Centrica to Cut 4,000 Jobs; Sell Stake in UK Nuclear Business -- Update
(Updates with job cuts, potential disposal and share price.)
By Maryam Cockar
British Gas-owner Centrica PLC (CNA.LN) said Thursday that it will cut 4,000 jobs and that it intends to sell its U.K. nuclear assets after reporting that its 2017 pretax profit fell sharply.
The utility company has increased its new cost-efficiency program by 500 million pounds ($694.9 million) to GBP1.25 billion a year by 2020 after the initial GBP750 million program was delivered three years early.
The new program will involve reducing headcount by 4,000 by 2020, with around 1,000 additional jobs expected to be created in the following divisions: connected home, distributed energy and power, and energy marketing and trading.
Centrica plans to sell its 20% holding in Electricite de France SA's (EDF.FR) U.K. nuclear business by 2020, subject to "ensuring alignment with our partner and being sensitive to government interests," it said.
Centrica's pretax profit fell sharply in 2017, a year in which the utility said it incurred several charges, lost some customers, and had a poor performance at its North America unit. The company also had a tough comparable as its 2016 profit figure was boosted by a tax credit.
Centrica said that pretax profit in 2017 was GBP142 million compared with GBP2.19 billion a year earlier. Stripping out exceptional items, adjusted pretax profit declined to GBP901 million from GBP1.17 billion, it said.
Centrica said that revenue rose to GBP28.02 billion from GBP27.1 billion a year earlier.
The FTSE 100-listed company maintained its final dividend at 8.40 pence a share, bringing the full-year dividend to 12 pence.
"The combination of political and regulatory intervention in the U.K. energy market, concerns over the loss of energy customers in the U.K., and the performance issue in North America have created material uncertainty around Centrica and, although we delivered on our financial targets for the year, this resulted in a very poor shareholder experience. We regret this deeply, and I am determined to restore shareholder value and confidence," Chief Executive Iain Conn said.
Mr. Conn said Centrica is committed to delivering attractive returns and growth over the medium term.
Centrica will buy its 4% senior notes due in 2023 and up to $250 million of its 5.375% senior notes due in 2043 to improve the efficiency of its balance sheet, it said.
At 0949 GMT, shares in Centrica were up 4.1% at 137.55 pence.
Write to Maryam Cockar at firstname.lastname@example.org
(END) Dow Jones Newswires
February 22, 2018 05:10 ET (10:10 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.