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The business energy supply arm of British Gas saw its customer numbers slip by 3 per cent in the first quarter, but colder weather helped boost its volumes in its residential business.
Parent company Centrica said in an interim management statement on Monday morning that the number of its business supply accounts dropped by 28,000 to 826,000 in Q1 while the resolution of its IT billing issues, first reported by Utility Week in January, remain “ongoing”.
The business arm of British Gas was forced to apologise for its billing blunders, which left some small companies without a bill for over nine months, explaining that “teething issues” affected only a small number of the 500,000 customers which were moved to its new system over the past eighteen months.
In addition British Gas Services saw its number of contract holders fall by 62,000 to just over 7.9 million in the first quarter, due to a “challenging” sales environment.
Despite the decline in contract holders parent company Centrica said it expects “improved year-on-year profitability” for its downstream operations as colder weather helped its residential supply business bolster sales by 10 per cent for gas and 2 per cent for electricity while account numbers remain stable at 14.8 million.
Centrica said it will set aside an additional £50 million to invest in the residential supply business area over the next three years.
But Citigroup investors noted that without the colder spell “the rest of the businesses appear to still face headwinds”.
Centrica said its downstream performance would be more than offset by the negative impact of lower commodity prices on the upstream business.
The company is currently trading in line with expectations but that future performance relies on temperature-led demand and commodity prices. In addition to these concerns Centrica said “the uncertain outcomes” of both next week’s UK general election and the Competition and Markets Authority (CMA) investigation into the UK energy market could also affect profitability.
The CMA is due to make its initial findings known this summer with its final verdict on the health of the market set for Christmas.
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