Centrica raises cost savings target, to cut 4,000 jobs by 2020

Centrica raises cost savings target, to cut 4,000 jobs by 2020

(Reuters) – Britain’s largest energy supplier Centrica, which issued a profit warning in November, raised its cost savings target by 500 million pounds and said it would cut about 4,000 jobs by 2020.

The company, which also reported a 17.4 percent fall in full-year operating profit, said the additional savings would take the total targeted cost savings to 1.25 billion pounds per annum by 2020.

The utility, which owns household energy supplier British Gas, shocked the market in November saying its full-year adjusted earnings per share would be around 12.5 pence, against forecasts of 15 pence, largely due to its North American and British businesses being hit by tough competition and warmer-than-expected weather cutting demand.

The company said it expects to reduce about 1,000 jobs on a like-for-like basis in 2018 and save about 200 million pounds.

Centrica expects to generate adjusted operating cash flow between 2.1 billion pounds and 2.3 billion pounds in 2018. Adjusted operating cash flow fell about 23 percent to 2.1 billion pounds last year.

The company’s adjusted operating profit fell to 1.25 billion pounds in the year ended Dec. 31, from 1.5 billion pounds a year ago.

Total consumer energy supply customer accounts fell 6.6 percent to 24.4 million, while in the business segment it fell 5.9 percent to 1.3 million. Britain’s big energy suppliers have been under pressure from smaller rivals offering cheaper deals in the consumer market.

Reporting by Arathy S Nair in Bengaluru; Editing by Sunil Nair

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