Centrica blames warmer weather and nuclear problems for profit warning

Centrica has issued a profit warning,blaming a range of factors including warm weather, which reduced sales of gas and electricity in the UK, and problems with its nuclear power stations. “Full-year adjusted earnings per share in 2014 are now expected to be in the range 19-20p, compared to a range of 21-22p at the time of our interim (half year) results,” it said.

The utility company said it expected profits to grow in 2015, with improvements in many of its businesses including home services, but it also warned that any advances could be significantly offset by the impact of lower oil and gas prices in its upstream wholesale operation.

The management update from the UK’s largest provider of domestic power represents a downbeat “goodbye” from Sam Laidlaw, the longstanding chief executive. It also represents an immediate challenge for Iain Conn, the former BP director, who takes over from him on 1 January.

One of the key difficulties has been caused by the two nuclear power stations, Heysham 1 and Hartlepool. Co-owned with EDF Energy, they have had to be taken offline for inspections after cracks were found in a boiler. They are expected to return to service soon but may have to work at reduced power.

Centrica also said warm weather had pushed down average residential gas consumption by 21% in the first 10 months of 2014 compared with the same time last year. Electricity consumption is down 7%.

The company admitted that the number of residential energy accounts on supply had continued to fall since June – down 50,000 to 15 million –but it also said there had been a bounceback to growth in recent weeks.

Despite the problems, Centrica has completed a £420m share buyback programme and expects to deliver real dividend growth this year. Its shares fell slightly in early trading on Thursday.