Centrica leap fails to offset Footsie blues

Market report Scott Reid

Centrica charged to the top of the Footsie leaders’ board after the Scottish Gas-owner ramped up its efficiency programme following a 17 per cent drop in annual profits.

The group confirmed that the majority of 4,000 job cuts would affect both its UK home and business units over the next three years, as it looks to meet a higher cost-cutting target of £1.25 billion per year by 2020.

Group chief executive Iain Conn said: “The combination of political and reg- ulatory intervention in the UK energy market, concerns over the loss of energy customers in the UK, and the performance issue in North America have created material uncertainty around Centrica and, although we deliv- ered on our financial targets for the year, this resulted in a very poor shareholder experience.

“We regret this deeply, and I am determined to restore shareholder value and confidence.”

George Salmon, equity analyst at Hargreaves Lansdown, said: “Centrica’s shares may have risen on results, but that’s a reaction to the news it seems intent on holding the dividend steady in the coming years more than anything else.” The shares closed up 7.5 per cent at 142.15p – the biggest riser on the FTSE 100, which fell 29.18 points to 7,252.39.

Barclays posted a 10 per cent rise in annual pre-tax profits, but the haul was lower than expected as its investment bank saw earnings dive 22 per cent. Still, shares rose 4.4 per cent to 211p. The transport group pencilled in a rosier outlook for the rail business following a “oneoff” boost linked to the London Midland franchise. Price comparison site Moneysupermarket.com saw its shares take a hammering after the FTSE 250 firm warned over slowing growth this year.