British Gas income to be ‘considerably larger’ however not due to file costs

The proprietor of British Gas has revealed it expects income for its family provide enterprise to come back in “significantly higher” over the primary half of the yr.

Centrica made the announcement forward of its annual basic assembly (AGM) the place bosses are anticipated to face an investor revolt over a pay report that features a close to five-fold increase in the package awarded to chief executive Chris O’Shea.

The firm mentioned in its replace that the anticipated revenue hike in its retail division, which incorporates British Gas, was primarily right down to a discount in debt-related prices reasonably than any buying and selling windfall from file costs.

Energy regulator Ofgem’s worth cap gives an allowance to account for debt on power payments that can’t be recovered by suppliers and is in the end written off.

Households have confronted unprecedented payments attributable to rising wholesale costs linked to the battle in Ukraine however have been protected against the worst by authorities assist.

The present Energy Price Guarantee, which ends this month, means annual power prices have been restricted to £2,500 for the common family.

Plunging wholesale prices for pure fuel and electrical energy will depart the energy price cap, which returns from July, at an annual common of £2,074 between July and September.

Centrica mentioned its group efficiency over the primary 5 months of the yr had been sturdy total regardless of these reductions in wholesale costs.

It mentioned group adjusted earnings per share have been set to be on the “top end” of analyst expectations for the yr of a predicted vary between 16.5 and 24.7 pence per share.

Centrica mentioned its power advertising and buying and selling enterprise, together with fuel manufacturing volumes, had offset the impression of falling commodity costs.

In an announcement, the agency mentioned: “As always, uncertainties remain over the balance of the year, including the impacts of weather, commodity prices, the economic environment, any changes to regulation or government policy, asset performance and the competitive backdrop for our energy supply businesses.”

Shares have been down greater than 1%.

While Centrica is anticipated to win the motions set out at its AGM, asset supervisor Abrdn has reportedly mentioned it might vote in opposition to the group’s pay report for high administration.

Mr O’Shea took residence £4.5m for 2022 on the again of file income.

While the sum represented a five-fold enhance in rewards on the valuable yr, that was partly defined by the actual fact he had declined a bonus in 2021.