Centrica, the British gas and electricity provider, announced 4,000 job cuts on Thursday as part of its cost efficiency programme after a set of weak annual financial results in 2017.
The company said it aimed to deliver annual savings of £750m by 2020 that would allow it to target 3-5% growth in cash flow, enabling a "progressive" dividend policy. The savings target included a "reduction in like-for-like headcount of around 4,000 by 2020", the company said.
Centrica announced the job cuts alongside its annual earnings report - a set of results the company itself called "weak" - hit by political and regulatory intervention in the UK performance issues in North America.
Full-year financial highlights
- Adjusted operating profit falls 17% to £1.25bn
- Adjusted earnings down 22% to £698m
- Adjusted earnings per share down 25% to 12.6p
- Group net debt down £877m to £2.6bn
- Proposed full-year dividend of 12p a share
Further to the cost efficiency programme targets, the company also said it planned to pursue the sale of its UK nuclear investments, but had no plans for major mergers and acquisitions.
Iain Conn, chief executive (left), said: "I am determined to restore shareholder value and confidence.
"The underlying trends driving our strategy are clear, as are the distinctive capabilities we have to benefit from them. We are committed to delivering attractive returns and growth over the medium term.
"Our focus today is on performance delivery and financial discipline - on demonstrating top line growth as we deliver improved service and new propositions for our customers, and driving efficiency as hard as possible to underpin our competitiveness."
Investors welcomed the commitment to a progressive dividend policy and pushed the shares 4.22% higher to 137.4p on the London Stock Exchange.
Helal Miah at The Share Centre said: "What income investors will be particularly pleased and relieved to hear today is regarding plans on keeping the existing dividend per share.
"Fear had been that this could have been cut given the poor performance of the group as well as the share price over the last 18 months and the indicative dividend yield now in excess of 8%."
Picture courtesy of Centrica