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UPDATE 2-Centrica looks to services, flexible energy for growth
June 21, 2017 / 12:47 PM / 6 months ago

UPDATE 2-Centrica looks to services, flexible energy for growth

* Expects 2 bln pound revenue from units by 2022

* Sells Langage, South Humber sites for 318 mln pounds

* Shares up 2.9 pct (Updates, adds CEO, details, shares)

By Karolin Schaps

LONDON, June 21 (Reuters) - Centrica expects annual revenue of around 2 billion pounds ($2.54 billion) by 2022 as Britain’s biggest energy supplier takes aim at the growing home services market and flexible energy management.

Centrica, parent firm of British Gas, sees zero growth potential from traditional energy supply and power generation into the middle of the next decade.

Instead, it wants to expand in home services, which includes selling tools to detect boiler breakdowns and the Hive smart thermostat.

It also is looking to grow in distributed energy production that offers faster ways of generating electricity and helps businesses better manage their energy needs.

Centrica said it expects its Connected Home and Distributed Energy & Power units to break even by 2019 and for revenue by 2022 to increase ten-fold from just 200 million pounds last year.

“We must turn ourselves into a 21st century energy and services company,” Chief Executive Iain Conn told analysts on Wednesday.

As part of this move, Centrica on Wednesday announced the sale of its two biggest gas-fired power plants to Czech peer EPH for 318 million pounds ($401 million).

Centrica’s Langage and South Humber power plants, which jointly employ around 130 people, have an installed capacity of 2.3 gigawatts (GW).

Centrica’s shares were up 2.9 percent at 1119 GMT, making it the second-biggest gainer on London’s FTSE 100 bluechip index.

Two weeks ago it sold its Canadian oil and gas assets and on Tuesday Centrica also announced the closure of its Rough gas storage site, Britain’s largest.

In total, Centrica has raised over 900 million pounds from divestments of traditional assets, in line with a 2015 target to divest up to 1 billion pounds worth of assets.

Centrica’s diversification reflects low power prices, rising renewables and other factors which have also forced European peers to adopt new business models.

Germany’s RWE and E.ON have each split off their retail, networks and renewables businesses.

$1 = 0.7880 pounds Editing by David Goodman and Jason Neely

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