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British Gas owner Centrica sells US supplier in £2.9bn deal

Energy company seeks to bolster earnings as profits drop 14 per cent and 226,000 UK customers leave

Kate Ng
Friday 24 July 2020 16:37 BST
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(REUTERS)

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Centrica, which owns British Gas, Scottish Gas and Bord Gais Energy, is selling its North American energy supply business for $3.6bn (£2.85bn) to boost its earnings after reporting a slump in profits due to the coronavirus pandemic.

The sale of its subsidiary Direct Energy to US integrated power company NRG Energy was announced alongside the company’s half-year earnings, where it also reported low commodity prices.

Money from the sale will be used to reduce net debt and contribute to Centrica’s pension schemes, said the company, and will bring its focus back on its home markets in the UK and Ireland.

But Centrica is still seeking to balance its books by cutting 5,000 jobs, following a 14 per cent drop in profits and the loss of 226,000 UK home energy customers in the first half of 2020 – and the loss of more than £1bn in 2019.

Centrica group chief executive Chris O’Shea said in a statement: “Centrica delivered a resilient performance against the unprecedented backdrop of the Covid-19 crisis during the first half of the year. That is due to the response of colleagues across the group to keep our customers warm, safe and supplied with energy and services during the pandemic.

“Our mission now is to turn around the company by putting customers at the heart of everything we do and creating a simpler, leaner, more modern and more sustainable company.”

Unions have accused Centrica of telling staff to accept new conditions, which include longer hours, no overtime pay and reduced benefits, or risk losing their jobs.

Justin Bowden, GMB Union national secretary, said: “Today’s figures are a stark indictment of the governance of this once great British company.

“Every time a crisis looms, Centrica’s directors’ answer is to cut thousands more jobs. Today’s financial results prove the strategy isn’t working.

“It wasn’t loyal engineers, call centre workers or admin staff who were in charge when Centrica lost 3 million customers in the last five years.

“Now they’re being told they have to carry the can again and they’re not prepared to do that any more.”

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