Houston-based Direct Energy is planning to aggressively buy up electric retailers and expand its reach in Texas and elsewhere as it hopes to double profitability by 2018, the company said Wednesday.
Direct Energy, which says it is the largest retail electric provider in North America, has 3.5 million residential customers, including about 740,000 in Texas. It is the third-largest electricity retailer in the state, according to the company.
Direct Energy is the North American subsidiary of United Kingdom-based Centrica Energy, which reported adjusted earnings Wednesday of $2.1 billion in 2012, up 5 percent from 2011. Centrica said much of its focus for overall growth will come from Direct Energy, which had an operating profit of $526 million in 2012, up 5 percent from a year ago.
Direct Energy will aim to pick up new customers partly through its own marketing efforts, Centrica said.
“We will also continue with our successful bolt-on acquisition strategy, delivering scale and synergies, and will consider larger opportunities where appropriate,” Centrica CEO Sam Laidlaw wrote in his annual review. “Over the next 3 to 5 years we are targeting a doubling in profitability of our North America downstream business through organic growth and acquisition, with Direct Energy downstream becoming a more material part of the (Centrica).”
Direct Energy defines its electric retail business as its downstream business.
The company, which also has three natural gas plants in Texas, is exploring its options to expand as a natural gas producer.
It has 4,600 producing natural gas wells in Canada.
Direct Energy relocated its headquarters from Toronto to Houston last year. The company has 6,000 employees, including 900 at its headquarters at Greenway Plaza.
The company also announced a change in leadership, with Badar Khan changing roles to become CEO of Direct Energy, replacing Chris Weston. Weston will move to Centrica’s England office to take the role of managing director of the company’s downstream business, including residential electricity and gas.