Under a "root-and-branch" review conducted by the new chief executive, John Harris, who took over in November, Calor is reducing its number of regions from five to three and building a new pounds 5m customer support centre in Leamington Spa, which will open next year.
Mr Harris says the restructure will cost pounds 10m but yield annualised cost savings of the same amount from 1998. "Due to the decline in the cylinder gas market and an increase in competition we needed a thorough review in order to raise our levels of customer service," he said.
He was speaking as Calor reported a sharp slump in operating profits last year due to the warm summer and mild autumn as well as higher gas prices, which rose 11 per cent during the year. Calor was unable to pass the price rises on to customers and margins suffered as a result.
However, Mr Harris said the recent cold snap had boosted gas volumes by 12 per cent since last year, although gas prices were still high.
Calor is undertaking a marketing programme in the South-west, where it is set to compete with British Gas by offering gas supplies to domestic customers.
Although he declined to quantify the level of take-up Mr Harris said he was "quietly confident" that the trial would be a success. The scheme is a joint venture with Texaco.
Separately the company has announced the pounds 20m sale of its 20 per cent stake in PamGas, which distributes gas in Poland, Slovakia and Hungary.
In the year to December, pre-tax profits fell from pounds 49m to pounds 35m. Sales were 11 per cent higher at pounds 288m. The shares fell 1p to 262p.
Calor will now focus its overseas investment on South America, India and the Far East, where use of liquid petroleum gas is not dependent on the weather.Reuse content