Centrica has slashed the dividend for its 650,000 small shareholders and plans to cut costs and investment after warm weather and falling oil prices reduced annual profits at the owner of British Gas by more than a third.
It is the first time Centrica has cut its dividend since the company was created in 1997, and leaves many individual investors with less income than they had come to expect.
Operating profit at British Gas fell 20% to £823m because of a sharp drop in demand during the warmest year on record. The average customer bill fell by about £100, and the average profit per customer fell by almost £10 to £42.As a customer, I welcome the reduction in my gas bill. As a shareholder, I regret the cut in the dividend but I console myself with the realisation that the 30% cut takes the dividend from over 6% annually to slightly over 4% - which is still a lot more than I would get from putting the money in a bank account.