British Gas expects profit hit after warmer than usual spring

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The parent company of British Gas has said the energy supplier’s profit will take a hit after warmer than usual spring weather.

Centrica said on Thursday that the residential energy arm of British Gas “has been impacted by warmer than normal weather in Q2 (the second quarter)”.

However, it is still expected to be within its £150 million to £250 million sustainable profit margin, it added.

The company was updating investors ahead of its annual general meeting on Thursday morning.

Centrica added that it remains in talks with ministers about securing financial support to expand and revamp its Rough gas storage site.

The facility in the North Sea is the largest of its kind in the UK, but Centrica had stopped filling it with natural gas last month amid concerns over its financial viability.

The company usually starts injecting fuel into the Rough site by spring, but it had not done so by mid-April, according to reports.

Centrica said on Thursday that it is running at a loss of between £50 million and £100 million, but that it is pressing ministers for more financial support.

“Constructive discussions are ongoing with the UK Government to secure a regulatory support mechanism that unlocks £2 billion of investment to increase Rough’s capacity and ultimately convert it into a hydrogen-ready storage facility,” it said.

While Britain does not rely heavily on gas storage compared with other countries’ energy systems, the Rough site comprises about half of its storage capacity, and acts as a buffer when the weather is especially cold and demand for gas spikes.

The company added that its energy trading arm, Centrica Energy, has taken a hit in the first part of this year as a result of “more challenging market conditions in the gas and power trading segment”.

And it added that it is “closely monitoring the impact of potential global trade restrictions and will continue to do so”.

“Given our diversified supply chains across key projects and operations, we do not currently anticipate any material impact on our business or financial results,” it said.

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