2nd Apr 2020 08:09
(Alliance News) - British Gas owner Centrica PLC on Thursday cancelled the planned final dividend for 2019 amid the chaos caused by Covid-19.
Centrica in February declared a 3.5 pence per share final dividend for 2019. The annual total was 5.0p, rebased from 12.0p last summer.
However, the company will no longer be paying that final return. This, it said, is a "prudent" decision given the financial impact of Covid-19.
Centrica said it is difficult to quantify exactly how big that impact will be. It has identified GBP400 million of spending reductions including halting all non-essential costs and delaying capital and infrastructure projects.
There has been a rise in demand for energy due to more people working from home, but this has been countered by a fall in demand from businesses, it said. Centrica is expecting outflows due to deferred customer payments, and there will also be lower revenue from services for both houses and businesses.
In response, Centrica will not be paying any 2019 bonuses to board members, and other bonuses to management have also been paused.
The sale of oil & gas business Spirit Energy has been paused until financial and commodity markets have "settled", Centrica added.
The firm had been expected first bids for Spirit around the end of March, but this process has now been delayed. Centrica reaffirmed its commitment to selling the business.
Interim Chief Executive Chris O'Shea commented: "As the scale and length of the crisis unfolds, it is becoming increasingly clear what a vital role so many of the Centrica team perform to keep our communities warm, safe and supplied with energy.
"I am extremely proud and humbled by the response of colleagues, and on behalf of the board, I would like to say how grateful we are to them. While there are so many uncertainties surrounding the impacts of this situation, I am confident we have acted promptly and prudently to underpin the long term strength of Centrica."
Shares were 2.4% higher in early trade on Thursday in London at a price of 37.99p each.
By George Collard; [email protected]
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