Saturday, 28 July 2012

Centrica defends 23pc leap in British Gas energy profits

Centrica defended a 23pc surge in profits at its British Gas household division, insisting the jump was due to the comparison with a “weak” 2011.

Chief executive Sam Laidlaw refused to bow to demands to cut energy prices - amid analyst predictions that Centrica was likely to increase its consumer tariffs.

Operating profits in the British Gas division rose to £345m in the six months to the end of June. The rise contributed to a 15pc increase in group profits, to £1.45bn for the period.

Ann Robinson, at, said: “These soaring profits show that British Gas could and should cut its prices ahead of winter.”

Mr Laidlaw insisted the criticism was “purely because people have landed on a comparison with a prior year that was particularly weak”.
Profits had been low in the first half of 2011 due to an unusually warm winter, and gas consumption had increased again this year, Centrica said.

But gas consumption increased just 3.5pc, with the vast majority of a 21pc leap in gas supply revenues in fact due to increased prices.

Centrica said the bill rises has been needed to cover rising costs of commodities, increased social and environmental levies that it collects for the Government, and higher energy transmission costs, set by the regulator.

Mr Laidlaw said “nobody” he had spoken to felt its British Gas operating margins of 7.2pc - up from 6.9pc in 2011 - were unreasonable.

He added: “Because British Gas residential has got 16m customer accounts, the residential figure is a lot of money. But our profits equate to £3.50 a month per account before tax.”

Profits in British Gas’s business supply division slumped 27pc to £93m, as customer numbers fell. Centrica said this was due to some of the business customers going bust, and some switching supplier.

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