Sunday 22 February 2009

Centrica set to report bumper £2 billion profits

CENTRICA, the owner of British Gas, will court fresh controversy next week when it reports annual profits of about £2 billion and an increase to its dividend while steadfastly refusing to cut household electricity prices.

Chief executive Sam Laidlaw is expected to justify the profits by giving details of a multi-billion-pound investment programme that the company plans for the coming years in renewables, nuclear and gas production and storage.

He will also be grilled by investors and analysts over his determination to complete the controversial £3.1 billion acquisition of a 25% stake in the nuclear operator British Energy from its French owner EDF Energy.

Since the deal was struck last year, power and gas prices have collapsed, making what was a generous top-of-the-market deal look even more costly. A minority of investors and some analysts have called for Laidlaw to abandon the deal or negotiate a lower price. EDF and Centrica have said they hope to close the deal by the end of next month, and Laidlaw is expected to reiterate his support for it this week.
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