Centrica boss quits as shares hit 21-year low

Losses reach £569 million Dividend cut by 58 per cent More painful job cuts to come

MORE than £1bn was wiped off British Gas owner Centrica after it slashed its dividend and showed chief executive Iain Conn the door.

On another bleak day for investors, the shares fell 19pc to a 21-year low of 73.58p, taking losses since Conn took over in January 2015 to 74pc.

The company said the 56-year-old has agreed to stand down having been paid more than £11m. He could earn a further £6m this year.

Conn, pictured, has overseen a tumultuous period at Centrica, including a cull of nearly 10,000 jobs. There has also been a mass exodus of British Gas customers, with nearly 3m accounts closed during his time.

And in a fresh blow to the group’s 600,000 retail investors, many of whom bought British Gas shares in the 1980s ‘Tell Sid’ privitisation campaign, Centrica slashed the prized dividend from 12p to 5p.

The cut came as Centrica posted £569m half year losses, after a £415m profit in the same period last year.

Conn, 56, blamed the Government’s energy price cap – saying it carved £300m out of British Gas profits – as well as a need for bigger contributions to the company’s pension pot.

He also announced Centrica will exit oil and gas production, as well as nuclear power, cementing a shift at the company towards services instead of energy generation.

But the moves sparked a huge sell-off, sending shares tumbling to lows not seen since 1998.

When the closing bell rang, the stock had fallen 20pc to 73.58p – valuing Centrica at £4.3bn. It had stood at 279p and was worth £15bn when Conn took charge.

The fall left Centrica clinging on to its FTSE 100 index place last night, with only struggling retailer Marks & Spencer worth less.

‘We will have completed the shift to a more competitive, simpler and smaller company,’ said Conn.

‘It’s the natural time, in due course – I’m not going yet – to hand over to somebody during the course of next year.

‘The big point here is this company is becoming one of the largest, if not the largest, energy services and solutions companies capable of taking customers on the journey towards a lower carbon future.’

There have been months of speculation about Conn’s future. He agreed to leave after discussing the matter with chairman Charles Berry, who started in February.

Conn inherited a company with a sprawling range of assets in power production and set about selling them off, choosing to focus on customer-facing services such as digital devices and home utility repairs. However, Centrica has been hit by lower oil and gas prices as well as the Government’s cap on energy tariffs.

Conn said the cap, introduced under former prime minister Theresa May, was akin to a ‘torpedo’ fired at his company.

Centrica said revenues for the six months to June 30 fell from £12.1bn to £11.6bn. At the end of the period, the firm said it had just under 12m UK energy customers – down from 14.8m before Conn took over.

Luke Hildyard of the High Pay Centre said: ‘When a chief executive makes £11m over such a traumatic period in time, it’s hard not to think that something is terribly wrong with the system.

‘Complex performance-related pay packages are totally pointless if big business leaders still rake in millions even as the company, its workers and shareholders suffer so badly.’

Russ Mould, investment director at AJ Bell, said the bigger than feared dividend cut was a ‘nasty surprise’.

‘This is more bad news for income investors,’ he added.