Centrica’s £1bn profit to raise hackles

Utility giant Centrica came under fire from consumer groups after it unveiled £1.3bn in half-year profits – including £270m for its residential arm British Gas – just weeks after announcing a price increase.

Centrica said adjusted operating profits in the six months to June 30 at British Gas fell by 54 per cent compared to the same period last year, as it battled with a 30 per cent increase in wholesale gas prices and lower consumption.

But independent lobby group Consumer Focus said customers did not care which parts of the business made money – they are just worried about the bills.

Hide Ad
Hide Ad

The announcement was expected to anger many consumers coming just a day after British Gas received a record £2.5m fine for poor customer service.

Meanwhile Royal Dutch Shell cashed in on rising energy prices as it reported profits of nearly £5bn between April and the end of June – just two days after BP reported profits of £3.2bn in the three months to June.

British Gas, the UK’s biggest energy supplier, plans to lift gas and electricity prices by an average of 18 per cent and 16 per cent respectively from August 18 to counteract soaring costs.

Centrica, which posted a 19 per cent decline in adjusted operating profits from £1.6bn in the same period last year, said the hikes were essential if British Gas was to make a profit this year.

Hide Ad
Hide Ad

But its upstream gas exploration and production arm – which benefits from higher wholesale prices and includes assets in the North Sea and Trinidad and Tobago –posted a 14 per cent increase in profits to £414m.

Audrey Gallacher, director of energy at Consumer Focus, said Centrica “seems to win whether wholesale costs are high or low”.

She said: “Retail profit margins may have been reduced by recent increases in wholesale prices - but as they are also major gas and electricity wholesalers, they can still make healthy profits at the other end.”

The increase comes at a time when household incomes are becoming increasingly squeezed by high inflation and muted wage growth.

Related topics: