Profits at British utility Centrica slumped 35% last year, hit by a government price cap on some energy bills and the impact of lower natural gas prices on its production business.

The news sent shares in the company - which owns Bord Gáis Energy here - down as much as 17% in London trade this morning. 

The company, whose British Gas unit is Britain's largest energy supplier, said adjusted operating profit fell to £901m from £1.39 billion in 2018. 

"2019 operating profit and earnings were materially impacted by a challenging environment, most significantly the implementation of the UK default tariff cap and falling natural gas prices," chief executive Iain Conn said in a statement. 

"Looking to 2020, we expect to deliver earnings momentum relative to 2019 from our core customer divisions, but upstream (production) earnings are likely to be impacted by the lower commodity price environment," he added. 

Centrica said it expected £1.6-1.8 billion of adjusted operating cash flow this year, down from £1.83 billion in 2019, due to low energy prices. 

A cap on electricity and gas bills came into effect in January 2019 and was a flagship policy of former British Prime Minister Theresa May to end what she called "rip-off" prices. 

Last week, energy regulator Ofgem reduced the cap from April 1 as wholesale prices had fallen between August 2019 and January 2020. Wholesale gas prices are around their lowest since 2009 due to oversupply and high storage levels. 

"We are in a very over-supplied situation. Front-end (prices) will stay weak through this year. If it does so, we expect earnings to be broadly balanced," Conn said on a media call. 

"Clearly if (wholesale) prices go back up, the upstream profit would go up and we get the value of our hedges back as we sell the gas to our customers," he added.

Centrica said extended outages at two British nuclear power plants due to operational issues last year had also been a factor in the lower operating profit. 

Nuclear generation volumes were down 14% to 10.2 terawatt hours in 2019 compared with 2018, due to outages at EDF Energy's Dungeness B and Hunterston B nuclear power stations. 

Centrica has a 20% stake in Britain's nuclear fleet but has said it wants to sell that by the end of 2020.

"We can't be certain we will sell the whole thing this year. We may have to sell our interest in two tranches and may not get both of them away this year," Conn said. 

Centrica's total customer accounts, which includes energy supply, home services and solutions in Britain, Ireland and North America, grew by 3%, or 722,000, last year. 

UK home energy supply customer accounts fell by 286,000, although the rate of loss was less than 2018, even amid high price competition and customer switching, Centrica said.