Centrica warns on profits despite British Gas price rises Centrica has defended price increases at its British Gas business - the biggest of the UK's big six energy suppliers - and warned that full-year profits will fall short of expectations by as much as 4 per cent. Nick Luff, group finance director, said on Thursday that poorer trading conditions across a range of Centrica's operations would see it deliver earnings per share similar to last year. Last year, Centrica's adjusted post-tax earnings were £1.4bn, equivalent to 27.1p a share. The FTSE 100 company had previously suggested earnings growth would be modest, leading analysts to pencil in an increase of between 3 and 4 per cent. Centrica's shares fell 5 per cent to 345.3p on Thursday. Although attention has been focused in recent weeks on price rises at the group's British Gas residential supply business, the company said pressure on other divisions at home and abroad was responsible for the lower-than-expected earnings for this year. Mr Luff cited tighter margins at the group's business supply businesses in both the US and UK, continued losses at gas-fuelled power stations in Britain, and low returns from the gas storage business centred on its Rough facility in the southern North Sea. Centrica also insisted that price rises of nearly 10 per cent in the British Gas division would result in slightly lower full-year margins at the energy retailing business of just below 5 per cent. Higher costs for British Gas are being passed on to households, with domestic gas prices set to rise by 8.4 per cent, and electricity prices by 10.4 per cent, from November 23. The price increases will push up average dual-fuel bills by £123, to £1,444 a year. The company - along with the rest of Britain's big six energy suppliers - has attracted a wave of criticism from the public and in Westminster for raising prices ahead of inflation. However it repeated its claim that external costs were responsible for the increases. In 2012, British Gas delivered £606m towards Centrica's total operating profits of £2.74bn - an 11 per cent increase on the division's performance in 2011. Mr Luff declined to comment on the impact of the recent wave of price increases would have on margins at British Gas during 2014. However, he said Centrica would act quickly to rein in prices if the UK government agreed to switch the burden of environmental and social levies from customer bills into general taxation. "It there are any changes to the environmental programmes that means a reduction in costs, we will pass that back to customers as fast as possible," he said. Last week Sam Laidlaw, chief executive of Centrica, announced that he had decided not to take his bonus for this year after public anger about rising household bills. He conceded that the energy sector had to act to rebuild trust with consumers that he said was at an "all-time low." British Gas ended October with a total of 15.7m residential customer accounts, roughly in line with the number supplied at the half year. But Mr Luff acknowledged that price increases by British Gas and its competitors had prompted an upswing in the number of customers reviewing and switching their suppliers. Commenting on the update, Martin Brough, analyst at Deutsche Bank, said: "While the UK retail pressures are understandable, the more concerning incremental news is on North America."