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British Gas owner Centrica loses more customers British Gas loses more customers in first half of 2018
(about 1 hour later)
British Gas owner Centrica lost 340,000 customer accounts in the UK in the first half of this year, group chief executive Iain Conn has told the BBC. British Gas lost 340,000 customer accounts in the UK in the first half of this year, the chief executive of the firm's parent company has told the BBC.
His comments came as Centrica said operating profits at its consumer business fell 20% to £430m in the six months to the end of June. Iain Conn said the rate of customer losses had halved and he hoped customer numbers would stabilise, but did not give a timeframe for this to happen.
Mr Conn said he hoped customer numbers would stabilise but would not give a timeframe for when this might happen. His comments came as Centrica said operating profits at its consumer business had fallen by 20% to £430m.
British Gas still has 3.5 million customers on standard variable tariffs. Shares in Centrica fell 5% in early trade.
This is down from 4.3 million at the start of the year. British Gas still has 3.5 million customers on Standard Variable Tariffs, which are often the most expensive.
However, that number is down from 4.3 million at the start of the year as the company has encouraged customers to switch to cheaper fixed-rate deals ahead of a cap on more expensive tariffs that is expected to come into force at the end of this year.
The way the cap is worked out will be published in August and will vary around the UK according to regional market conditions. It will be reviewed and reset by the regulator, Ofgem, every six months.
Mr Conn told the BBC he remained concerned that the cap would mean some customers would end up paying more.
"Prices may well bunch around the level of the cap so some of the cheaper deals in the market may disappear which means that some customers will end up paying more."
Instead he suggests ending the Standard Variable Tariff as it now stands, so that no customer languishes forever on the same tariff but is prompted to change at some point.
More than four million British Gas customers' bills increased at the end of May, and this increase came after electricity bills were hiked last September.
Mr Conn told the BBC: "We have to monitor all the drivers of costs and energy prices and we aim to keep our tariffs competitive. Our prices are well below the average of the other large suppliers.
Analysis:Analysis:
by BBC business editor Simon Jackby BBC business editor Simon Jack
The continuing fall in customer numbers and the number of services they buy will be a disappointment to the company that has been trying to stem the decline by offering new services, including allowing customers to monitor and manage their energy usage through mobile phone apps.The continuing fall in customer numbers and the number of services they buy will be a disappointment to the company that has been trying to stem the decline by offering new services, including allowing customers to monitor and manage their energy usage through mobile phone apps.
That push towards connected services has seen some growth but if the acid test is whether customers want to stay with you - British Gas is failing.That push towards connected services has seen some growth but if the acid test is whether customers want to stay with you - British Gas is failing.
Centrica is much more than just British Gas, of course - it also has businesses in the US and Europe but overall performance has been roughly flat.Centrica is much more than just British Gas, of course - it also has businesses in the US and Europe but overall performance has been roughly flat.
Chief executive Iain Conn is coming under pressure from shareholders to improve the performance of the company. The share price has more than halved in the five years that he has been in charge.Chief executive Iain Conn is coming under pressure from shareholders to improve the performance of the company. The share price has more than halved in the five years that he has been in charge.
He points to a collapse in oil and gas prices since 2013, ongoing regulatory probes, the expense of smart meter roll out and now the introduction of a price cap.He points to a collapse in oil and gas prices since 2013, ongoing regulatory probes, the expense of smart meter roll out and now the introduction of a price cap.
Despite this, he is convinced that growth is around the corner.Despite this, he is convinced that growth is around the corner.
He will want that corner to come soon.He will want that corner to come soon.
Price cap
British Gas is the biggest energy supplier in the UK and one of the so-called Big Six companies
There has been criticism of the standard variable tariff that each company has and so, an energy price cap is set to be introduced by the government across the industry before the end of the year to help vulnerable customers.
However, Rik Smith, energy expert at comparison site Uswitch, does not feel it will help everyone have lower energy bills.
He told BBC Breakfast: "We don't see the price cap as a silver bullet for most of us. There is an expectation that suppliers may price up the cap and relax into a world where they don't have to compete for customers."