Centrica profit falls as UK customers switch suppliers

By Susanna Twidale

LONDON (Reuters) - Centrica (CNA.L), Britain's largest energy supplier, said it had lost 399,000 customers in the first half of the year, contributing to falls in revenue and profit.

Britons have grown increasingly dissatisfied with high bills and poor customer service, leading more to switch suppliers to independents outside the traditional 'big six'.

Centrica's results come a week after Britain's second-biggest energy supplier SSE (SSE.L) said it had lost 50,000 power and gas customers in the three months to June 30.

Centrica said its drop, which represents around 3 percent of its customers, was partly due to a number of people coming to the end of fixed-term contracts, adding it returned to account growth in June following the launch of new contracts.

The group said this month it would offer free electricity on either Saturdays or Sundays to its British Gas customers who have installed smart meters.

"What we are trying to do is give people what they want, and what they want is more than just a commodity relationship," CEO Iain Conn said during a press briefing.

He said the company has installed around 2.5 million smart meters, which show customers and the company the cost of energy and how it is being used in nearly real time.

The big suppliers have seen their market share drop to 84.6 percent in the dual-fuel (gas and electricity) market, compared with 99 percent four years ago, according to data from consultancy Cornwall Energy.

Conn said 44 energy suppliers were now registered or seeking registration compared with around 25 two years ago, but smaller suppliers may struggle if commodity prices improve.

"Given our gas purchasing capabilities we will be able to withstand the increase in commodity prices for longer than the competition," he said.

Revenue fell 13 percent to 13.38 billion pounds ($17.67 billion) in the first half, compared with the same period last year, with adjusted operating profit down 12 percent at 853 million pounds.

Centrica said Britain's decision last month to leave the European Union would have a limited short-term impact on it though consumer confidence, interest rates and foreign exchange.

Conn said its gas supply contracts with countries such as Norway, Qatar and Russia, were priced in pounds and would not need to be renegotiated following Brexit.

Earlier this month Centrica said a shut down at its Rough gas storage site could last until March or April next year, although it hopes withdrawals from some of its wells could restart in November in time to offer supply for winter.

Centrica said the results included a 144 million pound post-tax impairment charge relating to the gas storage site, and that it expects the site to report an operating loss for the year.

Centrica shares were up 1.2 percent to 244.6 pence at 0858 GMT.

($1 = 0.7572 pounds)

(Editing by Adrian Croft and Alexander Smith)