Almost £760million has been wiped off British Gas owner Centrica, adding to the woes of thousands of shareholders and piling fresh pressure on boss Iain Conn.
The plunge of 9 per cent came after the firm took a hit from the energy price cap and revealed it is being deserted by thousands of households every week.
Centrica lost 373,000 customers in four months, with 3m leaving since 2013. And it must absorb a one-off £70million hit from the price cap.
British Gas owner Centrica’s shares plunged of 9 per cent came after the firm took a hit from the energy price cap and revealed it is being deserted by 3,050 UK households a week
Centrica is one of the most popular stocks with ordinary savers, many of whom bought shares when it was privatised in 1986.
But since reaching an all-time high of 403p five years ago, the stock has dramatically fallen and more than halved in value during the three years under Conn’s leadership. In that time, the chief executive has trousered £8.7million in pay.
The bleak update sent shares tumbling further to close 9.2 per cent, or 13.45p, down at 132.3p last night.
Tough competition from rivals has made switching suppliers easier with the cap of £1,137 for the first quarter of 2019 designed to help millions of families on default tariffs save money.
But Centrica is blaming the cap for job cuts and hits to profits, and it is £68 lower than the sum customers currently pay on British Gas’s standard tariff.
Since the start of the year, the number of households on the standard tariff has fallen from 4.3m to 3.1m, which has hit the company’s takings.
At the same time, the number of customers ditching the firm is accelerating.
David Madden, an analyst at CMC Markets, said: ‘In the last seven years, the number of energy providers has soared by 421 per cent.
Centrica is a part of the old guard, and now new firms are nipping away at their customer base.’
Russ Mould, investment director at AJ Bell, said the dividend yield – the percentage the dividend represents of the company’s share price – signalled investors already thought a cut was coming.
It was at 9 per cent yesterday. He added: ‘Only a return to growth would really reassure on the sustainability of the dividend.’
Centrica said it was aiming to stick to its planned full-year dividend of 12p per share, along with cost savings of £200million and net debt of no more than £3billion.
Conn said: ‘We are focused on driving significant underlying improvements in performance and delivering attractive returns.
Our efficiency delivery and new customer propositions are helping to offset the effects of strong competition and regulation.’