Centrica has seen its share price drop by more than 7% after announcing that its British Gas residential energy division has been impacted by "warmer than normal weather" in Q2.

The FTSE 100-listed energy firm stated that while its residential and business energy supply businesses have seen organic growth in customer numbers in the year to date, its storage plus division’s operating loss is now set to be at the higher end of its £50m to £100m range for the full-year.

As a result, Centrica added that discussions were "ongoing" with the Government to secure a regulatory support mechanism that unlocks £2bn of investment.

Centrica has reaffirmed its expectations for British Gas residential energy supply to produce a medium-term operating profit of between £150m and £250m, as outlined in its 2024 preliminary results, with Centrica Energy expected to reach between £250m and £350m.

However, Centrica Energy is set to be towards the bottom of this guidance, with profitability heavily weighted to the second half, due to "more challenging market conditions in the gas and power trading segment".

Furthermore, Centrica stated that it is "closely monitoring" the impact of potential global trade restrictions, although it does not anticipate any material impact on its business or financial results.

It also intends to increase its full-year dividend for 2025 to 5.5 pence per share.

Investment director at AJ Bell, Russ Mould, added: "While Centrica is sticking with full-year guidance and current dividend plans, the company does note challenging conditions. It would not be a major surprise if it was forced to cut guidance, particularly given the expected second-half weighting for the current financial year.

"Centrica expects heavy losses from its energy storage operations centred around the Rough gas field in the North Sea. It is looking for Government support to increase capacity and convert it into a hydrogen-ready facility.

"While the Exchequer hardly has lots of money to throw around, the strategic importance of Rough as a buffer to help cover periods of high energy demand means Centrica may get a sympathetic hearing."

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