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Centrica has seen its share price fall by 7% on Thursday after disclosing that it had lost 372,000 home energy customers in the four months to October in its latest trading report.
The company blamed its loss in customers to increased competition, which has led to a high degree of consumers switching provider.
‘As we have done over the last four years, we are focused on driving significant underlying improvements in performance and delivering attractive returns while re-positioning the portfolio towards the customer,’ Centrica Group CEO Iain Conn said.
‘Our efficiency delivery and new customer propositions are helping to offset the effects of strong competition and regulation in energy supply.’
UK energy suppliers see increased competition
Competition in the UK energy supply market has increased significantly after the country’s regulator Ofgem made it easier for smaller providers obtain licenses to enter the market, giving consumers more choice and access to cheaper energy prices.
In fact, a 25% of all customers in the UK have their energy supplied by small and medium-sized suppliers, with many switching away from larger names, according to the UK regulator.
However, the regulator recently admitted that it may have gone too far and it proposing to tighten licensing rules that will require new entrants to demonstrate that they have adequate financial resources and can meet customer service obligations.
Centrica expects strong finish to the year
Despite the company’s share price taking a tumble, it remains optimistic that it will close out the fiscal year on high, with adjusted operating profit and EBITDA expected to come in above 2017 levels.
‘Our financial performance has remained resilient despite weaker than planned volumes from our E&P and Nuclear activities and cash generation remains strong,’ Conn said.
‘Maintaining a focus on performance delivery and financial discipline and demonstrating resilient cash flows remain our objectives for 2019 and beyond, as we deal with the impact of the UK energy supply default tariff cap,’ he added.