British Gas owner Centrica saw its adjusted operating profit fall 31% in 2020, a record low according to its preliminary results.
This brought it down to £447 million for the year, with adjusted basic earnings per share (EPS) down 35% to 2.8p as well. According to Centrica, this was driven by the negative impacts of COVID-19 together with warmer weather and low commodity prices.
Operating loss was £362 million in 2020, a drop compared to its £783 million loss the previous year, bringing statutory net cash flow from operating activities down 1% to £957 million.
The total exceptional charges to the Group’s operating profit was £1,593 million, including restructuring and pension strain costs of £274 million and impairments of £1,319 million.
Despite the losses, the company pointed to things turning around as it works to restructure the company, including the completion of the sale of its US arm Direct Energy in January 2021, which will allow it to focus on its core UK and Ireland activities over the coming year. Additionally, customer numbers remained broadly unchanged in the second half of 2020, as opposed to a 2% drop in H1.
"We started a major transformation of the Company during 2020,” Chris O'Shea, Group chief executive said. “Against the continuing uncertain backdrop caused by the COVID-19 crisis, I am truly grateful for the efforts of all my colleagues, as we kept our customers warm, safe and supplied with energy and services and protected the business.”
The results follow a consistent period of loss from the Big Six provider, with profits falling 14% in the first half of 2020 alone. The company’s 2018 financial results sent its share price tumbling to a 20 year low after it confirmed that the incoming price cap would create challenges for the company. The previous annual financial statement led to the company cutting over 4,000 jobs when it was released in February 2018 due to the company’s “weak” performance.
In June 2020, it announced its plans to become a simpler, leaner business in order to turn the tide of loss. The move saw 5,000 redundancies at the company, and contract changes for many employees.
These changes have been met with widespread protest and workers going on strike in action against the so called ‘fire and rehire’ plans.
“Our journey to transform has only just started, as we seek to restore shareholder value by improving customer experience, retention and employee engagement, while maintaining a strong balance sheet,” continued O’Shea. “It won’t be easy, but I am confident we have the people, the brands and the market positions to deliver a successful turnaround in the coming years."