Centrica's profits and customer numbers drop

Thursday 20 February 2014 19.05
British Gas shed 2% of its residential customer accounts in 2013
British Gas shed 2% of its residential customer accounts in 2013

British Gas owner Centrica has revealed a £571m profit haul from its residential energy arm for 2013 months after increasing its gas and electricity prices.

It marks a 6% drop on the £606m the year before but is unlikely to calm public anger in the UK over rising energy costs.

Centria is part of a consortium which is taking over Bord Gáis Energy's sales division. The division supplies gas and electricity to around 900,000 households and businesses.

The UK company said today that British Gas shed 2% of its residential customer accounts in 2013 to 15.3 million.

Households switched to other suppliers following its move to increase tariffs by 9.2% on average from November as part of a round of winter bill rises across the industry.

It added that another 100,000 had quit the group so far this year, but customer switching was now "stabilising" after it scaled back its price rise by 3.2% following a shake-up of the government's so-called green levies on bills.

Across the group, operating profits were 2% lower at £2.7 billion last year.

Centrica's chief executive Sam Laidlaw admitted that public and investor trust in the energy industry had been "damaged" by the threat of price controls and political intervention.

The group's shares have plunged by more than a fifth since autumn following Labour's price freeze pledge, with the stock driven down further after Energy Secretary Ed Davey recently called for a full-scale investigation into the energy market that could see British Gas broken up.

Centrica's results showed that higher wholesale prices and unseasonally warm weather at the end of last year saw British Gas suffer an 18% slump in operating profit in the final six months of 2013, which offset a better start to the year.

Centrica said it "can't make promises" over prices for the year ahead, but added it would look to keep prices "as low as we can for as long as we can".

It said this year's milder winter weather was likely to see bills come down by 9% or 10% as households have not had to crank up the heating.

British Gas said it was "confident we can go back to customer growth" after the exodus since November, helped by the recent launch of new fixed price deals.

It revealed profit margins for its gas business stood at 8.9% in 2013 - far higher than the 0.8% electricity margin.