Centrica sets sights on 4m customers

CENTRICA, THE supply arm of the old British Gas, yesterday set out plans to capture four million electricity customers and pay shareholders their first dividend since the de-merger from BG 18 months ago. The ambitious targets came as Centrica reported its first pre-tax profits since its creation as a separate company.

In the first six months of this year it made a pounds 90m profit against losses of pounds 149m in the same period of 1997.

With the launch of electricity competition just three days away, Roy Gardner, Centrica's chief executive, disclosed that it has signed up 440,000 customers already with its offer of a 12 per cent cut in electricity bills. It expects the number to reach 500,000 by the end of this month. But he said that in the longer term, Centrica was aiming for 15-20 per cent of the market, which would give it between 3.6 million and 4.8 million of the country's 24 million domestic consumers.

Centrica's marketing costs spent attacking the deregulated energy market will reach pounds 80m this year against pounds 55m last year.

Electricity industry executives have put a much more modest estimate on the number of customers who will switch, forecasting that only 10 per cent of the market will change suppliers.

Mr Gardner ruled out a bid for London Electricity, which has been put up for sale by its US owners, Entergy. But he said Centrica was keen to acquire power stations, indicating that it was interested in building up a portfolio of as much as 4,000 megawatts.

Centrica estimates it has captured 15,000 to 20,000 of the 750,000 households covered by the first wave of electricity liberalisation, starting on Monday.

Centrica's share of the domestic gas market has fallen to 85 per cent but in areas where competition has been established the longest it is down to between 70 and 75 per cent.

However, Mr Gardner said Centrica was now beginning to win back customers at a faster rate than it was losing them, producing a net gain in market share.

The turnaround into profit was largely due to a sharp fall in exceptional charges related to Centrica's North Sea take-or-pay gas contracts. These charges fell from pounds 252m in the first half of 1997 to pounds 35m in the same period this year.

Centrica will also be helped this year by a fall in the average cost of the gas it purchases from 19p to 17p a therm against a current spot market price of 13p.

However, at the operating level, Centrica also improved its performance, raising profits from pounds 89m to pounds 110m.

The improvement came despite a warm winter, increased marketing costs and a pounds 14m expenditure on computer systems linked to the opening of the domestic energy markets.

Decisions on how to return cash to Centrica's 1.3 million shareholders - almost certainly through a special dividend - will be taken towards the end of this year.

Arts and Entertainment
'A voice untroubled by time': Kate Bush
musicReview: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
Life and Style
Cooked up: reducing dietary animal fat might not be as healthy as government advice has led millions of people to believe
healthA look at how governments started advising incorrectly on diets
News
peopleJustin Bieber accuses papparrazzi of acting 'recklessly' after car crash
Life and Style
tech
PROMOTED VIDEO
Life and Style
tech
News
people
Voices
voices
Sport
Roger Federer is greeted by Michael Jordan following his victory over Marinko Matosevic
tennisRoger Federer gets Michael Jordan's applause following tweener shot in win over Marinko Matosevic
Arts and Entertainment
Oppressive atmosphere: the cast of 'Tyrant'
tvIntroducing Tyrant, one of the most hotly anticipated dramas of the year
News
i100
News
Ukrainian Leonid Stadnik, 37, 2.59 meter (8,5 feet) tall, the world's tallest living man, waves as he poses for the media by the Chevrolet Tacuma car presented to him by President of Ukraine Viktor Yushchenko in Kiev on March 24, 2008.
newsPeasant farmer towered at almost 8'5'' - but shunned the limelight
News
Walter Matthau and Jack Lemmon in ‘The Front Page’, using an old tech typewriter
media
Life and Style
Could a robot sheepdog find itself working at Skipton Auction Mart?
techModel would allow robots to be programmed to control crowds and save people from burning buildings
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
News
i100
Arts and Entertainment
Suha Arraf’s film ‘Villa Touma’ (left) is set in Ramallah and all the actresses are Palestinian
film
Sport
Angel Di Maria poses with Louis van Gaal after signing for Manchester United
sportWinger arrives from Real Madrid and could make debut on Saturday
Arts and Entertainment
Kingston Road in Stockton is being filmed for the second series of Benefits Street
arts + entsFilming for Channel 4 has begun despite local complaints
Arts and Entertainment
Hooked on classical: cellist Rachael Lander began drinking to combat panic attacks
musicThe cellist Rachael Lander’s career was almost destroyed by alcohol she drank to fight stage fright. Now she’s playing with Elbow...
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Client Services Executive / Account Executive - SW London

£23000 - £26000 per annum: Ashdown Group: Account Executive / Client Services ...

PA to CEO / Executive Secretary

£36000 - £38000 per annum: Ashdown Group: Executive PA to CEO & Executive Dire...

Generalist HR Administrator, Tunbridge Wells, Kent - £28,000.

£25000 - £28000 per annum: Ashdown Group: Generalist HR Administrator - Tunbri...

Senior C# Developer (.NET, C#, JMS, TDD, Web API, MVC, integrat

£45000 - £75000 per annum + benefits+bonus+package: Harrington Starr: Senior C...

Day In a Page

Kate Bush, Hammersmith Apollo music review: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it

Kate Bush shows a voice untroubled by time

A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
Robot sheepdog technology could be used to save people from burning buildings

The science of herding is cracked

Mathematical model would allow robots to be programmed to control crowds and save people from burning buildings
Tyrant: Is the world ready for a Middle Eastern 'Dallas'?

This tyrant doesn’t rule

It’s billed as a Middle Eastern ‘Dallas’, so why does Fox’s new drama have a white British star?
Rachael Lander interview: From strung out to playing strings

From strung out to playing strings

Award-winning cellist Rachael Lander’s career was almost destroyed by the alcohol she drank to fight stage fright. Now she’s playing with Elbow and Ellie Goulding
The science of saturated fat: A big fat surprise about nutrition?

A big fat surprise about nutrition?

The science linking saturated fats to heart disease and other health issues has never been sound. Nina Teicholz looks at how governments started advising incorrectly on diets
Emmys 2014 review: Can they genuinely compete with the Oscars

Can they genuinely compete with the Oscars?

The recent Emmy Awards are certainly glamorous, but they can't beat their movie cousins
On the road to nowhere: A Routemaster trip to remember

On the road to nowhere

A Routemaster trip to remember
Hotel India: Mumbai's Taj Mahal Palace leaves its darker days behind

Hotel India

Mumbai's Taj Mahal Palace leaves its darker days behind
10 best pencil cases

Back to school: 10 best pencil cases

Whether it’s their first day at school, uni or a new project, treat the student in your life to some smart stationery
Arsenal vs Besiktas Champions League qualifier: Gunners know battle with Turks is a season-defining fixture

Arsenal know battle with Besiktas is a season-defining fixture

Arsene Wenger admits his below-strength side will have to improve on last week’s show to pass tough test
Pete Jenson: Athletic Bilbao’s locals-only transfer policy shows success does not need to be bought

Pete Jenson: A Different League

Athletic Bilbao’s locals-only transfer policy shows success does not need to be bought
This guitar riff has been voted greatest of all time

The Greatest Guitar Riff of all time

Whole Lotta Votes from Radio 2 listeners
Britain’s superstar ballerina

Britain’s superstar ballerina

Alicia Markova danced... every night of the week and twice on Saturdays
Berlin's Furrie invasion

Berlin's Furrie invasion

2000 fans attended Eurofeurence
‘It was a tidal wave of terror’

‘It was a tidal wave of terror’

Driven to the edge by postpartum psychosis