British Gas owner Centrica reveals fresh customer exodus

(qlmbusinessnews.com via news.sky.com– Mon, 13th May 2019) London, Uk – –

Centrica said it lost 234,000 UK home energy supply accounts at the start of 2019, adding to 742,000 shed in 2018.

British Gas owner Centrica has revealed a fresh customer exodus at the start of the year and warned that a “challenging trading environment” will put further pressure on its annual performance.

The FTSE 100 company said it lost 234,000 UK home energy supply accounts in the first four months of 2019, partly blamed on changes to the government's energy price cap.

Centrica said in a trading update that its performance was hit by a “specific set of external factors” including the price cap as well as warmer than usual weather and falling UK natural gas prices.

It said: “While a number of the factors leading to the challenging trading environment are temporary in nature, they will impact financial performance in the first half of 2019 and have also put some further pressure on the outlook for the full year.”

Meanwhile, Centrica said it is continuing to target efficiency savings and the disposal of “non-core” parts of its business, as well as pressing ahead with a previously-announced programme of job cuts which will see its workforce reduced by 1,500 to 2,000 this year.

It kept its full-year outlook for cash flow and debt unchanged, helping shares rise 2% in early trading.

British Gas is Britain's largest energy supplier.

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Its loss of 234,000 UK customers at the start of the year adds to the 742,000 it shed in 2018.

Centrica blamed the latest decline partly on a “spike in customer churn in March and April following the announcement of a significant increase in the level of the default tariff cap”.

The introduction of the cap, designed to prevent millions of UK energy customers from being ripped off, has had a major impact on the biggest providers Centrica and SSE – the latter partly blaming the policy for a round of job cuts announced last week.

Centrica has already said the cap would have a £70m impact on profits for the first quarter of 2019 and also weigh on its performance for the year as a whole.

The initial level of the cap, which came into force at the start of January is set by regulator Ofgem, was increased by £117 after only three months.

This hike was then passed on to customers by many of the energy providers.

Centrica's trading statement came hours ahead of its annual general meeting.

Its chief executive Iain Conn said: “Although operational performance has been largely in line with our plans, external factors have presented challenges for Centrica during the first four months of 2019, in the form of the default tariff cap, warm weather, and falling gas prices.”

The AGM comes a month after Centrica's annual report revealed a 44% annual pay hike to £2.42m for Mr Conn in 2018.

Profits at Centrica's UK home energy supply division fell 19% last year but the overall group's headline measure of operating profit rose 12% to £1.39bn.

By John-Paul Ford Rojas, business reporter