Centrica Preliminary Results 2007

Well good morning ladies and gentlemen and welcome to the Centrica Results presentation. In a few minutes Nick will provide you with a detailed insight into the financial performance of the company and Sam will then set out our achievements in the context of the market conditions that prevailed in 2007 and the challenges we are going to face in 2008.

Clearly whilst the substantial improvements in operating profit and earnings in 2007 were very pleasing and hard earned, the wind in our sails that delivered an extraordinary first half, turned sharply against us in the second half. With rapidly escalating wholesale prices, eroding the strong margins we had established in the first six months.

Erratic wholesale markets therefore formed the backdrop for market leading price reductions in British Gas in the first half of 2007. And the industry wide increases in the early part of this year.

Nevertheless our competitive position has been strengthened through our pricing strategy, our focus on cost reduction and our close attention to improved customer service which have led us to rebuilding both market share and customer satisfaction. In these circumstances the Board believe it is appropriate for shareholders to benefit from the strong financial performance in the unusual conditions of 2007 by providing a 17% increase in dividend this year.

Whilst wholesale markets and global energy prices remain largely outside our control, I would just like to take a few minutes to emphasise the key areas that are within our grasp and where considerable progress has been made in strengthening our business model.

The core strength of any business is the quality of the management. And under Sam’s leadership, I believe we are now assembling a team with the right mix of talent, experience and enthusiasm which is rapidly transforming the underlying health and growth prospects of the business.

The effectiveness of the team is particularly evident in the improvements in customer service in British Gas, our leadership in green energy, the robustness of our Storage business, the resilience of the North American operations and the remarkable growth of British Gas Home Services.

Upstream our ability to secure at sensible price levels, further substantial gas and electricity assets to provide greater balance in our Business Model has been limited. But we have had some success recently which Sam will outline later.

However it remains important to ensure that impatience does not lead to imprudence and we are resolute in our commitment to shareholder value, when assessing the opportunities that are available and balancing those with returns of capital to shareholders. Sam and the team continue to carefully examine innovative ways of balancing the demands of value creation with the need for supply security.and this will remain our priority in 2008.

I will now hand over to Nick to for the detail financial results.

• Go to next page