Professor David Elmes, Head of the Global Energy Research Network at Warwick Business School and a former Vice President for Schlumberger and Capgemini, comments on the news that Centrica may shed 4,000 jobs after reporting a 17 per cent fall in profits.

Professor David Elmes said: "Centrica’s update on its 2017 results confirms the weak performance in the latter part of the year but paints a picture of a company more in control than its quarterly update last November which saw a 15% one day fall in its share price. The company’s shares are up about 4%, but shareholders are still looking at a 40% slide over the last year.

“CEO Iain Conn will point to progress in his repositioning of the company: more customers buying services to use energy more effectively, a shift in the company’s focus from finding gas or generating electricity to serving customers and finding efficiencies that cut costs by 10%.

"But there are still big challenges in delivering performance today while that repositioning takes place. Supplying energy to businesses, particularly in the US, performed poorly and the company was particularly critical of plans in the UK to cap consumer prices.

"Early comments have linked the cap to a headcount reduction of 4000 staff by 2020, pointing to a 7% fall in UK consumer accounts. It’s a bit more complex than that: many of the customers who left this year were on low price deals that Centrica lost money on. Centrica wants to sell services that help customers use energy more efficiently and a cap may limit their ability to do that.”

22 February 2018

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