Chris O'Shea, Group Chief Executive “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. I am truly grateful for their efforts. 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. The sale of Direct Energy is a fundamental step towards this, and although we have a lot more to do, we have the people, the brands and the market positions to deliver a successful turnaround.”
Resilient first half performance
- Resilient performance overall against the backdrop of Covid-19. Focus has been on protecting the business and keeping customers warm, safe and supplied with energy.
- Good customer service levels maintained and continued high customer retention. Total customers down 0.8% since the start of the year with a number of sales channels unavailable in Q2.
- Adjusted operating profit down 14% or £56m compared to H1 2019. Negative impacts of Covid-19, low commodity prices and warm weather largely offset by mitigating actions and improved underlying performance.
- Adjusted EPS up slightly to 2.5p, reflecting a reduction in the Group adjusted effective tax rate from 47% to 35% with a shift in profit mix away from highly taxed E&P activities.
- Net exceptional charge of £1,036m, including restructuring costs of £251m, and impairments of E&P and power assets totalling £785m which reflect a reduction in commodity price forecasts and nuclear plant availability issues. Statutory operating loss of £135m.
- Robust cash flows and liquidity. Net debt down £0.4bn since the start of the year to £2.8bn, reflecting working capital inflows and prompt actions taken to reduce cash expenditure in response to Covid-19.
- No interim dividend declared.
-No specific full year guidance provided given continuing Covid-19 related uncertainties.
- Prompt actions already taken and the Group’s cash flow flexibility leave us well positioned to navigate current and future uncertainties.
Focus on balance sheet and quality of earnings
- Centrica remains a customer-focused energy services and solutions company, helping customers transition to a low carbon future.
- Accelerated focus on simplifying and modernising the Group, to become more sustainable.
- Agreement to sell Direct Energy to NRG Energy for $3.625bn (£2.85bn) further simplifies the Group, allows increased focus on core UK and Ireland activities and strengthens the Group’s balance sheet.
- Significant restructure underway, putting the customer at the heart of everything we do and accelerating planned cost savings.
- Spirit Energy E&P divestment process to restart once commodity and financial markets have settled.
- Nuclear divestment process currently paused.