British Gas loses thousands of customers amid fierce competition

BRITISH Gas owner Centrica today admitted it had lost 399,000 customers in the first half of the year as households sought better deals elsewhere.

The drop came amid much tougher competition for customers as thousands came to the end of fixedterm contracts and jumped ship.

British Gas, which has also been hindered by problems with the introduction of a new billing system, managed to stem the decline in June by offering cheaper rates.

Earlier this month it also offered its existing customers free electricity on either Saturdays or Sundays for those who installed smart meters. Profits from British Gas’s energy supply business alone dropped 7% to £516 million.

The fall in customers contributed to a difficult first half for Centrica, whose power-generation business is also battling against lower energy prices in a climate of uncertainty over the postreferendum environment.

Underlying profits fell 12% to £853 million, while overall revenues dipped 13% to £13.4 billion.

Chief executive Iain Conn, who today welcomed RSA Insurance chief executive Stephen Hester to the board as a senior independent director, said negotiating a Brexit would be “like a bomb-disposal exercise”.

But the shares jumped 2%, or 4.8p, to 246.8p as Conn said he would be sticking to the plans laid out in February, delivering some £300 million in cost savings alongside 3000 job losses.

Oil major Royal Dutch Shell flopped badly in the City, however, as a 73% slump in underlying profits to $1 billion for the April-to-June quarter hugely missed forecasts.

The fall for Shell, still absorbing the $54 billion BG acquisition completed in January, was even worse than BP’s disappointing results on Tuesday amid oil prices lingering below $50 a barrel.

UBS analyst Jon Rigby noted the “absence of any obvious progress in earnings or cashflow” as the shares sank 55.5p to 1988.5p.