The City will look for early signs of a turnaround at British Gas owner Centrica when it posts a trading update next week.
British Gas parent Centrica will want to show signs that its turnaround plan, which involves cutting 6,000 jobs, is on track when it posts a trading update on Thursday.
Its new strategy announced by chief executive Iain Conn in July focuses on boosting its residential supply business while cutting back on oil and gas production in regions such as Trinidad and Tobago and Canada.
Centrica is aiming to raise up to £1 billion over the next two years from the sale of wind farms and some of its exploration and production assets.
It also said it will shed 6,000 jobs from its workforce of around 37,500. But it would create 2,000 new posts, leading to a net loss of 4,000 roles.
This marks a big change from the strategy pursued by Mr Conn’s predecessor, Sam Laidlaw, who invested heavily in Centrica’s upstream oil and gas business.
Mr Conn, who took up his post in January, said the firm would invest an additional £1.5billion over the next five years in firms that specialised in smart devices such as smart thermostats to give customers greater control over energy use.
It added it would spend £1.5 billion less on its exploration and production and power generation arms over the same period.
Centrica said it would target cost efficiencies of £750 million over five years.
This comes after the firm said in February that its annual adjusted profit fell 35% to £1.75 billion in what it said was a “very difficult year”.
The group also took the “difficult decision” to rebase its shareholder dividend. The full-year payout for 2014 will be 21% lower at 13.5p.
British Gas, Britain’s biggest energy supplier, said it lost 368,000 customer accounts over the 12-month period, but still serves 14.8 million customers.
Centrica’s review comes as it faces a full-scale competition probe along with the rest of the Big Six firms that dominate gas and electricity supply in the UK. The other major suppliers are RWE, EDF, E.ON, npower and SSE.
In July British Gas announced its second price cut of the year, bringing bills down by an annual average of £72.
But consumer bodies said global wholesale gas prices have been slashed due to weaker demand from the eurozone and Asia, and oversupply from the US and Australia.
In June, Energy Secretary Amber Rudd wrote to the major power suppliers asking them to pass on double-digit falls in gas and electricity costs since the start of the year.
Analysts at Morgan Stanley said: “If commodity prices remain this weak, we expect Centrica to push for further operating cost savings and further reductions in oilfield services contracts costs.”
The Competition and Markets Authority (CMA) has been investigating the energy market since last summer.
An early report by CMA in February found that the large companies were overcharging loyal customers who did not switch suppliers by up to £234 a year.
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