Energy price falls prompt British Gas owner to slash dividend
CENTRICA, Britain’s largest utility company, yesterday slashed its annual dividend by 21 percent and forecast further cuts on the back of declining energy prices.
New chief executive Ian Conn, appointed in January, also announced a strategic review to be concluded in time for the company’s interim results in July.
Conn said: “2014 was a very difficult year for Centrica and the recent fall in oil and gas prices creates further challenge. We are cutting investment and costs in response.” Conn is formerly BP’s head of downstream activities.
Centrica will cut its 2015-2016 exploration and production by £400m, after the company reported a 25 per cent fall in operating profit in 2014 as lower energy prices held back earnings at both its supply and production units.
The British Gas owner cut its dividend to 13.5p a share, from 17p, and announced future payouts would be slashed by 30 per cent.
James Abbott, trader at Accendo Markets, told City A.M.: “At the opening bell, traders couldn’t get rid of Centrica shares quick enough. An embarrassing 35 per cent slump in full-year operating profits, along with the slashed dividend, saw the shares become the FTSE’s worst performer.”