Energy pair in a cap flap

Ofgem blamed for loss of millions

BY DAVID CRAIK TWO big energy firms – British Gas owner Centrica and E.On – have blamed Ofgem’s new price cap for wiping millions of pounds off their profits.

Centrica took a £70million first-quarter hit to its operating profit as a result of the cap on standard variable tariffs introduced on January 1.

It said that this, coupled with warmer than expected weather and lower UK natural gas prices, had made it a “challenging” start to 2019 which will put “further pressure” on its full-year performance.

Centrica revealed it had lost another 234,000 UK customer accounts over the first four months of the year, with 183,000 households quitting. It said the increase in the level of the price cap in April had led to a spike in customers switching to rivals.

E.On UK said the cap as well as “keen competition” had seen its earnings in the three months to the end of March slump £77million. It also saw a £173million decline in sales with customer numbers dropping by about 200,000.

Earlier this year, E.On said customers on its standard variable gas and electricity tariff would see bills rise by about £117 from £1137 to £1254 from April as a result of the regulator changes.

Iain Conn, group chief executive of Centrica, said: “Although operational performance has been largely in line with our plans, external factors have presented challenges.

“However, we continue to focus on those things we can control and as a result we expect to achieve our 2019 cash flow and net debt targets.”

Conn also faced pressure at Centrica’s AGM yesterday when 15 per cent of shareholders voted against company pay policy. Conn was recently handed a 44 per cent pay hike to £2.4million. That is 109 times more than the average British Gas call centre employee. Oil Rio Tinto Rolls-Royce Royal Dutch Shell B Royal Mail RSA RBS J Sainsbury SSE Severn Trent Serco Sports Direct Smith & Nephew 4368.0 897.8 2458.0 239.5 551.2 226.3 205.5 1115.0 1982.5 120.3 287.2 1612.0 -44.0 -20.8 +25.0 -4.3 -3.0 -6.6 -6.2 +2.5 +21.0 -1.8 -7.2 0.0