Centrica Maintains Outlook as Customer Defections Slow
(Bloomberg) -- Centrica Plc kept its full-year outlook and said the rate of customers leaving the U.K.’s biggest energy supplier is slowing. Shares rose the most since September.
- The utility still sees adjusted operating cash flow for the full year of between 1.8 billion pounds ($1.38 billion) and 2 billion pounds, it said in a trading statement. Centrica lost 234,000 energy accounts in the four months through April, compared with 372,000 in the four months through November.
- The government-imposed cap on consumer energy bills hit profits in the first quarter to the tune of 70 million pounds this year. Britain’s energy market regulator boosted the cap on how much utilities can charge customers for electricity and natural gas to 1,254 pounds in February.
- The “Big Six” utilities in the U.K. have come under pressure from smaller, cheaper, and more nimble market entrants who have taken significant market share from them.
- Centrica said in February that it planned 750 million pounds of asset sales and cost cutting in 2019.
- Centrica gained as much as 4.3 percent, the most since Sept. 6. Shares are still down 30% this year, the worst performance on the 29-member STOXX 600 Utilities index.
- “External factors have presented challenges for Centrica during the first four months of 2019, in the form of the default tariff cap, warm weather, and falling gas prices. We have also experienced extensions to nuclear outages,” Chief Executive Officer Iain Conn says in the statement.
- “We continue to focus on those things we can control and as a result we expect to achieve our 2019 cash flow and net debt targets, while we are making further progress on cost efficiency delivery and on demonstrating margin capture capability,”
- Utility plans non-core divestments of 500 million pounds.
Centrica plans to cut between 1,500 to 2,000 jobs.
- Full year net debt expected to be between 3 billion pounds to 3.5 billion pounds.
- READ: British Nightmare for Utilities Goes From Bad to Worse
- READ: Centrica Credit Wobbles Under Another Disappointing Outlook
- Link to statement.
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