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| British Gas owner Centrica warns about poor trading | |
| (35 minutes later) | |
| British Gas has lost 823,000 - nearly 6% - of domestic customer accounts since the end of June. | British Gas has lost 823,000 - nearly 6% - of domestic customer accounts since the end of June. |
| Owner Centrica said 150,000 of those accounts had switched to other providers, some of them because it raised prices in September. | Owner Centrica said 150,000 of those accounts had switched to other providers, some of them because it raised prices in September. |
| The news, unveiled in a warning about poor trading, sent Centrica shares tumbling by 17%. | The news, unveiled in a warning about poor trading, sent Centrica shares tumbling by 17%. |
| Centrica said operating profits would be "lower than expected" because of problems at both its UK and US arms. | Centrica said operating profits would be "lower than expected" because of problems at both its UK and US arms. |
| British Gas has 13.1 million customer accounts. | British Gas has 13.1 million customer accounts. |
| Centrica said 650,000 of the customer accounts it had lost were as a result of so-called "collective switching", where large groups of households join forces with a new provider to get the best deal. | Centrica said 650,000 of the customer accounts it had lost were as a result of so-called "collective switching", where large groups of households join forces with a new provider to get the best deal. |
| Also, a fall in customers for its energy sold under the Sainsbury's brand name and pre-payment tariffs also contributed. | Also, a fall in customers for its energy sold under the Sainsbury's brand name and pre-payment tariffs also contributed. |
| Earlier this week, British Gas said it would withdraw Standard Variable Tariffs for new customers. | Earlier this week, British Gas said it would withdraw Standard Variable Tariffs for new customers. |
| Centrica said that "despite the impact of account losses and warmer than normal weather in the year to date", cost-cutting meant British Gas's full year operating profit was expected to be "broadly in line with 2016". | Centrica said that "despite the impact of account losses and warmer than normal weather in the year to date", cost-cutting meant British Gas's full year operating profit was expected to be "broadly in line with 2016". |
| Although the company also added that the dividend was "underpinned", Centrica shares were down 22% at one point. | Although the company also added that the dividend was "underpinned", Centrica shares were down 22% at one point. |
| 'Price hike' | 'Price hike' |
| Neil Wilson, senior market analyst at ETX Capital, said: "The price hike in September clearly had an impact. You have to wonder why Centrica rushed out its plans to reform the energy market - perhaps it's seeing a larger number of account losses than planned." | Neil Wilson, senior market analyst at ETX Capital, said: "The price hike in September clearly had an impact. You have to wonder why Centrica rushed out its plans to reform the energy market - perhaps it's seeing a larger number of account losses than planned." |
| The performance of Centrica's division supplying large scale business users in North America and the UK also seems to have spooked the financial markets. | The performance of Centrica's division supplying large scale business users in North America and the UK also seems to have spooked the financial markets. |
| The North America Business division is expected to report full year adjusted operating profit of around £80m, down from a previous expectation of £259m | The North America Business division is expected to report full year adjusted operating profit of around £80m, down from a previous expectation of £259m |
| The division has been hit by intense competition and a one off charge. | The division has been hit by intense competition and a one off charge. |
| The UK Business division has also faced a very competitive market. | The UK Business division has also faced a very competitive market. |
| George Salmon, equity analyst at Hargreaves Lansdown, said: "It is the business-facing parts of Centrica that are responsible for the latest dose of bad news. | George Salmon, equity analyst at Hargreaves Lansdown, said: "It is the business-facing parts of Centrica that are responsible for the latest dose of bad news. |
| "Weaker margins as a result of intense pricing pressure on both sides of the Atlantic, plus a £46m write-down, means Centrica is set to miss profit expectations." | "Weaker margins as a result of intense pricing pressure on both sides of the Atlantic, plus a £46m write-down, means Centrica is set to miss profit expectations." |