Energy giant Centrica has maintained its full year profit forecasts despite the fact that its British Gas and power trading businesses have hit their targets two years early.
At its annual shareholder meeting, it said that results for the second half of its financial year, which runs from July to December, will be affected by lower commodity prices and volatility.
However, it said that after years of volatile energy prices affecting its results, both British Gas and its energy trading business will return to what it calls their “sustainable” medium term profit ranges this year. It added that British Gas Services & Solutions, which includes boiler repair services, home cover packages and Hive smart home solutions, is likely to produce better results this year than it did last.
Centrica added: “The company’s performance so far this year has been in line with expectations against the backdrop of a more normalised external environment.”
AJ Bell investment director Russ Mould said that the pressure is on Centrica chief executive Chris O’Shea to show he can grow the business without help from the soaring commodity prices that boosted its profits in recent years.
“Usually when a company talks about returning to a more normalised environment that’s good news, but for energy outfit Centrica it means the super-sized profits its wholesale operation enjoyed from a spike in commodity prices are a thing of the past,” he said.
“Centrica struggled before the energy crisis and moving forward we will find out if the business and current management can perform against a less helpful backdrop.”
