Centrica slams energy price cap in trading update

Intervention could lead to reduced competition and choice, warns British Gas parent company

Centrica has become the latest organisation to hit out at the prospect of an energy price cap, as its latest trading update reveals it has lost more than 250,000 home customers this year.

In an update issued ahead of today’s annual general meeting, the parent company behind British Gas warned against “any form of price regulation” and claimed it could lead to “reduced competition and choice”.

“We have had regular and constructive dialogue with the government and have proposed alternative ways to improve the market further and address their concerns, without resorting to price regulation,” the update adds.

The Conservative party has promised to include details of a price energy cap in their manifesto for next month’s general election.

Last week, the switching website MoneySuperMarket claimed the plans could mean the end of many cheap fixed-rate tariffs.

The trading update also shows the firm has lost 261,000 home energy accounts in the year to date, although the company said this reflects a “greater shift towards enhanced segmentation and customer value”.

And gross margins for Centrica’s UK business are expected to be impacted by “warm weather, electricity cost volatility and the phasing of energy volume settlements”.

Adjusted operating cash flow for the group is expected to be above £2 billion and closing net debt is expected to be between £2.5bn and £3 billion.

“We continue to make good progress in implementing our customer-facing strategy, building on the underlying momentum we had as we entered 2017,” said group chief executive, Iain Conn.

“Customer service is improving, we have launched new offers delivering choice for customers and rewarding loyalty and we continue to develop our technology capabilities. We remain on track to deliver against our 2017 targets.”