British Gas owner Centrica has plunged to its deepest full-year loss since 2015, blaming falling gas market prices and the government’s energy price cap.
Centrica’s outgoing chief executive, Iain Conn, reported a pre-tax loss of £849m for last year, down sharply from a profit of £987m the year before. The performance was worse than expected in the City and shares in the FTSE 100 group tumbled 15% to 72p.
The loss is the deepest reported by the energy firm since 2015, when it made a loss of £857m. That followed a loss of over £1bn in 2014, which led Centrica to cut its dividend for the first time since was created in 1997.
Conn said the government’s energy price cap cost the company about £300m last year, and blamed tumbling gas market prices and problems at the UK’s nuclear power reactors for the worse than expected financial results.
The company reported an impairment charge of £476m against its North Sea oil and gas business, Spirit Energy, and a £372m impairment on its stake in the Dungeness B and Hunterston B nuclear plants which have suffered outages over the past year. The company reported an exceptional cost of £356m for restructuring the business which has included redundancies.
Conn is preparing to leave the company later this year after a torrid five-year tenure marked by the company’s sliding share price, and heavy customer losses from British Gas. Centrica has yet to announce a replacement for Conn.
The company is also temporarily without a permanent chairman after Charles Berry began a leave of absence earlier this week due to a medical condition. Centrica said it expects Berry to return to his duties shortly.
Conn said the second half of last year was better than the first, “demonstrating momentum as we enter 2020”.
British Gas lost 286,000 customers from its energy supply business last year, a slowdown in losses compared with previous years, and gained 78,000 customers for “energy services” such as boiler repairs. In total, its customer accounts rose by 3% to 722,000.
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