Centrica drops final dividend as underlying profits slide

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British Gas owner Centrica PLC (LON:CNA) scrapped its final dividend after a raft of impairments meant heavy losses for a second year.

The gas supplier said it can give no guidance for the current year either due to the trading uncertainty.

Underlying profits fell by 23% to GBP1.64bn in the year to end-December, with a 31% fall in its ongoing businesses to GBP447mln.

Ongoing numbers exclude Direct Energy, which was sold in January for GBP2.7bn, and reflects the impact of COVID-19, warmer weather and low commodity prices, the group said.

Exceptional charges of GBP1.59bn including redundancy and pension costs of GBP274mln, pushed the group into a pre-tax loss of GBP577mln (GBP1.03bn loss).

British Gas Energy shed another 164,000 customers or 2%, though nearly all the net losses came in the first half of the year. The business now has 6.9mln customers.

Centrica added that a restructuring of the group that has included 5,000 job losses since the start of 2020 is on track but more change is likely.

Chris O’Shea, chief executive, said: “We have made a good start to the turnaround of Centrica, with the sale of Direct Energy now complete and our significant Group restructure on track. However, our journey to transform has only just started.”

Net debt at the year was GBP2.8bn, since when it has received GBP2.7bn for the Direct Energy sale.

Centrica said it will use part of these proceeds to redeem EUR750mln of hybrid debt.

The group also unveiled plans to help it become carbon net-zero by 2045 with its long-term strategy to be set out in the second half of 2021.

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