Scottish Gas owner Centrica sheds customers but results remain on track

Scottish Gas owner Centrica has revealed it lost a further 107,000 household accounts, as it also upped its annual cost savings by £50 million.

The group trades under the Scottish Gas and British Gas brands. Picture: Contributed

But Britain’s largest gas and electricity supplier said it had eased the rate of customer losses, which were lower than the first half of the year, when it shed 178,000 accounts.

The group, which also trades as British Gas, said it now expects annual cost savings of £300m from the previous target of £250m, while it is trimming planned investment spend by £100m to about £800m.

Centrica is already axing up to 2,000 jobs over 2019 as part of overall aims to save £1 billion by 2022, but gave assurances that the increased cost savings this year will not lead to further staff cuts.

It confirmed annual results will be skewed towards the second half of the year, with the result dependent on weather and wholesale energy prices.

The firm added that while UK household supply accounts fell in recent trading, this was offset by stronger demand for services and homes solutions, leaving total consumer accounts 136,000 higher in the four months to October.

Competition

Many of Britain’s big suppliers have been hit by increased competition from smaller players as households switch providers.

Centrica’s outgoing chief executive Iain Conn, who recently announced plans to step down next year, said: “Our performance has been solid so far in the second half of the year and we remain on track to achieve our full-year targets.

“I am encouraged by further growth in customer accounts and the recovery of business energy supply margins in North America, while we also continue to drive material levels of efficiency and maintain capital discipline.”

David Barclay, head of office at Brewin Dolphin Aberdeen, noted: “It has been a tough 2019 for Centrica and the company’s results earlier this year underlined the challenges it faces on a number of fronts.

“The update suggests a level of stability – performance is in line with, albeit reduced, expectations. The hope will be that Centrica can use this as a platform for growth in the months and years ahead, becoming a stronger, simpler, and more competitive business.”

The figures come just a week after Centrica won a court battle with the energy regulator over the way the energy price cap had been calculated.

The group had claimed the rules cost the business £70m in the first three months of 2019, following the cap’s implementation.