Centrica acquisition

Centrica PLC
05 August 2002


5 August 2002

Acquisition reinforces Centrica's position in the commercial market

Centrica plc today announced that its subsidiary British Gas Trading Ltd has
acquired Electricity Direct (UK) Ltd, the UK's largest independent commercial
electricity supplier, for a cash consideration of £49.5 million. In addition,
Centrica will assume net debt of £13.5 million. The acquisition means that
Centrica is now the third largest commercial electricity supplier with nearly 20
per cent of the market.

Electricity Direct provides electricity to around 97,000 customers (as defined
by supply points), with an average annual consumption of 40,000 kWh and an
average annual bill of about £2,000, which is nearly eight times that of a
domestic customer. The Electricity Direct customer base will add 4.5 TWh of
annual load to the existing Centrica commercial volume.

Electricity Direct started trading more than three years ago. For the year ended
31 March 2002, turnover was £214.4 million, up from £126.3 million in the
previous year, and operating profit was £7.4 million. Its customer base is
mostly comprised of customers on fixed price contracts, with durations of up to
five years. Electricity Direct has in place fixed cost electricity purchase
contracts which will remain in place following the acquisition. These contracts
secure the retail margins in the business for existing contracted customers.

The acquisition strengthens Centrica's presence in the commercial market and
offers further opportunities to cross-sell a range of additional products and
services. Centrica will focus on small and medium enterprises, offering these
businesses a similar range of products and services to those targeted at
residential customers under the AA, British Gas, Goldfish and One.Tel brands,
tailoring them to suit individual business requirements.

At the end of last year, Centrica acquired commercial electricity supplier Enron
Direct which has already exceeded profitability targets for the current year and
is expected to be fully integrated within Centrica by September.

These acquisitions complement Centrica's success in winning almost nine per cent
of the commercial electricity market through organic growth, since the
introduction of full competition in 1999. From a standing start, Centrica has
become one of the main participants in this market, successfully competing with
sizeable incumbent suppliers. During the last twelve months, Centrica
experienced an organic customer growth rate of 60 per cent in this market.

Sir Roy Gardner, Chief Executive of Centrica, said: 'We already have a leading
position in the residential market and that is where we want to be in the
commercial sector. Today's announcement shows our commitment to becoming the
number one supplier in this market. The acquisition of Electricity Direct is
another significant building block as Centrica develops the range of products
and services we offer businesses.

'On completion, we will have more than three quarters of a million commercial
energy customers, of which over 475,000 will be commercial electricity
customers.'



Notes to investors and editors:

 1. Centrica is acquiring around 55,000 contracts over a total of 87,000 sites
    and 97,000 supply points.
 2. The figures for average consumption and average bills exclude approximately
    1,000 Half Hourly billed customers who typically have much higher
    consumption rates, but lower margins.
 3. Net debt includes cash deposits with Distributors, Pool and Energy Suppliers
    amounting to £16.8 million.



Enquiries:

Centrica Media Relations: 01753 494085

Centrica Investor Relations: 01753 494900




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