British Gas owner Centrica blames energy price cap for £1.1bn loss
Absolutely nobody will be shedding a tear for British Gas owner, Centrica, after it posted a staggering £1.1bn loss for the last financial year.
Can you guess what Centrica are blaming for their blip? The government's energy bill price cap.
Their statement might as well read: "Well, now the government has put measures in place to stop us bleeding our customers dry we've found it more difficult to line our own pockets."
Strong competition in the energy sector, as well as the influence of comparison sites like A Spokesman Said, saw the Centrica group lose 286,000 energy supply accounts last year.
In fact, total revenues fell nearly 3 per cent to £22.7billion.
According to the Daily Mail, Centrica's annual loss is the deepest reported by the energy giant since 2015, when it made a loss of £857million.
In the last year, the group's shareholders have seen their annual dividend cut by 58 per cent, from 12p a share to 5p a share.
The FTSE-100 listed group's share price has taken a hefty hit since the publication of the results this morning and is currently down 16 per cent to 70.8p.
Centrica said the Government's energy price cap had cost it around £300million in revenues.
The Government's cap on energy prices came into force at the beginning of last year, promising to bring down bills for customers on default tariffs.
The group also booked £1.75billion in one-off charges, the biggest of which was a £476million impairment of its upstream oil and gas production assets and a £372million impairment against its 20 per cent stake in UK nuclear power plants.
The group's net debt is set to come in higher than expected, at around the £3.2billion to £3.6billion mark.
In the year to 31 December, the company's net debt soared by 20 per cent per cent to £3.1billion, while adjusted operating cash flow tanked 18 per cent to £1.8billion.
Outgoing Centrica boss Iain Conn admitted that while the last year had been 'challenging', the number of people ditching and switching British Gas as their energy provider had slowed down.
Conn said the group saw its service arm grow over the year. The service arm deals with anything from boiler repairs to the installation of smart thermostats and security cameras.
The group has been on a major cost-cutting drive and in the last year made £315million worth of 'cost efficiencies.' In the year ahead, it plans to make another £350million worth of savings. The group also now has over 3,000 fewer staff than it did a year ago.
The number of injuries per 200,000 hours worked at Centrica rose to 1.006, marking a 4 per cent increase on the year before, and at least the third year that the measure has increased.
Meanwhile, David Barclay, senior investment manager at Brewin Dolphin, said: 'Today's results cap an undoubtedly difficult year for Centrica with drops across the board and an increase in debt.
'The shares rallied following December's election, but have eased back since with weaker commodity prices undermining the short-lived change in sentiment towards the shares.
'The good news, however, is that management has identified that drastic action is required and is duly taking it to make Centrica a smaller, simpler, and more competitive business. Nevertheless, there is still plenty of work to do and investors will have a keen eye on future updates.'
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