Acquisition

Acquisition

Centrica PLC

British Gas to acquire social housing services provider PH Jones

Centrica plc, the parent company of British Gas, today announced that its British Gas Community Energy division has acquired PH Jones Group Ltd, a provider of central heating services to the social housing market, for £30 million in cash.

The deal represents a major step in British Gas' strategy to build its social housing energy services business and help social housing providers across the UK to cut their residents’ energy use, carbon emissions and fuel bills. It follows the announcement in September 2010 of a strategic partnership with Mears¹ to jointly bid on repair and maintenance contracts in the social housing sector.

The transaction includes PH Jones’ social housing business, which provides central heating service and repair for around 250,000 properties under 42 contracts. It also carries out over 8,000 central heating installations every year through 28 contracts within the social housing sector. The acquisition will bring British Gas around 850 employees, of whom approximately 560 work in the Social Housing business. The transaction does not include the Utility Services business previously operated by PH Jones, which will be retained by the vendors.

Social housing represents 20% of the UK’s housing stock (around 5 million homes) and the sector is forecast to spend £3.5 billion a year on energy services by 2012. The market is forecast to grow further, driven by the growth of microgeneration and renewable heating resulting from Government targets to reduce the UK’s carbon emissions by 80% by 2050.

Betsy Bassis, managing director of British Gas Community Energy, said:

"Social housing is a strategically important market for British Gas. It not only represents 20% of Britain’s housing stock, but it is also an early adopter of energy efficiency and renewable technologies.

“We are committed to creating a leading energy services business for the public sector and our focus is on growing successfully through a combination of strong organic growth and our partnership with Mears¹, one of the leading providers of repairs and maintenance in social housing.

“The acquisition of PH Jones significantly accelerates our growth strategy in social housing. PH Jones is a successful, profitable company in this sector and combining its strengths with those of British Gas will deliver important benefits for our customers."

ENDS

Contacts

Centrica Investor Relations: 01753 494 900

British Gas press office: 0800 1077015

Notes to editors

¹ In 2010 British Gas Community Energy announced an arrangement with Mears, a leading provider of repairs and maintenance services to the social housing sector. British Gas and Mears now jointly bid on repair and maintenance contracts in the social housing sector, with British Gas delivering energy services as well as providing access to CERT, CESP, Feed-in tariff and, later in 2011, Renewable Heat Incentive (RHI) funding.

About British Gas & British Gas Community Energy

• British Gas, the biggest energy supplier in the country, is part of the Centrica group of companies. For more information go to: http://www.britishgas.co.uk/.
• British Gas Community Energy works closely with local authorities and housing associations to help reduce carbon emissions and improve the fuel efficiency of social housing and public buildings.
• British Gas employs 28,000 employees across the UK.
• The 850 PH Jones employees joining British Gas add to the 5,100 new jobs British Gas has announced over the past two years in insulation, smart metering and energy efficiency.