British Gas owner Centrica stops customer outflow

The owner of British Gas has put the brakes on the number of customers choosing to leave the energy supplier in the last six months.

Centrica announced that it still has around 6.9 million energy customers in the UK, the same level as it reported in July last year.

It slows a major outflow from the company, which has been haemorrhaging customers for years. In the first six months of 2020, for instance, Centrica lost more than 250,000 UK energy supply customers.

The company gave further cheer to investors by saying it expects to beat market expectations.

Analysts who follow the company expect it to make 4.8p per share in adjusted earnings from continuing and discontinued operations.

Centrica did not reveal how much higher than the consensus it expects its earnings to reach, but it was still enough to help boost shares by 2.9% on Thursday morning.

The impact of the Covid-19 pandemic eased in the second half of 2020, Centrica said.

Businesses used 15% less electricity in the six months compared to the same period a year earlier, however it was a marked improvement for Centrica compared to the second quarter, when demand had dropped 30%.

“However, we remain cautious as we head into 2021, with the return of tighter Covid-19 restrictions in the UK and Ireland expected to put continued pressure on business energy demand and limit services workload,” Centrica said.

“In addition, the related uncertain economic backdrop increases the potential for additional working capital outflow and higher bad debts.”

Net debt is expected to have been around £2.8 billion at the end of the financial year, a 10% reduction.

This does not include the £2.7 billion the company got from selling its North American supply business in July. Most of the proceeds will go to reducing debt and paying into its pension schemes.

Centrica will present its 2020 results on February 25.