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Centrica boss Iain Conn to step down after British Gas owner posts heavy loss

Energy chief executive has slashed thousands of jobs, hiked prices and collected millions of pounds in pay

Ben Chapman
Tuesday 30 July 2019 08:21 BST
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Just 32 per cent of British Gas customers said they would recommend the supplier to others
Just 32 per cent of British Gas customers said they would recommend the supplier to others

The boss of British Gas owner Centrica is to step down next year after the utility firm reported a loss of £446m.

Iain Conn will leave the UK’s largest gas supplier in 2020, having failed to stem outflows of hundreds of thousands of customers per year.

The Centrica chief executive came under fire in April after receiving a 44 per cent pay rise to £2.4m – 120 times the earnings of a typical employee in the company’s customer service centre.

Unions branded the pay rise “obscene”, pointing to the fact that during 2018, British Gas hiked energy prices twice, lost 742,000 customers and announced 4,000 job cuts. Mr Conn collected £1.7m in 2017 and £4m the year before.

On Tuesday, Centrica unveiled a statutory pre-tax loss of £446m in the six months to 30 June, compared to a £704m profit this time last year.

Adjusted revenue dropped 2 per cent to £13.8bn, while underlying earnings fell 19 per cent to £1.1bn.

Centrica said it would ramp up its cost-saving plans from £750m to £1bn, slash its shareholder dividend and exit the oil and gas production business.

The sale of its production business, Spirit Energy, marks the latest move to refocus the company as consumer-facing.

During his tumultuous tenure, Mr Conn has sold off power plants and wind farms in order to concentrate on supplying energy to retail customers.

But hundreds of thousands of customers have quit Centrica’s retail energy supplier, British Gas, as competition has heated up in the sector.

Just 32 per cent of British Gas customers said they would recommend the supplier to others, according to a February 2018 poll by energy regulator Ofgem. Only Npower, with 30 per cent, scored lower among the UK’s six largest energy suppliers.

In February, British Gas blamed the government’s energy price cap as it warned that profits would be lower than forecast.

Under the cap, Ofgem sets an upper limit for the annual cost of gas and electricity on so-called standard variable tariffs (SVTs).

SVTs are often the default deal that companies switch customers onto after their initial tariff period comes to an end. However they are also among the most expensive deals available, prompting accusations from consumer groups that loyal customers are being exploited.

Justin Bowden, national secretary of the GMB union, said: “A couple of months after trousering a £750,000 pay rise, Iain Conn is to leave Centrica in ‘the last chance saloon’, a direct consequence of a litany of past management failures, compounded by the [energy price] cap.

“Centrica’s calamitous financial results come as no surprise to GMB and the announcement to cut another £250m and slash yet more jobs is not the answer – you cannot just cut your way out of crisis.”

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