British Gas’ eleven million consumers will face no interruption to gas supply after Vladimir Putin unleashed his duplicitous attack today on democratic Ukraine, Centrica’s CEO implied this morning.
As gas prices surged 40% in European trades, Chris O’Shea delivered his assurance, alongside record 2021 results for the parent of the nation’s biggest supplier. But he had no steer on what effect Russia’s aggression would have on bills for UK homes.
Centrica posted £767 million in pre-tax profit for full year 2021, reversing 2020’s loss of £577 million. The firm’s oil and gas exploration division advanced on record wholesale prices, reviving calls for a windfall tax.
Speaking to analysts, the CEO opined: “I don’t think it will help anyone to speculate what this [Ukraine and gas shortages] might mean [regarding prices]. “We have to wait and see how this might unfold, it is absolutely unprecedented, we will have to wait and see.”
O’Shea is passing on his £1.1 million bonus this year, in recognition of skyrocketing bills biting deeper from this April.
Centrica’s profits were buoyed with £2.3 billion from the sale of its Direct Energy division. Other sell-offs in a programme of sustained streamlining included £800 m for an exploration field of Spirit Energy, Centrica’s 69% subsidiary.
O’Shea replaced Iain Conn two years ago, immediately axing 5,000 jobs. He has since strived to simplify the fossils-based retailer’s bureaucracy. A retreat from exploration has long been signalled.
British Gas’ assimilation after June of 500,000 new customers of 29 now bankrupt suppliers, plus another 176,000 in January, have resulted in poor ratings, O’Shea admitted.
Fire and re-hire
“Customer service levels were disappointing, particularly in our British Gas Services & Solutions business”, O’Shea confessed. “We let too many customers down. Improving this will remain a major area of focus in 2022”.
British Gas’s strategy of ‘fire and re-hire’ practised on frontline technicians incurred trade union ire last year. The strategy helped trim £100 million from Centrica’s operating costs last year, today’s figures reveal.
Earnings per share advanced 46% to 4.1 pence, and free cash flow from operations rose 71% to £1.2 billion.
By lunchtime Centrica’s shares had slipped nearly 3%, valuing the combine at £ 4.445 billion. The slump was broadly in line with the 3% drop in the FTSE All-Share. Asian markets had suffered similar falls overnight.
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