost to energy prices provided by the Russian invasion of Ukraine has now ebbed away and more recently, a warmer than usual spring has hit demand in its retail British Gas business.'
He added: 'While Centrica is sticking with full-year guidance and current dividend plans, the company does note challenging conditions. It would not be a major surprise if it was forced to cut guidance, particularly given the expected second-half weighting for the current financial year.'
On the group's energy storage operations, Mould said: 'Centrica expects heavy losses from its energy storage operations centred around the Rough gas field in the North Sea. It is looking for government support to increase capacity and convert it into a hydrogen-ready facility.
'While the Exchequer hardly has lots of money to throw around, the strategic importance of Rough as a buffer to help cover periods of high energy demand means Centrica may get a sympathetic hearing.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
BBC News
39 minutes ago
- BBC News
Shops in Yorkshire found to be flouting single-use vape ban
Nearly two weeks on from a ban on the sale of single-use disposable vapes in the UK, many shops have been found still to be openly selling the illicit items. Almost half of the 21 stores which an undercover BBC reporter visited in cities in Yorkshire continued to sell the vapes as though there had been no law vapes, in their bright-coloured packaging and variety of fruity flavours, had been a "key driver behind the alarming rise in youth vaping", the previous government had said as it first set its sights on a Labour administration followed through, with the disposables officially banned from sale from 1 June this year - the aim being to protect children's health and reduce damage to the the introduction of the ban, anybody selling the illicit items risks a £200 fine, with repeat offenders facing the prospect of our undercover investigation has revealed that while some shop owners in Sheffield, Bradford, York and Leeds have been found to be following the new rules, others are turning a blind eye. In some shops we visited in Yorkshire, the colourful packaging of single-use vapes was still very much visible on the in those premises seemed happy to offer them to customers, and many were even selling them at a reduced shopkeeper I spoke to told me he knew he was breaking the law by selling the single-use disposable vapes, but he added that he wanted to sell his remaining stock at a discount."It's banned," he said, pointing at the stack of vapes in his shop window."I'm not allowed to sell them. I'm finishing. I don't have a lot, so I'm just trying to [get rid of them]."This was despite the ban on such vapes having been announced in October last gave stores more than seven months to get rid of the disposable vapes they still had in stockrooms and on the shelves before the ban came into force in June. The Department for Environment, Food and Rural Affairs (Defra) said before the ban that vape usage in England had grown by more than 400% between 2012 and 2023, with about 9% of people now buying and using the disposable vapes helped get children hooked on nicotine and blighted high streets with waste, according to the government."It's why we've taken tough action and banned them," a Defra spokesperson that ban, another shopkeeper asked me if I wanted a "good deal" and offered to sell me an armful of the illicit vapes for £20, showing me a pick-and-mix of fruity flavours in the store's glass as part of our investigation in cities across Yorkshire to find out where such vapes were still being sold, we also visited traders regulated by North Yorkshire Council's Trading Standards shop workers approached by our undercover reporter there refused to sell the now-illegal Greg White, North Yorkshire Council's executive member for environment, said it was "disappointing" to see shops in other parts of Yorkshire were still prepared to break the law."There's been plenty of time to prepare and to try to get people to move from disposable vapes to reusable ones, and that would have been good for their business," he explained.A Defra spokesperson said: "Rogue traders will face serious penalties, up to and including criminal prosecution." Listen to highlights from South Yorkshire on BBC Sounds, catch up with the latest episode of Look North.
BBC News
39 minutes ago
- BBC News
Uttoxeter Maltings regeneration scheme behind schedule, council says
A major regeneration project in Staffordshire is behind schedule, according to performance targets set by the local authority.A planning application for the redevelopment of The Maltings site in Uttoxeter was due to be submitted in delay was caused by a decision to file separate applications for demolition of the shopping precinct and the regeneration work, bosses council said an application for the demolition was now due to be submitted this month. East Staffordshire Borough Council bought the shopping centre in January, following its purchase of the former Co-op building in 2023 alongside the land that it already council has previously committed to further improvements in the area, including refurbishing toilets on Bradley Street, upgrading connectivity from a bus station and car park to the high street, as well as installing improved lighting and seating, plus a full pedestrianisation of the high addition, 12 new electric vehicle charging stations have been installed in the car park.A consultation on the proposed regeneration work began in May last year and has since ended. This news was gathered by the Local Democracy Reporting Service, which covers councils and other public service organisations. Follow BBC Stoke & Staffordshire on BBC Sounds, Facebook, X and Instagram.
The Guardian
an hour ago
- The Guardian
UK GDP report to show if economy kept growing in April
Update: Date: 2025-06-12T05:35:44.000Z Title: Introduction: UK GDP report coming up Content: Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy. We're about to learn how the UK economy fared during 'Awful April'. The latest GDP report, due at 7am BST, will show whether or not the UK managed to keep growing during a month dominated by Donald Trump's trade war, which also brought a jump in bills for consumers, and the rise in employer national insurance contributions. Economists predict a slowdown – indeed, the consensus forecast among City number crunchers is that GDP fell by 0.1% in April. That would be a disappointment, after the UK economy made a decent start to 2025, growing by 0.7% in the first quarter of the year. Deutsche Bank predict the economy stagnated in April, with their chief UK economy Sanjay Raja explaining: By all accounts there are likely to be some volatile swings – particularly when it comes to manufacturing. Some negative pay-back in the services sector too, we think, is very possible. The good news? Better weather will have likely helped output in general, especially within consumer-facing services. So far this year, the UK economy was flat in January, then grew by 0.5% in February, and by 0.2% in March. Investors will also be digesting yesterday's UK spending review, in which chancellor Rachel Reeves outlined billions of pounds of infrastructure spending. Health and defence were the priority, but other areas will face a tough squeeze on funding. 7am BST: UK GDP report for April 7am BST: UK trade balance for April 1.30pm BST: US weekly jobless claims report 1.30pm BST: US PPI index of producer prices for May
