Iain Conn is preparing to unveil plans to slash costs at British Gas, raising fears of more job losses as he fights to shore up Centrica’s dividend. The energy group’s chief executive is under pressure from investors after stunning the City with a profit warning in November that left analysts questioning the credibility of the company’s management. Centrica is expected to report on Thursday that adjusted operating profits fell to £1.3 billion in 2017, from £1.5 billion the year before. Profits from its core British Gas household supply business also are likely to have fallen, analysts believe, with last year’s 12.5 per cent electricity price rise failing to offset the impact of mild weather and the loss of more than a million customers. John Musk, an analyst at RBC Capital Markets, said that the dividend would be maintained for now, but argued that it did not appear sustainable. “I don’t think Iain Conn can cut it again. They will maintain it and hope for an improvement in the future, though we think that is putting off the inevitable,” he said. Mr Musk said that there was “emerging debate in the market” over the potential for Centrica to sell off its North American business and nuclear and oil stakes. He did not expect Mr Conn to take such radical action. “They need to be forced into doing something like that, whether in an M&A situation or by activist shareholders,” he said.
Times 19th Feb 2018 read more »
The staid world of household energy supply might not seem the most obvious new field for companies steeped in the buccaneering spirit of oil and gas exploration. Yet, recent moves by Royal Dutch Shell and Total into the consumer power market have sent an important signal about the long-term direction of Europe’s two largest energy groups. Shell is close to completing its acquisition of First Utility, the UK electricity and gas supplier, which it agreed to buy last December in a deal that will pit it against larger power suppliers such as Centrica and SSE. Total, meanwhile, is in the early stages of building a retail energy business in its domestic French market to challenge incumbents EDF and Engie. Both companies say they are laying foundations for further expansion into the electricity supply chain, as a global energy market dominated for decades by oil begins to give way to a lower-carbon system, with bigger roles for gas and renewable power.
FT 18th Feb 2018 read more »
A green electricity supplier has won the right to supply thousands of Essex households with electricity for the first time, Essex County Council announced last week. Green supplier So Energy won the auction to become the provider for the county’s annual Essex Energy Switch, which sees thousands of residents band together to collectively switch energy provider with the aim of securing a cheaper deal.
Business Green 19th Feb 2018 read more »