Energy giant Centrica’s Chief Executive Iain Conn is to step down from his post and retire from the company’s board next year after an “exceptionally challenging” period.
He will remain with the owner of British Gas until at least the annual general meeting in 2020.
The announcement comes as Centrica reported a pre-tax loss of £446 million in the first six months of 2019 compared with profits of £704 million during the same period last year.
The energy giant is also cutting its dividend and plans to leave oil and gas production, along with its intended exit from nuclear generation, to focus on the transition towards a lower carbon future.
Centrica’s profits at its consumer unit, which includes British Gas, was down 44% to £240 million, “largely reflecting the impact of the UK residential energy supply default tariff cap”, including a one-off £70 million impact in the first quarter due to Ofgem’s revision to the methodology calculating supplier wholesale costs during the transitional period.
Profits at its business unit also fell 89% to £11 million, partly due to the warm weather and extensions to outages at the Dungeness B and Hunterston B nuclear power stations and its exploration and production unit profits were down 42% to £148 million.
Mr Conn said: “Centrica faced an exceptionally challenging environment in the first half of 2019, which impacted earnings and cash flows. We have also regrettably had to make the decision to rebase the dividend due to our changed circumstances, including the UK energy price cap and increased demands on our cash flows, including additional pension contributions.”
He added: “The board want me to implement the announcements we’ve made today and begin their material progress, including the divestment of Spirit Energy, pursuing the divestment of nuclear, the driving of performance, the rebasing of some of our business units and very importantly, work with the chairman and the board to secure an orderly succession.
“I’m very proud of what Centrica’s team has achieved in turning this company from one which was relatively ill-suited to changes taking place in the energy system, to the point where we are becoming in tune with it and are going to become fit for it as a customer-facing company in energy services and solutions.”
Centrica is also working with Ford to deliver a dedicated home charging installation service and electric vehicle tariffs from British Gas and Bord Gáis Energy,
Charles Berry, Chairman of Centrica said: “Iain has led the strategic repositioning of Centrica since 2015 and has been the driving force behind our plan to turn Centrica into a sustainable business that is built around delivering clean, affordable energy and high-quality services and solutions for our customers, and to respond to the significant global challenge of moving to a lower carbon energy future.
“I would like to take this opportunity to thank Iain for his hard work and passion and for his ongoing commitment to transforming Centrica into a business with a stronger foundation for sustainable growth.”
ELN visited Cornwall earlier this year to find out about Centrica’s £19 million Local Energy Market trial and what it means for the low carbon transition.
