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British Gas slows rate of energy account losses

Written by: Emma Lunn
British Gas lost another 107,000 domestic energy accounts in the four months to October – but its earnings outlook remains unchanged.

The latest trading update from British Gas owner Centrica said total UK customer accounts rose 136,000 in the four months to October as the growth in other services more than offset the continued decline in supply.

It added it had eased the rate of customer losses, which were lower than the first half of the year, when it shed 178,000 domestic energy accounts.

Centrica said the rate of losses during the four months to October was lower than for the first six months of the year and was “significantly lower” than in 2018 “despite continued high levels of price competition and market switching”.

The past few years have seen Centrica spend a huge amount of money to move it from being a traditional energy company to more of an energy services and devices firm, with a focus on its smart home brand Hive and its boiler services arm. The trading update emphasised that it was adding customers in these areas.

Centrica announced in July that it had made a £446m loss in the first six months of 2019, compared with profits of £704m in the same period last year.

For the full year, in line with the guidance given at the time of the 2019 interim results in July, Centrica continues to expect adjusted earnings to be weighted towards the second half of the year, adjusted operating cash flow to be in the lower half of the targeted £1.8 to £2bn range and year-end net debt to be within the targeted £3 to £3.5bn range.

Centrica now expects capital investment of around £800m, a reduction of £100m compared to indications at the time of interim results, and in-year efficiency savings of around £300m, an increase of £50m compared to the target of £250m.

Iain Conn, Centrica’s chief executive, said: “Our performance has been solid so far in the second half of the year and we remain on track to achieve our full year targets for both adjusted operating cash flow and net debt.

“Our focus remains on satisfying the changing needs of our customers, providing energy supply and its optimisation, and services and solutions to enable the transition to a lower carbon future.”

Mark Todd, co-founder at energyhelpline, said: “British Gas has just reported losing 107,000 energy accounts over the last four months showing that consumers are still switching away from them in droves. It is no surprise as their standard tariff customers can save a lot of money by switching. They do however remain the largest energy supplier in the UK, with around 12 million energy accounts around double their nearest competitor.

“This year British Gas have been fighting back with some really low cost customer offers. We are seeing them recruit three times more customers this year versus last year and in the last few months their new customer recruitment rate has been extremely high.

“Any customer on the expensive British Gas standard tariff should consider switching to British Gas’s very low cost offer which would save them £283 a year. This is available online for new and existing customers. It comes with renewable electricity, a fixed price till the end of next year and free boiler cover.”

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