A price freeze at SSE, Britain’s second-largest energy supplier, has failed to stop 110,000 customers jumping ship over the past three months, it emerged yesterday.
The FTSE 100 giant admitted it was operating in a “challenging business environment” as its customer base fell from 9.10 million to 8.99 million accounts in the quarter to 30 June. However, it said its full-year earnings per share were likely “to be around or slightly greater than” the 123.4p it reported in 2013.
Britain’s “Big Six” energy companies, which supply about 95 per cent of all household electricity and gas in the UK, have been under intense political pressure in recent months to lower their bills and now face an investigation by the competition regulator. Earlier this year, SSE pledged to freeze household prices until January 2016 in a move that was hailed by the Prime Minister as “hugely welcome”.
At the time, its chief executive, Alistair Phillips-Davies, estimated that the freeze would knock £100m off profits for 2015.
He said yesterday: “Our customers are benefiting from the longest-ever household energy price freeze in the Great Britain market, and good progress is being made in our programme of investment to build, upgrade and maintain the electricity assets customers rely on.
“Although energy market conditions are challenging, we are on course to give shareholders a return on their investment through a dividend increase that at least keeps pace with inflation.”
Reflecting on the investigation by the Competition and Markets Authority, the company said it expected the inquiry to “demonstrate the competitiveness of the energy market”. The CMA is expected to publish its provisional findings next year.
Analysts at the broker Liberum maintained their hold rating on SSE, but said: “We note the good relative performance of SSE versus Centrica [the owner of British Gas] since the turn of the year. SSE has now recovered all its absolute losses and has almost caught up with the relative performance of the FTSE 100 since Labour’s price-freeze idea was announced last September. This compares to Centrica, whose relative performance is still about 25 per cent below market.”
Shares in SSE fell 20p to 1,523p.