19th February 2015
British Gas owner Centrica has endured a steep fall in profits, as the warmer weather and the drop in the price of oil take their toll.
The FTSE 100 group reported on Thursday that its full-year profits for the 12 months ending 31 December 2014 had collapsed by 35% to £1.75bn.
Following the announcement, by 8:15am shares in the business had plummeted by some 8%, or 21.4p to 259.7p as traders off-loaded their holdings.
Notably profits in its residential division fell by 23% to £439m as the warmer climate led to less household usage.
Chief executive Iain Conn admitted that “2014 was a very difficult year” and that the recent fall in oil and gas prices creates a further challenge.
Looking to the fall in energy prices, where the price of oil has more than halved since June last year, Conn said the group is taking a number of immediate actions and “regrettably have had to take action” to cut the dividend by 30%.
He said: “We are also conducting a review of our longer term strategy, including the financial framework for the company. We will be in a position to share our conclusions by the time of the Interim Results in July 2015.
“Despite the current challenges, I am convinced that the Group is well-placed to build on its existing strengths and be able to compete and contribute materially against the emerging long term trends in global energy markets.”