Centrica, the owner of British Gas, has said its chief executive, Iain Conn, is to step down next year, as it slashed its dividend after a first-half loss.
Conn will remain with the company until at least the 2020 annual meeting. He had come under pressure to step down after a row over his £2.4m pay package in April. His pay went up by 44% despite a difficult year that included higher household bills and plans for 4,000 job cuts. Between 1,500 and 2,000 jobs will go this year.
Charles Berry, the chairman, said: “Iain has led the strategic repositioning of Centrica since 2015 and has been the driving force behind our plan to turn Centrica into a sustainable business.”
The company posted a pretax loss of £569m for the six months to 30 June compared with a profit of £415m last year, and it slashed its interim dividend by 58% to 1.5p a share. It said the full-year dividend total will also be cut by 58%, from 12p to 5p a share.
Centrica blamed an “exceptionally challenging” environment in the first half of 2019, including the government price cap on standard energy tariffs and additional pension contributions.
The group took a pretax charge of £346m in the first half. This included £257m of restructuring costs, £64m one-off pension costs and asset writedowns of nearly £90m, partly due to the fall in near-term gas prices.
It said the outlook was more positive for the second half of the year and this would continue into 2020. It also stuck to its cashflow and debt targets for this year.
Centrica said it would exit oil and gas production to focus on customers, and expects to sell its last major asset, its stake in Spirit Energy, by the end of 2020.
It lost 178,000 UK home energy supply accounts in the first half, and said it would revamp its home business including further cost cuts.