British Gas issues profit warning as customers flock to small suppliers
The energy supplier also announced that it was unlikely to raise gas and electricity prices for the duration of 2014
British Gas, the UK’s largest energy supplier, has issued a profit warning following the loss of 180,000 customers since January. This is the third profit warning the company has issued in the past five months.
In addition to the loss of customers, British Gas has seen profits fall due to mild winter weather. The average household bill was close to 10% lower than the previous year.
Last September, Labour leader Ed Miliband’s pledge to freeze energy prices should his party win the election, saw British Gas’ parent company’s shares plummet from 400p to 320p.
Price rise unlikely in 2014
In a statement the company said: “Assuming that energy market conditions remain benign, and recognising the competitive conditions in the UK energy supply market, we do not currently expect to change our residential energy prices during 2014.”
The energy supplier raised its prices last November by 9.2%, before reducing them by 3.2% following government instigated cuts to green levies.
British Gas added that profits were expected to return to normal in 2015, as long as there was not another particularly mild winter.
Small suppliers continue to offer best deals
British Gas and the rest of the big six are facing increased competition from independent suppliers. A recent uSwitch survey found 72% of Brits would now switch to a small supplier to save money, up from 56% in 2012.
Both First Utility and Ovo Energy are currently topping the energy best buy tables, by offering dual fuel plans worth less than £1,000. The small suppliers also lowered their prices this year citing favourable wholesale prices, a move which has yet to be echoed by any of the big six.