Yahoo Finance Profits plunge at British Gas as customers depart and workers strike
British Gas lost another 164,000 customers in the last year as it faced criticism for upping prices and competition from rivals.
Profits at parent company Centrica plunged 31% to £447 million, as cost cuts failed to compensate for the impact from customer defaults and wider Covid-19 hits.
It booked £1.6 billion in impairments and pension costs and faces a major battle with unions.
Centrica chief executive Chris O’Shea said a sweeping overhaul has “only just started”, with more than 3,000 jobs gone by the end of 2020 under a cost-cutting plan that will see 5,000 roles axed.
Customer numbers slipped below 7 million.
Stuart Lamont, investment manager at Brewin Dolphin, said: “Centrica’s results reflect the fact that it is a business in the middle of a significant transition period. Revenue and profitability have been impacted by Covid-19, but there are some positive signs: its balance sheet is in better shape than a year ago, while the sale of Direct Energy has reduced debt and is a good step towards simplification.”
Centrica is also facing industrial action.
The GMB union said: “Around 7,000 British Gas engineers will down tools for four daysâ¯from Friday, February 26 until Monday, March 1â¯overâ¯the company’s plan to sack them all and rehire them on worse terms and conditions.”
Centrica shares slid another 3p to 50p today. Five years ago they were closer to 240p.
The group also announced it was bringing forward its commitment to have net zero greenhouse gas emissions to 2045 – five years ahead of its previous target and the UK deadline.
It also vowed to help its customers be net zero by 2050.
The results showed earnings at its British Gas energy business slumped 35% to £80 million as it lost another 164,000 customers last year, although it said this was all in the first half.
Mr O’Shea said: “We have made a good start to the turnaround of Centrica, with the sale of Direct Energy now complete and our significant group restructure on track.
“However, our journey to transform has only just started.
“It won’t be easy, but I am confident we have the people, the brands and the market positions to deliver a successful turnaround in the coming years.”
Justinâ¯Bowden, GMB National Secretary, said:
“Last summer, when British Gas decided on fire and rehire pay cuts for gas engineers, it was already a profitable company - as today’s results confirm.
“So there is no need to hurt workers, customers and shareholders. Refusing to take fire and rehire off the table is the main obstacle to a settlement at ACAS.
“Strike daysâ¯23â¯to 26â¯will go ahead at British Gasâ¯from tomorrow and GMB’s executive has determined action could continue to mid-April in this deadlocked dispute.
