British Gas loses customers after steep price rises

BRITISH Gas lost another 164,000 customers in the last year as it faced criticism for upping prices and competition from upstart rivals.

Profits at parent company Centrica fell 31% to £447 million, as cost cuts failed to compensate for the impact from customer defaults and wider Covid-19 hits.

Centrica chief executive Chris O’Shea said a sweeping overhaul has “only just started”, with more than 3,000 jobs gone by the end of 2020 under a cost-cutting plan that will see 5,000 roles axed.

Stuart Lamont, investment manager at Brewin Dolphin, said: “Centrica’s results reflect the fact that it is a business in the middle of a significant transition period. Revenue and profitability have been impacted by Covid-19, but there are some positive signs: its balance sheet is in better shape than a year ago, while the sale of Direct Energy has reduced debt and is a good step towards simplification.”

Centrica is also facing industrial action. The GMB union said: “Around 7,000 British Gas engineers will down tools for four days from Friday, February 26 until Monday, March 1 over the company’s plan to sack them all and rehire them on worse terms and conditions.”

Centrica shares slid another 3p to 50p today. Five years ago they were closer to 240p. The group also announced it was bringing forward its commitment to have net zero greenhouse gas emissions to 2045 — five years ahead of its previous target and the UK deadline.

It also vowed to help its customers be net zero by 2050.

The results showed earnings at its British Gas energy business slumped 35% to £80 million as it lost another 164,000 customers last year, although it said this was all in the first half.

Mr O’Shea said: “It won’t be easy, but I am confident we have the people, the brands and the market positions to deliver a successful turnaround in the coming years.”

The group’s British Gas energy business took a hit of about £40 million due to warmer weather in 2020. It also set aside about £40 million for customer defaults in the Covid crisis. On the outlook, it cautioned over further likely bad debt charges due to rising unemployment.