British Gas owner Centrica buffeted by Beast from the East with busiest week ever for central heating boiler breakdowns
British Gas owner Centrica said in a trading update today that its services division had been under pressure due to the severe weather earlier this year with a record number of boiler breakdowns to fix.
It said that while the unexpectedly cold weather had increased energy demand, the Beast from the East had buffeted its UK services, with “an exceptionally high number of central heating boiler breakdowns” during the bad weather in February and March.
Centrica said it fixed 145,000 breakdowns in one week – its busiest seven-day period ever, and more than twice the weekly number, while the trouble also brought with it a rise in cold weather.
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Energy supply accounts fell by 110,000 in the UK reflecting “market switching trends”, and by 28,000 in North America.
Despite that, Centrica said that overall financial performance had been good in the year to date.
Iain Conn, Centrica’s chief executive said:
2018 has begun well and overall financial performance in the year to date has been good, despite high competitive intensity in all our markets. Our customers continue to see new products and propositions and stable service levels, other than in UK home services which was impacted by extreme weather. We are making good progress against our cost efficiency targets.
While the outcome of regulations to impose a temporary cap on all default energy tariffs in the UK remains uncertain, we continue to participate actively in the consultation process. Our focus remains on performance delivery and financial discipline and we remain on track to achieve our 2018 group targets.
The company’s full-year dividend is expected to be 12p per share, and Centrica is expecting to deliver £200m of efficiency savings as part of its increased £1.25bn per year cost efficiency programme.
Like-for-like direct headcount is expected to be reduced by around 1,000 during this year, after Centrica said in February that it intended to cut a further 4,000 jobs by 2020, citing the price cap and competition.
Centrica is one of many businesses holding AGMs this week, and is under pressure over its lack of gender diversity at board level, while another, Cineworld, may be forced to justify a jump in executive pay. Shell and Astrazeneca are being questioned over large bonuses awarded to their chief executives.
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