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Centrica warns on profits as it freezes prices

Published: 21:16 08 May 2014 AEST

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British Gas owner Centrica (LON:CNA) had good news for its customers and bad news for shareholders on Thursday.

The good news is that the company is not planning any change in residential energy prices this year. Lest you imagine the company has taken pity on consumers battered by a succession of price hikes way above the inflation rate, the company said this decision reflects the competitive market and wholesale price environment.

The bad news, for shareholders, is that the company has issued another profit warning, indicating that full-year earnings per share are now expected to be around 22p/23p; the median forecast among brokers following the company is currently 24.94p.

The group expects to return to earnings growth in 2015, subject to the usual variables of commodity prices, weather and asset performance.

“Investment in security of supply remains a key priority,” said Sam Laidlaw, the well-remunerated chief executive who is scheduled to quit the company when a replacement can be found.

“We continue to invest in new sources of gas for the UK and we have commitments totalling around £60 billion to help secure energy for our customers,” he added.

The company revealed that it has further strengthened its relationship with Qatar Petroleum International (QPI), the international arm of Qatar Petroleum, through an agreement whereby QPI will acquire 40% of Centrica’s Canadian natural gas business for C$200mln (£107mln).

Shares in Centrica were down 2.8% at 318p in lunch-time trading.

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