The owner of British Gas said it will save around £100 million in operating costs this year as nearly all of its staff have accepted new contracts which unions claim will cut pay by 15% for some workers.
Centrica revealed that year-on-year operating cost savings are expected to reach more than £100 million due to the major restructuring of the group.
“The modernisation of our group remains on track and the difficult but necessary process to move colleagues on to new terms and conditions is now complete,” said chief executive Chris O’Shea.
Engineers at British Gas have staged dozens of strikes over the last year in a dispute over pay and conditions.
The GMB union has accused the company of firing staff who refuse to sign new contracts which it claims include considerably worse pay. British Gas denies that the new terms mean a pay cut and said most staff have accepted them.
Mr O’Shea said: “We are pleased that 98% of UK colleagues have accepted the new contracts which will enable us to better serve the needs of our customers.”
The walkouts and the impact of Covid-19 have led to a backlog of work.
Non-essential service visits were postponed to reduce the risk of spreading the virus.
However, businesses have been using less of Centrica’s electricity during the pandemic, as many offices remained closed or only partly staffed. In the first three months of this year business electricity demand dropped by around 15%.
The number of boilers that Centrica installed in homes across the country dropped 11% compared with the same period last year.
“As expected, trading conditions have remained tough in the year to date,” Mr O’Shea said.
But he added: “Although the external environment remains uncertain, our tight focus on cash and on fixing the basics across the group leaves us well placed as we continue the turnaround of our company.”
Centrica said it will not make any guesses on what its financial situation could look like this year because of the uncertainty caused by Covid-19.
It said that net debt dropped from £3 billion to £500 million between December and March, due to the nearly £3 billion sale of US subsidiary Direct Energy.
Shares dropped 2.3% as markets opened on Monday morning.