The bleak prediction from the owner of Britain’s biggest energy provider comes as it was revealed another 370,000 customers have quit the supplier. The price cap on energy bills is due to take effect on January 1, with Centrica braced for an earnings hit in the first three months of 2019. It said while the ongoing impact of the cap is in line with previous forecasts, the regulator’s recent revisions to calculation changes meant it would take the one-off earnings hit in the initial period after the cap comes into effect.
Intense competition from rivals and a second price hike saw another 372,000 gas and electricity customers ditch British Gas in the four months to the end of October.
The customer account losses came as it moved customers off standard variable tariffs (SVTs) ahead of the price cap.
British Gas has 3.1 million customers on its SVT, down from 4.3 million at the start of the year.
The company said it expects this to reduce further to below 3 million by the end of the year.
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Centrica said that despite “competitive trading conditions”, it remains positive and expects to deliver 2018 results in line with forecasts, with underlying earnings set to be higher than in 2017.
Iain Conn, Centrica group chief executive, said: “Our efficiency delivery and new customer propositions are helping to offset the effects of strong competition and regulation in energy supply.”
How will the price cap on energy bills affect you?
Announced by regulator Ofgem, the cap will kick off from January 1 and will initially be set at £1,137 per year for a typical dual fuel customer paying by direct debit.
It is thought households will save around £76 per year on average, with those on the most expensive tariffs saving £120.
But the energy regulator said the cap could rise in April 2019, reducing the annual saving.
Even with the price cap, experts suggest customers should not remain complacent over their energy bills and maintained more money can be saved by switching.
Alex Neill of Which? said: ”While the price cap will ease the financial burden for some households, people shouldn’t be lulled into a false sense of security that it will mean they are getting the best deal.
“Switching is still the best way to save money on your energy bills.”