Massara pays the price for Npower woes

Npower’s chief executive Paul Massara is to leave the company following a 60 per cent decline in the supplier’s domestic business profits for the first half of this year.

Npower’s parent company, RWE, said it is “acting on the unexpectedly negative mid-year result for 2015” in announcing the departure of both Massara and chief financial officer Jens Madrian.

RWE said both Massara and Madrian will leave Npower “on their own wishes and by mutual consent”, confirming rumours of their departure which have been circulating since Friday, and thanked them for taking the company from bottom of customer service tables for the big six, to fifth position.

Paul Coffey is to take on the role of chief executive, as well as country chair UK. Martin Miklas, currently chief financial officer at RWE Polska, will take over as chief financial officer for Npower while Dirk Simons, currently chief financial Officer of RWE Innogy, will become chief operating officer.

Npower’s domestic supply business suffered a slump in profits to just £38 million from £109 million as 300,000 customers deserted the supplier due to continuing process and billing system problems.

RWE said the outlook for the supply UK division has had to be corrected downwards considerably.

RWE’s chief operating officer and deputy chairman of the executive board Rolf Martin Schmitz said: “The UK remains an important market for us. We will do everything in our power to overcome the operational and technical difficulties in the UK supply business.”

RWE’s chief executive Peter Terium said: “At this time we need a chief executive at RWE Npower who will focus on fixing the basic process improvements and has a track record of implementing operational process changes. In his previous functions, Paul Coffey has repeatedly demonstrated this expertise.”

As announced in the mid-year figures, Npower aims to have turned around its domestic business by the end of 2016.

Coffey transferred to Npower from his previous role at RWE Innogy on 1 April 2015, allowing Coffey to have “the opportunity to become familiar with current conditions at the company over the past few months.”

He has many years’ experience in many areas of the European energy industry having been with the RWE group since its entry into the UK energy market in 2003.

Coffey said: “It is clear that RWE Npower’s domestic business is not performing in the way that our customers, shareholders, or our employees demand. Since joining npower in April this year I have been hugely impressed by the energy and commitment of our staff to do the right thing for our customers. This is one of the fundamental ingredients of future success for this business.”