British Gas lost 399,000 customers last year as increasing numbers switched to smaller competitors.
Earnings slid to £507m in the six months to 30 June, from £587m a year earlier, the company announced. Revenue fell 13 per cent to £13.4bn and operating profit fell by 12% to £853m amid lower prices and a customer exodus.
Gas prices are about 15 per cent lower than this time last year, when Centrica, which owns British Gas, set out a cost-reduction strategy that involved cutting its workforce and holding back on gas exploration.
“The first half of the year has been demanding,” Iain Conn, chief executive, said on Thursday in a statement. “I remain confident in our ability to deliver both attractive returns and underlying cash flow growth.”
In a survey conducted by consumer magazine Which?, British Gas achieved a satisfaction score of just 54 per cent and is in 15th place, in a gas and electricity market that is dominated by six big players. The top spots are dominated by smaller, independent suppliers such as Ovo Energy and Utility Warehouse.
Although British Gas has reduced prices this year, it was slower than rivals to pass on the benefit of lower wholesale gas prices.
Claire Osborne, energy analyst at uSwitch.com said: “Energy suppliers big and small continue to eat away at British Gas’s market share. The only way that British Gas can start to win back customers is by launching new, competitive deals.”
The company said that it had begun to stem the loss of customers in June as the impact of its March price cut filtered through to customers’ bills.
Centrica said it had cut costs by £141m during the six-month period. The utility’s strategy includes cutting 6,000 staff by 2020, including 3,000 job cuts by the end of 2016.
Register for free to continue reading
Registration is a free and easy way to support our truly independent journalism
By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists
Already have an account? sign in
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies