UK Centrica Battles Through 2020

UK dominant retailer Centrica said January 14 its operational and financial performance had been "resilient" in the second half of 2020, as it kept a "tight focus on cash generation and expenditure against the backdrop of Covid-19." 

It was the first full reporting period for the CEO Chris O'Shea, who replaced Iain Conn in March and he expects the results, out February 25, to beat expectations.

However, the return of tighter Covid-19 restrictions in the UK and Ireland are expected to put continued pressure on business energy demand and to limit services workload.

It said the significant restructuring plan announced in June, involving asset sales and a swathe of redundancies, remains on track, and trading and optimisation performance continued to be strong, in particular in the LNG business. The company's co-head of energy trading Jonathan Westby joined Japanese energy trading house Jera in December and Centrica declined to tell NGW whether he would be replaced and on reports that the LNG business was up for sale.

Centrica finished the year with 6.9mn UK energy supply customers and 3.6mn UK services customers, both broadly unchanged since the half year. 

UK business electricity demand was negatively impacted by around 15% in H2 2020 compared to around 30% in Q2 2020. Group net debt is expected to be about £2.8bn, a reduction of over 10% in the year. This is before including net proceeds of £2.7bn from the sale of Direct Energy which closed January 5. Most of that will be used to reduce net debt and make a contribution to the Group’s defined benefit pension schemes.