Energy giant Centrica suffered its worst ever day on the stock market today as it revealed customers are leaving the British Gas owner in their droves.
The company admitted it had lost 823,000 retail customers in just four months, sending the shares tumbling 17% to 134.9p.
The energy supplier joined the growing club of blue-chip companies whose shares tank on profits warnings with the FTSE 100 near all-time highs. Centrica shares have already fallen by two thirds this year.
Chief executive Iain Conn admitted trading in the second half of the year was “disappointing” and slashed the guidance on full-year earnings.
He said: “I remain encouraged by our progress in implementing our strategy. The balance sheet has been materially strengthened, and we continue to focus on improving our underlying performance.”
Analysts had been looking for earnings of 15p a share, but the company said 12.5p for 2017 was now more realistic.
The British Gas parent blamed 650,000 so-called “collective switchers” who went to rival energy suppliers, but also said its decision to raise electricity prices in September by 12.5% had contributed to the customer exodus. Warm weather in October and November has also meant people have used less fuel.
Customer accounts are down 1.2 million to 13.1 million, in the year to date. Centrica also admitted it was experiencing challenges in its business divisions on both sides of the Atlantic.
In North America, “highly competitive market conditions” are putting pressure on power margins and UK cost cuts designed to save £300 million and a programme to reduce staff numbers by 1500 are not yet flowing through to the bottom line.
Centrica was forced to reassure investors that the dividend was safe, saying it remained on track to hit cashflows targets this year.
The energy sector has been under fire from the Government, which wants to cap the price of standard variable tariffs, used by 15 million customers.
Centrica said on Monday it was unilaterally scrapping its standard variable tariff, which is used by about 60% of its customers.
Share prices across the sector have fallen as investors worry that it is difficult to make reliable returns.