British Gas owner Centrica ‘to cut dividend and sell off oil and gas business’
Centrica is said to be planning to cut its dividend and start looking for a buyer for its oil and gas business.
The British Gas owner is reportedly planning to cut its payout in a bid to keep its credit rating. It would join the likes of Vodafone, Marks & Spencer and BT in doing so.
Read more: British Gas owner Centrica’s shareholders say yes to chief executive’s £740,000 pay rise
Centrica is Britain’s biggest supplier of gas and electricity. Its market value has plummeted since chief executive Iain Conn joined the company in 2015, from nearly £14bn to £5.3bn.
The FTSE 100 firm is perilously close to dropping out of the blue-chip index after intense competition in the sector hit its finances.
The news was first reported by the Sunday Times.
Analysts warned in May that a dividend cut is on the horizon. Centrica has said the government’s new energy price cap had dented its figures. This includes suffering a one-off £70m hit in the first quarter.
Conn has also faced criticism over his 44 per cent pay rise last year, which corresponds to around £1 for every one of the 742,000 customers his firm lost in 2018.
Centrica is preparing to inform markets of its recent fortunes in its half-year results on 30 July.
If the dividend cut is to go ahead, Conn would likely present the plan to shareholders on the same day.
The Times also reported Conn is likely to put Centrica’s 69 per cent stake in oil and gas explorer Spirit Energy up for sale.
The company is already selling stakes in nuclear plants. With these, it could raise around £1.8bn if it steps away from Spirit Energy. Centrica is saddled with £2.7bn in debt.
Read more: British Gas owner Centrica ‘may slash dividend’
When Conn joined the firm, it cut its dividend by 30 per cent.
Centrica declined to comment on the matter.
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