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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Centrica plc    CNA   GB00B033F229

CENTRICA PLC

(CNA)
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Real-time Quote. Real-time CHI-X - 12/10 07:18:30 am
79.97 GBp   -1.51%
11/29Thousands of UK jobs at risk as E.ON breaks up Npower
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Thousands of UK jobs at risk as E.ON breaks up Npower

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11/29/2019 | 02:05pm GMT
A traffic light is pictured outside the headquarters of E.ON Climate and Renewables in Essen

FRANKFURT/DUESSELDORF, Germany (Reuters) - German energy group E.ON plans a 500-million-pound break-up of the struggling British Npower division it inherited from Innogy, which unions said could put up to 4,500 jobs at risk.

By Christoph Steitz and Tom Käckenhoff

The revamp, the latest among established British retail power providers, effectively removes one of the market's so-called 'Big Six' players, which have lost customers to nimbler recent entrants and been hit by a regulatory price cap.

E.ON's plan includes managing Npower's residential and small and medium-size business customers on the same platform as its own, while putting Npower's industrial and commercial customers into a separate business. The rest of Npower will be closed.

E.ON Chief Executive Johannes Teyssen said the group would examine options for Npower's industrial and commercial business, the division's only profitable part, suggesting it might be sold at some point.

The shake-up will result in up to 4,500 job losses at Npower, British union UNISON said, nearly 80% of the division's total staff. Union Unite, which has about 1,000 members at Npower, said the scale of the cuts was "horrific".

"The UK market has been very challenging for several years," Teyssen said. "Churn (customer switching) rates are high, margins slim, and the price caps introduced this year have exacerbated the situation. No company operating there has been spared these difficulties."

Teyssen said talks with British unions about the plans had started.

Shares in E.ON rose as much as 3.7% to their highest level in more than four months.

"We see this initial update as encouraging, given likely low market expectations around the outlook for Npower," Jefferies analysts wrote, keeping a "buy" rating on E.ON stock.

Npower has been suffering more than its large rivals, including E.ON itself, Centrica's, SSE, EDF and Iberdrola, partly because of internal billing problems.

E.ON said it expected its combined British business to achieve at least 100 million pounds of earnings before interest and tax (EBIT) and positive free cash flow from 2022 onwards.

E.ON took over Npower as part of a far-reaching asset swap with RWE that included the break up of Innogy. The deal, first announced in March 2018, has turned E.ON into a pure energy retail and networks group.

As a result of the transaction, E.ON's net debt nearly doubled to 39.6 billion euros (34 billion pounds) at the end of September.

E.ON also said on Friday the deal had led it to raise its 2019 adjusted EBIT forecast to 3.1-3.3 billion euros from 2.9-3.1 billion. In the first nine months of the year, adjusted EBIT fell 6% at 2.2 billion euros.

(Editing by Jason Neely and Mark Potter)

By Christoph Steitz and Tom Käckenhoff

Stocks mentioned in the article
ChangeLast1st jan.
CENTRICA PLC 0.54% 81.2 Delayed Quote.-39.81%
E.ON SE -1.03% 9.127 Delayed Quote.5.80%
ELECTRICITÉ DE FRANCE -0.06% 9.352 Real-time Quote.-32.19%
IBERDROLA 0.25% 8.794 End-of-day quote.25.31%
INNOGY SE -0.14% 44.35 Delayed Quote.8.89%
RWE AG -0.76% 25.99 Delayed Quote.37.04%
SSE PLC -0.30% 1318 Delayed Quote.21.87%
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Financials (GBP)
Sales 2019 28 883 M
EBIT 2019 977 M
Net income 2019 146 M
Debt 2019 3 418 M
Yield 2019 6,16%
P/E ratio 2019 17,5x
P/E ratio 2020 10,0x
EV / Sales2019 0,28x
EV / Sales2020 0,28x
Capitalization 4 721 M
Chart CENTRICA PLC
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Technical analysis trends CENTRICA PLC
Short TermMid-TermLong Term
TrendsBullishNeutralBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 18
Average target price 81,43  GBp
Last Close Price 81,20  GBp
Spread / Highest target 23,2%
Spread / Average Target 0,29%
Spread / Lowest Target -16,3%
EPS Revisions
Managers
NameTitle
Iain C. Conn Chief Executive Officer & Executive Director
Charles Andrew Berry Chairman
Christopher O'Shea Group Chief Financial Officer & Executive Director
Charles Cameron Director-Technology & Engineering
Mike Young Group Chief Information Officer
Sector and Competitors
1st jan.Capitalization (M$)
CENTRICA PLC-39.81%6 211
SEMPRA ENERGY34.80%41 112
NATIONAL GRID PLC16.57%40 746
ENGIE15.29%38 902
ORSTED AS43.49%38 829
ELECTRICITÉ DE FRANCE-32.19%31 718