Leaves board next year

Centrica CEO stepping down after announcing half-year loss

Scottish Gas

Centrica reported a half-year loss

Centrica chief executive Iain Conn is stepping down after the owner of British and Scottish Gas revealed £446 million half-year operating loss.

Mr Conn has led the company since January 2015 and will leave the board next year. A statement said the environment had been “extremely challenging” and the financial performance had been weak.

The company also plans to sell its oil and gas production operations.

Mr Conn said the slump in the company’s share price was not behind his decision to leave.

Instead he said: “This is a natural time to hand over to a successor,” he said.

Shareholder and consumer groups were critical of his enormous pay package during the company’s difficulties. Her received £2.4m last year compared to £1.7m in 2017. 

He argued that the country needs a more “pro-business government”, believing the cap on energy tariffs was a mistake and has just “delayed” the issues in the market. The move cost Centrica £300m in the first-half of this year alone, he said.

He also believes that Prime Minister Johnson will be more pro-business.

The company saw an overall growth in consumer customer accounts of 314,000, although it lost 38,000 UK home accounts.

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.”

Market Reaction

David Barclay, head of office at Brewin Dolphin Aberdeen, said: “The City was prepared for a fairly grim set of results from Centrica and they’ve duly arrived. The dividend has been cut significantly and the chief executive has stepped down. Revenues and profits are lower, while debt has increased and Centrica plans to exit its oil and gas business.

“The company has undoubtedly faced a number of challenges and has had to make some difficult decisions to adjust, which is commendable. Nevertheless, the hope will be that Centrica can emerge from this tough period a stronger, simpler, and more competitive business than it is now.”  

 GMB Scotland Organiser Hazel Nolan said: “These results are another brutal chapter in the disastrous leadership of Iain Conn – he should go now and not later. 

“It says everything that despite the massive losses, the share price has actually risen on the news of his departure next year. 

“His plan to cut and gut his way out of this chaotic decline has utterly failed; its a vandalisation of this once great British institution.

“This isn’t just evidenced in the loss of over 4,000 jobs and 750,000 customers, but in the sub-contract of core workers and the offshore of call centre services. 

“It doesn’t need to be this way. Gas is a sure thing as part of our energy mix – both for Scotland and the rest of the UK – the next generation and this business needs new leadership with a fresh vision and competent plan for the future. 

“There is hope for the future with the right leadership and at the heart of this must be a commitment to invest in the direct labour force. 

“The staff are the lifeblood of this once great business and are vital to the sustainability and future growth of the service.” 

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