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British Gas profits boosted by colder weather

Published: 08:47 27 Apr 2015 BST

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Colder weather has sparked a profits recovery at British Gas’s residential and business operations, but not by enough to offset lower oil and gas prices elsewhere. said owner Centrica (LON:CNA).

Household gas consumption was 10% higher in the three months to March due to the drop in temperatures.

Customer numbers were broadly unchanged at 14.8mln as tariffs fell on average by 5%, while a further £50mln will be set aside over the next three years to improve its consumer service.

Energy will be a major battle ground in the forthcoming election. Labour has threatened to freeze gas and electricity prices until 2017 if it wins the next election, and today Centrica cautioned earnings would be affected both by the outcome of the election and also the competition authority review currently underway.

Low prices, meanwhile, are continuing to hit its upstream exploration and production business and will outweigh any improvement in British Gas, it added.

A new round of cost cutting will save £100mln in production costs, in addition to the previously flagged reduction in capital expenditure to £800mln this year and to around £650 mln in 2016.

A partial shut-down of the Rough gas storage facility for maintenance may also be extended for longer than expected. 

Centrica warned over the impact of lower oil prices in February, when it cut its dividend and posted a net annual loss of £1bn.

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