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British Gas owner bolsters net zero goals as it posts another annual loss

Written by on 25/02/2021

Centrica, the parent company of British Gas, has announced its net zero emissions target has been brought forward by five years to 2045, while revealing a financial loss for 2020.

Britain’s largest energy supplier reported a loss from continuing operations of £362m – down from £783m the previous year – as it continued a restructuring aimed at bolstering shareholder value that will eventually result in 5,000 job losses.

Centrica highlighted pressures from the COVID-19 pandemic including weaker commodity costs and warmer weather.

British Gas
Image: The cap on so-called default tariffs, aimed at preventing rip-off bills, has had a deep impact on profitability

It revealed that British Gas – the market leader for household gas and electricity – continued to bleed customers with 160,000 net fewer accounts, equating to 2% of its total.

Earnings for the division fell by 35% to £80m during the period – dragging on group profitability.

They have been particularly hurt by the imposition of the energy price cap and British Gas was quick to confirm it would pass on the recently announced increase in the default tariff due to be implemented on April 1.

Centrica said that as a result of the current trading environment it would not propose a full-year dividend for 2020 but would “recommence dividends to shareholders when it is prudent to do so”.

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The group also warned over its outlook amid continuing pressure on demand for energy because of pandemic restrictions and hits to household spending power which, it said, could result in rising customer payment defaults.

It did offer some more encouraging news – on its climate targets.

The company said that in addition to bringing forward its commitment to have net zero greenhouse gas emissions to 2045, it would also help its customers be net zero by 2050.

More details were promised later in the year.

Shares fell more than 6% in early trading.

Centrica said that it had shed 3,000 jobs during 2020 under its efficiency drive and 1,000 more were to go this year.

A further 1,000 roles were to be lost at its North American business Direct Energy, which it has sold for £2.7bn under plans that are also expected to result in a divestment of its UK nuclear power interests.

Chief executive Chris O’Shea said: “We have made a good start to the turnaround of Centrica, with the sale of Direct Energy now complete and our significant group restructure on track.

“However, our journey to transform has only just started.

“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.”

 Sky News

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