Section:GDN 1N PaGe:26 Edition Date:190731 Edition:01 Zone: Sent at 30/7/2019 18:52 cYanmaGentaYellowb
- The Guardian Wednesday 31 July 2019
26Centrica chief agrees to step down as
British Gas owner posts fi rst-half loss
Jillian Ambrose
Julia KolleweIain Conn has agreed to step down as
chief executive of Centrica, the owner
of British Gas, after the energy giant
swung to a loss for the fi rst half of the
year and slashed shareholder payouts.
The embattled energy boss said he
would retire from the board by next
year’s annual general meeting , fi ve
years after taking the reins of the com-
pany in 2015.
The former BP executive has faced
increasing pressure to step down after
a steady decline in the company’s
market value, which is now a quarter of
what it was when he took the top job.
Since then Britain’s biggest energy
supplier has lost more than 1 million
customer accounts and made thou-
sands of job cuts as part of a plan to
steady the company.
Conn said he had “agreed with the
board that this is the right thing to do”after “months of talks” about the com-
pany’s future.
He announced his departure along-
side worse-than-expected fi nancial
results for the fi rst half of the year and
a “deeply regrettable” dividend cut
for investors.
Centrica’s shareholders, which
include about 600,000 individual
investors, will receive less than half
the expected return after the company
slashed its interim dividend by 58% to
1.5p a share. It said the full-year divi-
dend total would also be cut by 58%,
from 12p to 5p a share.
The company’s share price plunged
19% yesterday to 77p, the lowest in
more than 20 years. Centrica was the
biggest faller on the FTSE 100.
The company announced its low-
est dividend in 15 years less than
four months after it reveal ed it had
handed Conn a 44% pay rise , to £2.4m,
for 2018.
The increase in pay, which angered
trade unions, was awarded despite adiffi cult year in which the company
imposed two bill increases, issued a
warning on profi ts and announced
4,000 job cuts.
Conn said he ha d reinvested most
of his bonus payouts in the company
while he worked to shift Centrica’s
traditional energy business towards
selling energy services and devices.Many City analysts are uncon-
vinced that the plan can bear fruit,
after a series of disappointing fi nan-
cial results for Centrica in recent years.
The company posted a pre tax loss of
£569m for the six months to 30 June,
compared with a profi t of £415m last
year.
Centrica blamed an “exceptionally
challenging” environment in the fi rst
half of 2019, including the government
price cap on standard energy tariff s
and additional pension contributions.
The swing to a pre tax loss is the
latest blow to the owner of Britain’s
biggest energy supplier, which was
already planning to sell its nuclear,
oil and gas business units to pay off
debts and cut thousands of jobs from
its shrinking workforce.
“It has been an exceptionally chal-
lenging fi rst half with some really
diffi cult circumstances,” Conn said.
“Our results were weak.”
The group took a pre tax charge of
£346m in the fi rst half. This included£257m of restructuring costs, £64m
one-off pension costs and asset write-
downs of nearly £90m, partly owing to
the fall in near-term gas prices.
But Conn said the company “has
momentum” and that should bring a
return to growth in the second half of
the year and into 2020.
Although British Gas lost 178,000
UK home energy supply accounts in
the fi rst half, Conn said the fi gures
marked a slowdown in losses com-
pared with recent years because its
prices were more competitive and its
brand remain ed strong.
He said Centrica’s new deal with
Ford to provide electric vehicle tar-
iff s and charge points was an example
of “where we are moving to” in the
future.
Centrica plans to quit oil and gas
production to focus on customers, and
expects to sell its last major asset, its
stake in the oil and gas venture Spirit
Energy, by the end of 2020.
Conn added that the company was
speaking to “at least two groups” of
investors that were interested in buy-
ing its stake in EDF Energy’s fl eet of UK
nuclear reactors.
Charles Berry , the chairman, said:
“Iain has led the strategic reposition-
ing of Centrica since 2015 and has
been the driving force behind our
plan to turn Centrica into a sustain-
able business.”Full steam ahead Jim Smith, Mallard steam traction inspector, takes a break at
York station. Mallard, right, holder of the world speed record for steam locomotives,
was moved from the National Railway Museum to mark the launch of LNER’s
Azuma train, left, built in County Durham using bullet-train technology.PHOTOGRAPH:
DANNY LAWSON/PAGiff gaff fi ned £1.4m
for overcharging
phone customers
over eight years
Mark SweneyGiff gaff has been fi ned £1.4m for over-
charging 2.6 million mobile phone
customers over an eight-year period.
An Ofcom investigation revealed
that the network, which is owned by
O2’s parent company, Telef ónica , over-
charged users a total of almost £2.9m.
The communications regulator said
the billing mistake was “unacceptable”
and imposed a further £50,000
fi ne because Giff gaff failed to pro-
vide accurate information during its
investigation.
Giffgaff overcharged customers
from May 2011 to February 2019.
“Getting bills right is a basic duty
for every phone company. But Giff gaff
made unacceptable mistakes, ” said
Gaucho Rasmussen , Ofcom’s direc-
tor of investigations and enforcement.
“This fi ne should serve as a warn-
ing to all communications providers:
if they get bills wrong, we will step in .”
Ofcom said the fi ne would have
been £2m but the penalty was reduced
by 30% because Giff gaff agreed to set-
tle the case and admitted the mistake.
Giff gaff customers who pre-paid
for “ goodybags” – bundles of voice
minutes, text messages and data- were in eff ect charged twice, the reg-
ulator said.
Source: Refinitiv20010025015050Centrica shares fell to 77p yesterday
Share price, pence3002015 2016 2017 2018 2019РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS
ЛИ
ЗПОДГО
ТОВИЛААГГГРР
УУППППАА"What'sNews" News" News"VK.COM/WSNWSVK.COM/WSNWSPHOTOGRAPH:VK.COM/WSNWSPHOTOGRAPH:
DANNY LAWSON/PAVK.COM/WSNWSDANNY LAWSON/PA