(Reuters) - British Gas owner Centrica (CNA.L) stuck to its financial targets for the year, citing higher energy demand after a cold end to winter and a slowdown in consumer account losses.
The company, which stepped up plans for job cuts and cost savings in February after posting a 17 percent fall in 2017 operating profit, also said there had been “good progress” on the delivery of the next phase of cost efficiency.
Shares of the FTSE 100 company rose as much as 1.7 percent in morning trading and were up 0.5 percent by 0910 GMT. Centrica, which has been refocusing on core customer-facing energy and services business, said that net consumer customer account losses slowed materially despite strong competition.
The company’s UK home energy supply accounts fell by 110,000 this year, much lower than the 261,000 fall a year ago.
British Gas has said it will raise the price of its most widely used standard tariff for customers getting electricity and gas by an average of 5.5 percent from May 29.
Other major suppliers among the “Big Six” who dominate the British energy market have followed suit, prompting criticism from politicians and consumer groups.
Britain said in October it would apply a temporary price cap to all standard variable tariffs (SVT) in the energy market — the basic and most common form of billing — to try to drive down prices.
Centrica said it assumes a temporary cap will be in place by the end of 2018, adding that it continues to believe that price controls are not good for customers.
Centrica said it expects customers on SVT to fall to around 3 million by the end of 2018 from the current 3.8 million. It had about 4.3 million SVT customers at the end of 2017.
The company has been encouraging customers to actively choose one of its fixed-term tariffs instead of the standard variable tariff ahead of the cap.
Morgan Stanley said the proposed tariff cap is the biggest near term risk for Centrica and the brokerage expects legislation to be passed by parliament in the coming months.
Reporting by Arathy S Nair in Bengaluru; Editing by Keith Weir