Centrica: the only way is up

Centrica's share price has fallen by nearly 90% over the past few years. New finance director Chris O’Shea will hope to reverse that.

Centrica, which owns British Gas, has promoted finance director Chris O’Shea to CEO, says Camilla Canocchi on This Is Money. O’Shea has replaced Iain Conn, who was criticised for a tenure that saw “the exodus of three million customers” as Centrica struggled with the advance of smaller competitors such as Ovo Energy, Bulb and Octopus. 

Falling energy prices, along with a government-imposed cap on energy bills, have also led to a series of profit warnings, culminating in total losses of £1.1bn in 2019.

O’Shea may have been confirmed in the top job, but he faces a “baptism of fire” as the company has been hit by the pandemic, which has “left customers struggling to pay bills”, says Emily Gosden in The Times. In the past two weeks he has already been forced to cancel Centrica’s dividend, slash costs and place 3,800 staff on government-paid furlough. 

In the longer term the company has been “under pressure” from both competition and the government’s price cap on bills. He also faces a tough fight to offload its nuclear and oil and gas businesses. The new leader of “Britain’s most unloved company” certainly has his work cut out for him, says Jim Armitage in the Evening Standard. 

Still, he “may not have just got the worst job in the City” as many of the company’s difficulties are now reflected in the share price, which has fallen by nearly 90% over the past few years. 

The stock is now so low that it would take a “Herculean effort” to disappoint investors from here. What’s more, Centrica could prove a “tasty takeover candidate”. A deal would enable O’Shea to end up being seen as the hero in this “grim tale”.

Recommended

Where will house prices go in 2023?
House prices

Where will house prices go in 2023?

We explore what could happen to house prices in 2023 as the market continues to slow down.
24 Mar 2023
What is inflation and how will it affect you?
Inflation

What is inflation and how will it affect you?

There has been much talk of inflation recently. But what exactly is it and what does it mean for our money?
24 Mar 2023
3 success stories set for long-term growth
Investments

3 success stories set for long-term growth

A professional investor tells us where he’d put his money. This week: Felix Wintle, manager of the VT Tyndall North American Fund, selects three favou…
24 Mar 2023
Share tips of the week – 24 March
Investments

Share tips of the week – 24 March

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages
24 Mar 2023

Most Popular

Where will house prices go in 2023?
House prices

Where will house prices go in 2023?

We explore what could happen to house prices in 2023 as the market continues to slow down.
24 Mar 2023
Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Ofgem’s price cap is now predicted to fall below £2,000, based on average typical use, from July, for the first time since 2022. We have all the detai…
21 Mar 2023
5 top UK tech stocks
Investments

5 top UK tech stocks

The UK market has never been considered a fertile hunting ground for tech stars. But there are plenty of promising companies beyond the old economy, s…
23 Mar 2023