By Karolin Schaps
LONDON (Reuters) - Centrica (L:CNA), Britain's largest energy supplier, said on Monday that it had lost another 224,000 customers in the first three months of the year, showing that smaller groups are stepping up efforts to erode the dominance of the industry's "Big Six".
Centrica, which owns energy supplier British Gas, and its largest rivals are losing market share to independent and often cheaper suppliers.
Evidence of increased competition is likely to please the Competition and Markets Authority which last month proposed a price freeze for 4 million households as part of proposals to break the control of the main suppliers.
Centrica said the loss of customer accounts was mainly due to a higher than normal number of users coming to the end of their long-term tariffs. By comparison, it lost only 119,000 customer accounts over the course of the entire year 2015.
Centrica shares were down 2.7 percent at 231.7 pence by 0830 GMT.
Independent suppliers now control 15.4 percent of the dual gas-electricity fuel market, according to data from consultancy Cornwall Energy, up from just one percent four years ago.
Besides Centrica, the "Big Six" comprises SSE (L:SSE), Iberdrola's (MC:IBE) Scottish Power, RWE's npower (DE:RWEG), E.ON (DE:EONGn) and EDF Energy (PA:EDF).
Centrica announced last year it would amend its business strategy to place greater focus on offering new consumer services. It will launch new products in the 'connected homes' part of the business, which includes smart meters or smart thermostats, in the second quarter, a spokeswoman said.
Many utilities across Europe are at a crossroads requiring a new business strategy as the decades-old model of centralised, predictable energy production and consumption is giving way to a modern and more flexible energy system.
Centrica reiterated its full-year targets, with adjusted operating cash flow of more than 2 billion pounds and capital investments of no more than 1 billion pounds.
It also said its UK business had returned to profitability in the first quarter and that net debt had fallen to 4.4 billion pounds, from 4.75 billion pounds at the end of 2015.
Centrica trimmed its dividend payment last year when it was hit hard by weak commodity prices but said earlier this year it could save more if needed to cover dividend payments in 2016.
"Given that future dividend growth has been linked to (smoothed) underlying operating cash flow growth, we see 5 percent annual dividend growth as a realistic minimum from here over the next few years," said Angelos Anastasiou, utilities analyst at Whitman Howard.
To lower costs, Centrica has also announced a gross reduction of 6,000 jobs by 2020. As part of this plan, 3,000 jobs will go in 2016 of which 800 happened in the first quarter.