Calor set for move into domestic gas

Calor Group, which already dominates the bottled gas market, will start supplying natural gas to domestic consumers in the south-west of England as part of its plans to become one of the biggest competitors to British Gas.

The move into the domestic market, set to begin when the market is liberalised next April, follows the recent completion of a joint venture deal with Texaco, the US oil group.

Last year, Calor signalled its move into mains gas when it announced plans to supply the commercial and large domestic market along with Alliance Gas, a joint venture betweeen British Petroleum and two Norwegian companies. Howard Robinson, Calor's chief executive, suggested cuts of at least 10 per cent on existing gas bills should be possible.

Mr Robinson's comments came as Calor revealed it had arrested a five- year decline in sales in the six months to June. Underlying turnover was held at pounds 148m in the half-year as Calor pushed through price increases of around 2 per cent, the first rise for nearly 10 years, barring the period of the Gulf war. Over the same period, the group has seen its share of the bottled gas market slide from 65 to about 50 per cent.

The higher prices were not enough to offset a 17 per cent increase in the cost of gas and a 3.6 per cent drop in volumes. The two conspired to pull pre-tax profits down from pounds 31.1m to pounds 26.2m, even after the inclusion of a pounds 2.1m exceptional profit.