Profits increase but Centrica gives hint of more price rises

Earnings increased to £356m during the first half of 2013, as the company cashed in on the bitterly cold temperatures after raising tariffs six per cent at the end of last year

Revenues from household supply of gas were up 16 per cent to £3.7bn, compared with the same period in 2012, as Britons cranked up the thermostats.

Average residential consumption by volume was up 13 per cent for gas and one per cent for electricity.

Operating profits at parent company Centrica were up nine per cent from £1.45bn to £1.58bn. The results provoked anger and calls for British Gas to keep a lid on tariffs.

Its profits would have been higher, but they were held back by a new duty to pay for energy efficiency measures in customers’ homes, which helped push environmental costs up 37 per cent for the period.

Centrica warned that the scheme, which has landed it with a £1.4bn bill, would “inevitably impact on customer bills ultimately” and that it was facing “upward pressure on costs”.

Finance director Nick Luff said: “We will keep prices as low as we can for as long as we can. If prices do have to go up, we will delay it for as long as possible.”

He defended the £11m increase in profits for British Gas residential energy supply, saying it represented just 70p per custo- mer.

The company serves more than 11 million households, with nearly 16 million customer accounts.

It pointed out that its profit margin for the residential business fell from 7.2 per cent to 6.5 per cent, meaning that it was making less money as a percentage of its revenues and only increased profits this time because of the unusual weather.

Chief executive Sam Laidlaw said: “With our customers using more gas to stay warm during the unusually cold winter, we are doing everything we can to help them keep their energy costs under control and make bills simpler and clearer.”

But Len McCluskey, general secretary of the Unite union, said: “These profits will anger a growing number of families who are struggling to pay the bills, made worse when the fuel companies hiked their charges last year.

“There should be a commitment from British Gas and the other fuel providers, all of whom have done very well out of the British people, to cut prices for customers this coming winter.”

Mike O’Connor, chief executive of Consumer Futures, called for Centrica to keep a lid on prices after benefiting from the cold weather.

He said: “Wholesale gas prices have not risen significantly and their gas production and much of their generation business has done well.

“Those factors should give British Gas confidence to hold its prices.”

Centrica’s announcement comes just days after MPs warned of deep distrust in energy firms over their tariffs and pro- fits.

Yesterday, French-owned rival EDF announced its profits had risen to a record £903m in the wake of the cold spell.

Elsewhere in the results, the company said that it had added 56,000 British Gas residential energy accounts and added more than a million smart meters throughout UK homes and businesses.

During the period, Centrica bought a 25 per cent stake in the Bowland shale exploration licence in Lancashire operated by Cuadrilla.