Centrica has agreed to sell its North American subsidiary Direct Energy as part of a move to focus on the company’s core UK and Ireland activities.
The announcement to sell the retailer to US-based NRG Energy for $3.625 billion (£2.85 billion) was made this morning (24 July) as part of the company’s results for the six months to the end of June.
Centrica says the transaction will enable it to further simplify its business which, along with the recently announced restructure, will create a leaner company with a focus on its core markets of the UK and Ireland.
The results are the first presided over by Chris O’Shea as group chief executive. O’Shea recently announced 5,000 jobs, mainly managerial roles, will be axed as part of the restructure.
In a conference call with journalists this morning, O’Shea said he believed that the UK market is one in which Centrica should be able to grow, adding the premise of the restructure is to make the company a “far more responsive, agile business”.
Covid-19, coupled with low commodity prices, had a “significant impact” on financial performance. The results show that operating profit for H1 2020 fell 14 per cent to £343 million (down from £399 million).
The group saw an improved statutory loss at £135 million, up 70 per cent compared to last year’s £446 million loss. Meanwhile, net cashflow more than quadrupled from £177 million to £903 million.
Centrica said the net impact of the pandemic would have been £220 million without mitigating actions but was brought down to £60 million.
British Gas saw a decrease of 226,000 customers (2 per cent) and the company cited some of its core sales channels being unavailable as a result of the pandemic.
O’Shea said in statement accompanying the results: “Centrica delivered a resilient performance against the unprecedented backdrop of the Covid-19 crisis during the first half of the year. That is due to the response of colleagues across the group to keep our customers warm, safe and supplied with energy and services during the pandemic. I am truly grateful for their efforts.
“Our mission now is to turn around the company by putting customers at the heart of everything we do and creating a simpler, leaner, more modern and more sustainable company. The sale of Direct Energy is a fundamental step towards this, and although we have a lot more to do, we have the people, the brands and the market positions to deliver a successful turnaround.”