Mild weather hits Centrica profit forecasts
Thursday 17 November 2011
Britain's mild start to the winter and the impact of bill hikes today forced British Gas owner Centrica to scale back its profit forecasts.
The energy supplier said average residential gas consumption was 17% lower this year compared with a year ago, with electricity usage down by 3% after the unusually warm weather in recent months.
The number of customer accounts has also fallen to 15.9 million from 16.1 million in the summer after the UK's biggest energy supplier lifted gas and electricity prices by an average of 18% and 16% respectively from August.
Centrica said it now expects operating profits for 2011 will be marginally lower than current market expectations of £2.6 billion, a figure which compares with a surplus of £2.4 billion in 2010.
Prior to today's update, analysts had expected a 20% fall in profits at the British Gas Residential business to around £600 million.
It said wholesale gas and oil prices were 26% higher this winter than last year and added that its residential business was loss-making prior to the announcement of higher tariffs.
Average consumption by business customers has also been affected by the mild weather and weak economic conditions, with a reduction in usage of 15% for gas and 12% for electricity.
In residential services, the number of central heating installations was 10% lower than a year earlier.
While this is better than the overall market, Centrica announced yesterday it will cut around 850 jobs after reviewing resource levels in its services business.
The move is part of an ongoing review to identify cost savings across the group, including in its UK power generation division.
Mark Todd, director of price comparison service Energyhelpline, said people were increasingly turning down their heating to save money because they could not afford their energy bills.
He added: "This trend occurred after the 2008 price rises and it appears to be happening again.
"British Gas has been losing customers of late and, in order to turn this around, we urge them to cut their prices at the earliest opportunity.
"Consumers want low-cost tariffs and any company that offers these will gain lots of new customers."
- 1 Which country would be hardest to invade?
- 2 The man who filmed the Freddie Gray video has been arrested at gunpoint
- 4 How the language you speak changes your view of the world
- 5 Royal baby girl born: Duchess of Cambridge's second child will be a princess thanks to Queen
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: SNP and its activists 'openly racist' towards the English, Farage says
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...
£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...
£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...
£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...