1m customers desert British Gas
BRITISH Gas has lost another 630,000 customers in just six months, the company revealed today.
The exodus at the gas and electricity provider, which has put up prices twice in 2004, comes after a net loss of 290,000 customers in the first half of the year, taking the total to nearly 1m.
British Gas-owner Centrica, which hiked prices in September by 12.4% for electricity bills and 9.4% for gas, also admitted that higher energy prices would weaken profitability in the UK for the firm next year.
The company, which supplies 12m gas and 6m electricity customers and had already put its prices up in January by 5.4%, said it would not increase household bills again immediately.
Instead it plans to absorb some of the rise in electricity and wholesale gas prices at the expense of its own margins. However, the last rise in prices already means some families are paying around ?100 more a year.
A raft of companies have pushed up domestic fuel costs this year as the price of gas has soared. Wholesale gas prices in the second half of the year were 32% up on a year ago, while electricity prices increased by 18%.
'The level of churn has fluctuated and is starting to fall as most other suppliers have also now announced similar price increases,' the company said.
Sales at British Gas have recovered to only 80% of the level before the changes to bills were announced.
In a trading statement, Centrica assured investors that its results for the year to 31 December would be in line with hopes following improved performances in its other divisions.
More gas has been produced in its upstream business during the second half of the year to take advantage of the surge in energy prices.At the same time, its gas storage business was continuing to exceed expectations and full-year profits in the division would be ahead of last year.
Centrica said it was comfortable with meeting market forecasts for its 2005 results because an improved performance by its gas production and storage businesses would offset flat margins at British Gas.
Gas production was expected to be at least 10% higher than previously expected, while operating profits in storage would be significantly higher next year.
