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Centrica’s chief executive Iain Conn is to step down from his role after an “exceptionally challenging” first half of 2019, the company announced today (30 July).
The British Gas owner saw a statutory operating loss for the six months to 30 June of £446 million compared to a £704 million profit last year.
As in a previous trading update, the company blamed the implementation of the UK default tariff price cap, low UK natural gas prices, extensions to outages at the non-operated Hunterston B and Dungeness B nuclear power stations and warmer than normal weather in both the UK and North America as having an impact on adjusted earnings and adjusted operating cash flow.
EBITDA fell by 19 per cent from £1.3 billion to £1.075 billion and adjusted operating profit dropped by 49 per cent to £399 million.
British Gas customer accounts were down by 178,000 in the first half. The company said this incorporated a spike in switching during March and April following the introduction of the price cap, with the numbers stabilising in May and June.
The price cap was also largely blamed for Centrica Consumer’s adjusted operating profit dropping 44 per cent to £240 million, including a “one-off £70 million impact” in the first quarter due to Ofgem’s revision to the methodology calculating supplier wholesale costs.
Centrica announced it would be exiting oil and gas production, in addition to nuclear power generation, completing its “shift towards the customer”.
Conn is anticipated to stay with the company until at least next year’s AGM.
Speaking about his departure, Conn said it was the “right time” for him to step down.
He said: “We felt at this juncture of this final stage in the repositioning of the portfolio in line with what we laid out in 2015 was the right time for me to signal that I am going to step down and that somebody new will take over the smaller customer-facing company which I hope to have largely delivered on by the time I leave.
“As I haven’t left yet and I don’t intend to for some time, I don’t really want to look back and talk too much about what we’ve done except to say that I’m very proud of what Centrica’s team has achieved in turning this company from one which was relatively ill-suited to the changes taking place in the energy system to the point where we are becoming in tune with it and are going to become fit for it as a customer facing company in energy services and solutions.”
Charles Berry, chairman of Centrica, said: “Iain has led the strategic repositioning of Centrica since 2015 and has been the driving force behind our plan to turn Centrica into a sustainable business that is built around delivering clean, affordable energy and high-quality services and solutions for our customers, and to respond to the significant global challenge of moving to a lower carbon energy future.
“Iain has now agreed with the board that, while he will continue to focus on driving this transformation, including pursuing the announced divestments and continuing to drive performance and efficiency, he will also support an orderly succession before stepping down in due course.
“I would like to take this opportunity to thank Iain for his hard work and passion, and for his ongoing commitment to transforming Centrica into a business with a stronger foundation for sustainable growth.”
Centrica also announced it is starting a new partnership with Ford and will deliver a dedicated home charging installation service and EV tariffs from British Gas and Bord Gáis Energy.
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