Iain Conn, the boss of British Gas owner Centrica, was a somewhat incongruous figure at the event in March, which is typically dominated by companies that pump hydrocarbons from the ground. Under Conn, who previously spent almost 30 years at BP, Centrica has been shifting away from oil wells towards smart thermostats and boiler repairs. But the urbane Scot had another significant reason to press the flesh at the Texas gathering: he may soon need a new job. In the 4½ years that he has run Centrica, the value of the former energy monopoly has withered from almost £14bn to about £5.3bn, leaving it clinging to its FTSE 100 perch. In just over a week, Conn will tell the market how he thinks the company can be revived, or at least set on a stable footing. The strategy update will not be pretty. Centrica is under attack from all sides: nimble new rivals, politicians keen to drive down household bills via price caps, and seismic changes in how power is generated, distributed, consumed and paid for. All that has got investors and analysts asking how much further Centrica has to fall — and if its business model is doomed to extinction. Centrica is far from alone in its struggles; the big six power companies have all been hammered in recent years. But as the leading supplier of gas and electricity, Centrica has much to lose. Its number of residential accounts fell by 742,000 last year, yet the £505.7m profit it made supplying households makes it a whipping boy for consumers and politicians. Recent events have amplified the pressure. The warm weather, depressed gas price, outages at some of the nuclear power stations it co-owns with EDF and disappointment at a North Sea well are eating into profits. Amid this storm, Conn has been trying to turn Centrica into a supplier of technology services. “In some ways I think of Centrica as a £15bn start-up,” he told The Sunday Times two years ago. “We are reinventing ourselves and going where we think the energy and services market is going.” The reinvention has not gone to plan. Replacing the steady profits of yesteryear with cashflow from servicing boilers, selling Hive thermostats and supplying tradespeople via its Local Heroes website appears more of a pipe dream than a strategy. The connected-home division reported an £85m loss last year on revenues of £67m.
Times 21st July 2019 read more »