Centrica has cancelled a proposed 2019 final dividend payment of 3.5 pence per share as part of efforts to cut cash expenditure in the year by around £400 million, to provide flexibility to navigate the impacts of the pandemic.
The company said residential customers are using more energy as they work from home, but that increase was outweighed by the reduction in demand from business customers as sites temporarily close. It expects bad debt to rise as customers in all groups defer their bill payments, as well as a fall in revenue from services and solutions. But said it had, “Substantial liquidity available” to accommodate the anticipated increase in working capital.
It is reducing operating costs, halting all non-essential customer visits to minimise contact, but it said, “We have several hundred UK service engineers who have volunteered to perform essential service visits to customers’ homes even where there may be higher risk of Covid-19, to ensure they have continued access to heat, hot water and electricity.” It decided earlier this year not to award Board level bonuses relating to 2019; now bonus payments to all other management have been paused and will be reviewed when the financial impacts of the pandemic become clearer.
It is delaying capital and restructuring projects, and has paused the sale of Spirit Energy, which would have seen initial bids around the end of March.
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