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Centrica profits up but...

British Gas profits fall in customer exodus

British GasBritish Gas, trading as Scottish Gas north of the border, lost 3% of customers in the first half of last year, leading to an 11% fall in annual profits.

It recently announced it was freezing its standard tariffs until August. But operating profits at the household division fell from £623 million to £553m.

The customer tail-off was in spite of a 5% cut in the residential gas tariff, making British Gas one of the cheapest standard variable dual fuel tariff providers in the market.

Parent group Centrica said it has returned to profitability after making a large loss in 2015.

Revenue slipped 4% in 2016 from £28bn to £27.1bn, but statutory profit was £2.5bn – up from a loss of £857m in 2015.

Chief executive Iain Conn said: “2016 was a year of robust performance and progress in implementing our customer-focused strategy.”

Centrica largely attributed to its 2016 profit rise to increasing demand from business customers and a strong performance in energy marketing and trading – sourcing and trading gas.

Complaints per 100,000 customers have fallen across all its main markets.

In its UK Home division complaints have fallen by 31% for its energy supply business and 17% for its energy services business.

British Gas is launching a loyalty scheme to reward existing customers.

Centrica’s headcount reduced by more than 3,400 in 2016, more than half of the expected total reduction of around 6,000 over the duration of its efficiency programme.

It expects a further £250m of efficiency savings in 2017, with direct like-for-like headcount expected to fall by around a further 1,500 by the end of 2017.

These savings will come from a combination of 2016 annualised benefits and further initiatives in 2017.

The directors propose a final dividend of 8.4p per ordinary share.

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