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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

British Gas is unlikely to raise prices in 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.

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  • Mr b

    I changed to Co-op about a year of so ago, never been more pleased

  • John

    Switched to one of these smaller companies, had nothing but problems, customer service was terrible. Switched back to npower, brilliant customer service always explain everything, might not be the cheapest but would rather pay a little bit more and get good service, you get what you pay for

  • Bugzy

    The big six don’t care about losing customers……it’s a cartel and they have stake in all these do called small providers. I bet they are laughing at their own customers!

  • I honestly don’t feel sorry for them at all……. Always extremely high prices and astronomical post tax profits…. A couple of years in the ‘dog house’won’t hurt them.

    I switched from British Gas after forever growing bills (despite my usage remaining the same) every quarter. I switched TO SparkEnergy, lowered bills, a couple of hiccups along the way but I’ve found the customer service top-notch, if I have a question, some one is always there with a solution or help.

  • petegeoff

    I found First Utility and Ovo no better on price than my supplier, EON. In fact one was more money! EON service also very good.

  • drew

    I have been with OVO for four Yeats now, even converted other friends and family to join. British Gas are as disgrace

  • DT

    I don’t like the big 6 ,I left b/gas for the co-op a bit cheaper but I feel that the big company’s just like the big banks own the smaller company’s ,for all I know b/gas might own the co-op so indirectly they could still be getting my custom but it made me feel good leaving one of the robbing big 6.lets hope their shares take a massive tumble.

  • D B E

    I have just changed to Npower from First Utillity ,a slight hickup changing both gas and electric but going through now ok. Wanted to stay with First Utillity they had the cheapest tarif at the time,with avice from Uswitch, but because I already was a customer they would not accept me. I saved £219 with Npower .

  • Dont expect any sort of customer service from First Utility – I had been with them for years and they failed me big time – I got compensation of 30 quid (wow!) and cheapish energy during that time but bills were impenetrable with one quarter of 500 quid then a credit for 180 they were in meltdown with their software/invoicing system at this time I just had to quit them for my peace of mind – ended up not believing their bills – have moved now to Ovo – seems prices can be held lower byt these new entrants but at cost of poor customer service – hope Ovo can hold it together as they grow customer base

  • Dannny_boy

    Moved from British has to OVO, saved over £600. I wish I had checked earlier, British Gas were probably overcharging me for years!

  • Geoffus

    British Gas deserve to lose its loyal customers they are only interested in making vast profits. The more people that move will put them in a position to think again about its customers or face being one of the smallest suppliers and may even lose share holders. I was with them 40 years thinking they would compete and keep my energy bills down. I ended up moving and got cheaper energy. You get all you deserve British Gas.

  • Energyrapage

    The only way things change is to take action via the ombudsman service, I strongly encourage anyone with a valid complaint to pursue this route. In my experience regardless of supplier, until this happens they all verge on extortion and service is mostly non existent.

  • John

    Do the small companies have there own meter fixers ? Meter readers ? Good call centres ?
    Eon are still not far off price wise and I’d say there better at all the other things that are above.

  • Rich

    Hi. Competition is what all the energy and other public utilities need regardless of size because as the smaller suppliers get bigger, it would be very naïve to think that they would not raise their prices, after all they will in time have their own shareholders to “feed”. I may not be a customer of Centrica (British Gas) but I do have a relatively large number of shares with them that I have for the long term that give me a very good dividend in as much as they more than cover my energy usage both gas and electric, so I’m on a win win. Perhaps the Big 6 should consider giving free shares to their customers for prompt payment or dare I say it, for actually reducing consumption and saving our energy resources for the future, not to mention also saving the environment.