British Gas owner Centrica cuts 6,000 jobs

Energy firm Centrica has said it will cut 6,000 jobs as it reported a doubling of profits at its British Gas business in the first half of the year.

The company said half of the job losses would go through redundancies. Most of the cuts are expected to be in the UK.
However, Centrica said it would also create jobs in growth areas, so the net loss in jobs will be 4,000 from the firm's current total of 37,500.

First half profits at British Gas's residential arm rose to £528m.

That was up from £265m a year earlier. Centrica group profits fell 3% to £1bn.

Centrica said the rise in profits at British Gas was due to higher gas consumption, which was triggered by the cold weather earlier this year compared with milder weather in the first half of 2014.

However, the strong performance at British Gas was offset by a collapse in profits at Centrica's oil and gas production division. Profits in this unit fell 78% to £116m as a result of lower oil prices.

Profits 'not excessive'

Centrica appointed Iain Conn as chief executive at the start of this year.

He has been conducting a strategic review of the business over the past five months, which has concluded Centrica should concentrate on the British Gas side of the business and reduce its activities in actual energy production, which takes major investment.

That is a less attractive business currently, as raw energy costs, such as oil, are around $50-60 a barrel, half the levels of last year.

Centrica said it was assuming the oil price would not move far from that for the foreseeable future.

Mr Conn denied the company was making excessive profits at British Gas.

British Gas cut prices by 5% earlier this year, and is due to cut gas prices by a further 5% next month, which the firm says will mean average savings of £72 a year.

Mr Conn said profits per customer would remain at the same level as in other years, at about £40-£65 a year.

(BBC)