AGM Statement

Centrica PLC
                  

9 May 2005

Centrica 2005 AGM Statement

At the Centrica Annual General Meeting to be held today, Chief Executive Sir Roy
Gardner will tell shareholders that the company's financial performance in the
first quarter of 2005 had been good and had benefited from wholesale gas prices
which were significantly below the level previously predicted by the forward
curve. Looking ahead he will confirm that there is still considerable volatility
in the forward gas curve. Prices for the fourth quarter of 2005 and the first
quarter of 2006 are currently 25% higher than at the time of the company's 2004
results announcement in February 2005 and more than 40% higher than at the time
of its trading update in December 2004. If wholesale prices stay at these levels
trading conditions will be more difficult in late 2005 and 2006 and an
appropriate retail price increase will be necessary to maintain gross margin.
Given the continued volatility no retail pricing decision has yet been taken.

In the four months to the end of April the company lost net 382,000 energy
accounts and, looking forward, no longer expects to hold its energy product
holdings flat in 2005 as a whole. It is encouraging to note however that
following competitors' price increases, the introduction of new propositions and
increased sales resources, weekly energy sales levels are now running ahead of
the period before prices were increased in September 2004.

Testing of the new billing system remains on track and will enter its most
demanding implementation phase when the pilot begins in the middle of this year.
Rollout of the new work management system in the Home Services business is now
proceeding rapidly with over 350 engineers live and operational. Progress is
also being made on reducing the cost base with a further significant number of
job reductions announced at the end of February.

Other highlights for the Group include: -

--  Upstream, Centrica signed a power purchase contract with International Power
    in February bringing the first direct coal linkage into its generation
    portfolio. In March it successfully bid for regassification capacity at the
    Isle of Grain LNG terminal which will enhance its competitive position in
    upstream negotiations. In addition it has erected its first wind turbines at
    Glens of Foudland which is now generating the company's first green power
    and has also commenced construction of its offshore wind farm at Barrow. Gas
    production at Morecambe in 2005 is expected to be in line with the guidance
    given in February.

--  In Centrica Storage the average selling price of Standard Bundled Units
    (SBUs) for the 2005/6 storage year was 33% higher than the previous year.
    This increase will be reflected in the financial performance of Centrica
    Storage in both 2005 and 2006. Further reflecting the increasing value of
    storage the company has already sold over 50% of the capacity available to
    third parties for the 2006/7 storage year.

--  In Texas the company is continuing to grow its customer base and has filed
    an increase of around 10% in its Price to Beat tariff to offset higher
    commodity costs. Good progress is also being made in the business market
    sector.

Elsewhere in the Group performance remains in line with expectations.

The Board continues to review upstream investment opportunities but remains
resolute that funds will only be employed to create shareholder value. To the
end of April Centrica had bought back £365m of its own shares for cancellation
and expects to complete its current £500m buyback programme within 12 months
from commencement.

Sir Roy Gardner will say 'Financially we have had an encouraging start to the
year but the winter period remains uncertain for all energy suppliers in the
light of continued increases in forward wholesale commodity prices. We will
continue to take all the steps we can to mitigate the impact on our customers
but retail price rises across the whole of the industry cannot be ruled out.'


Enquiries:

Centrica Investor Relations   [phone] [e-mail]

Centrica Media Relations      [phone] [e-mail]