(qlmbusinessnews.com via telegraph.co.uk – – Thu, 22 Feb 2018) London, Uk – –
The boss of British Gas owner Centrica has attacked the Government’s cap on energy tariffs this morning as the company revealed plans for 4,000 job cuts following a customer exodus and a drop in annual profits.
Centrica lost 1.4m UK domestic customers in 2017 but blamed its declining earnings on problems in its commercial division, particularly in North America.
The energy provider has already scrapped 6,000 roles in a battle to remain profitable in the face of tighter regulation, mounting competition and rising costs.
The FTSE 100 company’s chief executive Iain Conn said a combination of “political and regulatory intervention in the UK and the profits slump in North America had “created material uncertainty around Centrica”, he said, adding: “Although we delivered on our financial targets for the year, this resulted in a very poor shareholder experience
“We regret this deeply, and I am determined to restore shareholder value and confidence,” he added.
The Government announced plans towards the end of last year to cap so-called standard variable tariffs, which customers are forced to pay if they fail to switch providers or negotiate a new tariff once their fixed deal expires.
In response, Centrica and its fellow “Big Six” suppliers E.on and Scottish Power said they would scrap the tariffs altogether.
Its adjusted operating profit, stripping out those and other one-off costs, was down 17pc to £1.25bn, while revenues grew 3pc to £28bn.
Centrica’s shares have been in decline since 2013, falling to their lowest point since 1999 earlier this month, but were up 2.6pc to 136p in morning trade.
Neil Wilson, an analyst at ETX Capital, said: “While this mea culpa from Conn looks bad, it was all fairly well guided in November, hence why the shares are responding positively this morning to news that Centrica plans to ramp up its cost-savings programme.”
The company also maintained its dividend at 12p per share.
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