Centrica boss to step down after 'exceptionally challenging' first half

Centrica on Tuesday announced that its chief executive will retire next year as the British Gas owner swung to a loss and more than halved its interim dividend following an "exceptionally challenging" first half of the year.

Former BP director Iain Conn, who has served as chief executive since the beginning of 2015, will remain with the company until at least the 2020 annual general meeting and provide his support to help with the business' continued transition to focus its attention on customer-facing opportunities.

The energy supplier said it will exit oil and gas production and nuclear power generation as part of this transition, and is now aiming for £1bn annualised efficiencies over the 2019-2022 period, £250m more than previous estimates.

Meanwhile, Centrica recorded a statutory loss before tax of £446m for the six months ended 30 June, swinging from a profit of £704m during the same point last year, which the company blamed on the new energy price cap and increased pensions contributions as it slashed its interim dividend by 58% to 1.5p.

This came as FTSE 100-listed company also cited warm weather and regulatory outages at its nuclear power plants as issues as it reported that profit at its business division fell by 89% to £11m.

However, the company reiterated full year guidance for operating cash flow of between £1.8bn and £2bn, as well as net debt in a range of £3bn to £3.5bn.

"Centrica faced an exceptionally challenging environment in the first half of 2019, which impacted earnings and cash flows. We have also regrettably had to make the decision to rebase the dividend due to our changed circumstances including the UK energy price cap and increased demands on our cash flows, including additional pension contributions. The outlook is more positive for the second half of the year and we expect this momentum to continue into 2020," said Conn.

Centrica's shares were down 10.19% at 81.58p at 0814 BST.