Centrica PLC (LON:CNA) shares plunged on Thursday as investors became worried about the safety of its future dividend payments after the British gas owner warned its 2019 financial performance will be impacted by energy bill price caps as it reported mixed 2018 results.
The FTSE 100-listed firm saw its total consumer account numbers fall by 1% in 2018, although revenue still rose by 6% to £29.7bn for the year ended 31 December.
READ: British Gas owner Centrica warms up as UK regulator raises price caps
The company’s adjusted operating profit increased by 12% to £1.39bn, boosted by higher commodity prices, with its adjusted gross margin up 5% to £4.253mln.
Iain Conn, the company’s group chief executive said: "Centrica's financial performance in 2018 was mixed against a challenging external backdrop.”
He added: “Our 2019 financial performance will be impacted by the UK default tariff cap and continuing lower volumes in E&P and Nuclear, meaning our 2018-20 target range for average adjusted operating cash flow is under some pressure.”
The CEO continued: “We are taking actions to strengthen the company in 2019 and improve underlying performance in 2020, including driving cost efficiency hard and delivering further divestments, and as a result, net debt levels remain underpinned.”
The group proposed a final dividend of 8.4p, maintaining its full-year pay-out at 12p per share, but made no mention of future dividend plans amid the cost-cutting plans.
In a separate statement, Centrica also announced plans to sell Clockwork Inc, its North American franchisee home services business for US$300mln after a slower than expected recovery in its North America business in 2018.
In early morning trading, Centrica shares plunged 12.5% to 120.05p.