Npower starts to stem customer exodus

Supplier’s digital-first brand reports “rapid” growth in first half results

Big six supplier Npower gained domestic 50,000 customers in Q2 of 2017, mitigating the loss of 170,000 accounts in the first three months of the year, largely following its February price rise.

The recent uptick means total household customer losses of 120,000 over the first half of 2017. Meanwhile the supplier's industrial and commercial base held steady and its SME customer numbers dropped by 20,000.

Npower chief executive Paul Coffey said the second quarter had brought “new customers every month” for the domestic retail business “bucking the broader industry trend seen by many of our competitors."

Npower’s new “digital-first” brand, Powershop, saw notable progress over the first half of the year.

Coffey said: “Since its launch in January 2017, Powershop has already acquired close to 10,000 electricity customers, adding an average of 2,000 new accounts per month since April 2017”.

The chief executive claimed this “rapid” expansion shows a positive response to Powershop’s “innovative” approach to managing energy costs.

He added: “This growth trajectory looks set to accelerate further as it launches its dual fuel offering early next year.”

Revenues and adjusted earnings were both down for the first six months of 2017, compared to the same period last year.

Npower said warm weather and a reduced number of customers on standard variable tariffs were responsible for the £203m revenue drop.

Meanwhile a £78m reduction to adjusted EBIT was attributed to “higher industry costs, which have only been partially offset by our price increase in March”.

Npower declined to comment on the specific impact of smart meter costs on its business.

Earlier this week, Eon cited the smart meter programme as a growing cost burden in its first half results, while British Gas named the programme as a driver behind its recent 12.5 per cent increase to the cost of its standard electricity tariff. 

Author: Jane Gray,
Channel: Finance & investment

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