British Gas owner Centrica suffers 31% fall in underlying earnings to £447m for 2020 – as bosses blame pandemic and warmer weather for plunge
- Britain’s largest energy supplier reports £362m loss from continuing operations
- But this figure for 2020 was actually less than £783million loss posted for 2019
- British Gas owner also said it would not propose a full year dividend for 2020
- Said it would ‘recommence dividends to shareholders when prudent to do so’
British Gas owner Centrica has seen annual underlying earnings plunge by nearly a third as it shed more customers and was hit by the pandemic and warmer weather.
The Windsor-based group, which reported a 31 per cent drop in underlying operating profits to £447million for 2020, lost nearly 165,000 customers last year.
Britain’s largest energy supplier also reported a £362million loss from continuing operations for last year, but this was less than the £783million loss posted for 2019.
But on a statutory basis and including its offloaded Direct Energy business, the group swung to a £52million operating profit from losses of £849million in 2019.
The company also said it would not propose a full year dividend for 2020 and said it would ‘recommence dividends to shareholders when it is prudent to do so’.
British Gas has also suffered in recent months from strike action from members of the GMB union in a long-running dispute over pay and conditions.
British Gas owner Centrica has revealed a 31 per cent fall in underlying earnings to £447million
The union is campaigning against new contracts it says will lead to pay cuts and longer hours, but British Gas maintains it is trying to avoid redundancies and stressed that basic pay and pensions are being protected.
Centrica chief executive Chris O’Shea said he was ‘truly grateful for the efforts of all my colleagues’ to keep customers ‘warm, safe and supplied with energy’.
Centrica boss Chris O’Shea said he was ‘truly grateful for the efforts of all my colleagues’
He added that a sweeping overhaul has ‘only just started’ at the company, 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 results showed earnings at its British Gas energy business slumped 35 per cent to £80million 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.
Mr O’Shea added that the firm began a ‘major transformation’ last year and had made a positive start to this with a significant restructure project ‘on track’.
He continued: ‘However, our journey to transform has only just started, as we seek to restore shareholder value by improving customer experience, retention and employee engagement, while maintaining a strong balance sheet.
British Gas workers who are members of the GMB union go on strike in Windsor last month
‘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.’
From April 1, millions of customers with British Gas, EDF, E.ON, Npower and Scottish Power on standard variable tariffs can expect to pay almost £100 more each year.
This is after the regulator Ofgem increased the energy price cap by £96 to £1,138 a year, based on typical usage, and is the most that energy suppliers can charge.
Earlier this week British Gas revealed it had ordered 2,000 Vauxhall Vivaro electric vans, in one of the biggest such upgrades by a UK company so far.
Centrica has vowed to make all of its vehicles electric by 2025, and British Gas said 3,000 of its 12,000-strong fleet will be all-electric after the vans are delivered.