British Gas owner sees earnings plunge as it shed more customers

British Gas owner Centrica has seen annual underlying earnings plunge by nearly a third as it shed more customers and took a hit from the pandemic and warmer weather.
British Gas owner Centrica has seen annual underlying earnings plunge.British Gas owner Centrica has seen annual underlying earnings plunge.
British Gas owner Centrica has seen annual underlying earnings plunge.

The group reported a 31 per cent drop in underlying operating profits to £447m for 2020, with a £250m impact from Covid-19 on energy demand and customer defaults partially offset by moves to slash costs.

On a statutory basis and including its offloaded Direct Energy business, the group swung to a £52m operating profit from losses of £849m in 2019.

Hide Ad
Hide Ad

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.

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 per cent to £80m as it lost another 164,000 customers last year, although it said this was all in the first half.

The group warned over the outlook as ongoing Covid-19 restrictions are set to put pressure on demand and amid an ongoing bitter dispute with the GMB union and ongoing industrial action in its UK services business.

Hide Ad
Hide Ad

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."

The group's British Gas energy business took a hit of around £40m due to warmer weather in 2020, which knocked demand for gas and electricity, while it also set aside about £40m for customer defaults due to the coronavirus crisis.

Overall, Centrica faced an £80m bill for customer bad debts due to the pandemic, but it said it was able to offset this and other Covid-19 pressures by cost-cutting action and scrapping bonus payments to top bosses for 2019.

Hide Ad
Hide Ad

On the outlook, it cautioned over further likely bad debt charges due to rising unemployment, though it expects more than another £100m in cost savings to help soften the blow.

---

Support The Yorkshire Post and become a subscriber today.

Your subscription will help us to continue to bring quality news to the people of Yorkshire. In return, you'll see fewer ads on site, get free access to our app and receive exclusive members-only offers.

So, please - if you can - pay for our work. Just £5 per month is the starting point. If you think that which we are trying to achieve is worth more, you can pay us what you think we are worth. By doing so, you will be investing in something that is becoming increasingly rare. Independent journalism that cares less about right and left and more about right and wrong. Journalism you can trust.

Thank you

James Mitchinson