Trading Statement

Centrica PLC
                  

                     CENTRICA FULL YEAR 2007 TRADING UPDATE

Centrica plc has today issued the following trading statement ahead of entering
close period on 1 January 2008.

Overall the company has performed well in 2007 although market conditions have
become more challenging in recent months as wholesale gas prices have risen.
This has altered the mix of the Group's profits significantly, leaving
underlying pre-tax results* in line with expectations but with a slightly
increased effective tax rate.

British Gas Residential has continued to add customers in the second half,
regaining the number lost in the first quarter, and we now once again serve 16.0
million customer accounts. This is partly due to the lead British Gas took in
lowering retail tariffs twice in March and April 2007 and partly to the
improving customer service. Although we have made substantial progress here,
improving customer service further remains a key priority. We remain on track to
achieve our cost reduction targets.

The higher wholesale gas prices have reduced margins for gas and power sales in
the UK residential market. Nevertheless, we still expect British Gas Residential
to be profitable in the second half of this year, with full year margins still
above the long run expectations due to the strong first half. Looking forward,
the high wholesale prices will, if sustained, create a more difficult
environment for retail energy suppliers in the UK going into 2008. We will
continue to monitor this with regard to future pricing policy.

In Centrica Energy the high wholesale energy prices in the second half have
resulted in increased gas and oil production volumes and we currently expect the
total 2007 hydrocarbon production levels to be slightly ahead of 2006. In
contrast, although the legacy Industrial and Commercial gas supply contracts are
expected overall to make a small positive contribution in the second half, they
moved back into a loss position in the fourth quarter due to the higher gas
price and, at current forward prices, would be increasingly loss-making in 2008.
The power generation segment is expected to be around break even in the second
half, with the result impacted by lower realised spark spreads and higher levels
of plant outages.

The rest of the Group has continued to perform well. Both British Gas Services
and British Gas Business have had a strong second half and are forecast to
deliver full year operating profit ahead of expectations. The North American
business is expected to be marginally ahead of the 2006 full year result,
despite the negative impact of foreign exchange translation.

Underlying interest charges in the second half are below expectations. However,
the results will also include the impact of prepaying the finance lease on the
Humber power station, which will simplify the Group's debt structure, as well as
generating a positive net present value and earnings impact over the remaining
life of the plant. Although this has no material impact on the level of net
debt, it will result in a one-off additional interest charge of around £40
million and, as a result, will reduce earnings per share* by 0.6 pence.

Excluding the impact of the Humber lease prepayment, the Group's 2007 pre-tax
results* are in line with expectations, with the reduction in UK residential
margins in the second half of the year offset by the stronger performance from
Centrica Energy and the lower underlying interest charge. However, the shift in
profits from downstream to the more highly taxed upstream is expected to
increase the Group's 2007 tax rate from current market forecasts to just under
40%.

The Company will announce its 2007 full year results on 21 February 2008.

Enquiries:
Centrica Investor Relations 01753 494900  Centrica Media Relations 0845 072 8001

* including joint ventures and associates stated net of interest and taxation,
and before exceptional items and certain re-measurements and, for underlying
pre-tax results excluding the one-off impact of the Humber lease prepayment