Npower sheds 350,000 customers ahead of SSE supply tie-up

EMBATTLED Big Six energy supplier Npower has continued to shed customers and deepen its losses this year ahead of its planned tie-up with SSE’S energy supply arm.

The supplier lost around 350,000 customers over the first half of the year, dragging the company to a loss of £15m compared to a loss of £11m in the same months last year. The painful decline in customer accounts has swept all of the major energy suppliers this year after a string of tariff hikes were implemented.

Npower’s losses were even larger than the 340,000 account losses suffered by British Gas, which is by far the largest supplier in the market.

By contrast, Scottish Power lost only 35,000 customers over the same period of time. Meanwhile, E.on UK was the only major supplier to gain customers.

The 50,000 extra customer accounts may mean the UK arm of the German energy giant has surpassed SSE as Britain’s second largest supplier.

Npower blamed rising competition in the market, which now hosts some 70 suppliers after years dominated by the Big Six. Industry group Energy UK is expected to reveal another huge jump in the number of customers switching suppliers in the next market report scheduled for Monday.

To help withstand the pressure of both rising competition and costs, Npower is planning to team up with SSE’S supply business to create a new listed energy company by the coming winter. The company, under the leadership of former Dixons Carphone boss Kate Bickerstaffe, is set to emerge in line with the Government’s energy price cap, which is to apply further strain to the market by limiting how much suppliers can charge.

Paul Coffey, Npower’s boss, said the results reflected “how tough the market is for energy suppliers, especially in domestic supply”.

“Intense market competition drove a decline in our domestic account base during the first half of the year and, at the same time, our metering and obligations costs are higher than last year, which has weighed on our profitability,” he added.

Mr Coffey said that the proposed merger remained on track, following the appointment of the energy industry veteran Gordon Boyd as chief financial officer designate for the new company.