Shares in British Gas owner Centrica (CNA.L) tumbled 11% after it announced its chief executive will step down next year, and accounts showed the company slid to a £446m loss in the first half of the year.
It comes after it was confirmed Conn received a controversial 44% pay rise earlier this year, despite Britain’s biggest energy supplier losing hundreds of thousands of customers and planning to make heavy spending cuts.
A union leader called the results “calamitous” and said he feared for workers’ jobs with the company “haemorrhaging customers,” urging the firm not to axe more staff.
The company confirmed Iain Conn will leave his post after the 2020 annual general meeting in its latest update to shareholders.
The company announced it will look for £1bn of savings as part of a huge cost-cutting programme, up from a previously estimated £750m.
The company’s accounts show it recorded a loss before tax of £446m in the six months to 30 June, a significant deterioration from a £704m profit over the same period a year earlier.
It said its adjusted revenue was down 2% to £13.8bn, while its underlying earnings fell 19% to £1.08bn.
Centrica also confirmed it will abandon oil and gas production.
A “challenging environment” was blamed as it more than halved its divided to 1.5p a share, while its expected divided for the full-year was rebased at 5p a share.
Centrica had warned in February that an energy price cap introduced by Theresa May would hit its profits this year, including a one-off hit of around £70m in the first quarter.
It even said it would take legal action over the way the cap was calculated as it was initially set around 6% lower than British Gas’ standard variable tariff.
But Ofgem, the energy regulator, then raised the cap by 10% on 1 April, with British Gas and other suppliers raising it by the same amount.
British Gas lost 742,000 customer accounts in 2018, increasingly losing out to smaller and newer entrants to the market competing on price.
Justin Bowden, national secretary of the GMB union, called the results “calamitous,” but no surprise to the union that the company was “haemorrhaging customers.”
“The announcement to cut another £250m and slash yet more jobs is not the answer - you cannot just cut your way out of crisis,” he said.
“British Gas is a household name with the competitive advantage that that should bring. There is a brilliant workforce who are desperate for a future and are hurting.
“More of the same - more job cuts on top of the thousands already gone and going - are panic measures not a credible plan for recovery.”