Record £742m profit for British Gas

Centrica's British Gas residential arm made record profits of 742 million pounds last year
12 April 2012

The UK's biggest energy supplier has unveiled a record profit haul just weeks after it hiked bills amid the coldest winter in 100 years.

British Gas, which has nearly 16 million customer accounts, posted a 24% surge in operating profits to £742 million in 2010, two months after the supplier pushed up bills by 7%.

The record takings prompted calls for energy regulator Ofgem, which is leading an investigation into the balance sheets of the major suppliers including Centrica, to refer the sector to the Competition Commission.

Centrica, which also revealed record operating profits of £2.4 billion, up 29%, blamed the price hikes on soaring wholesale prices and said it would create 2,600 jobs in 2011 and commit £15 billion in investment between now and 2020.

Around eight million British Gas customers were hit with a price hike on December 10, lifting an average customer's dual fuel bill from £1,157 to £1,239.

Ofgem found average industry margins on a standard dual fuel tariff rose to £90 in November, from £65 in September, prompting an investigation into the "big six" providers. Its findings will be published next month. Centrica claims British Gas prices were 0.5% lower at the end of 2010 than at the start of the year after the supplier cut bills by 7% in February.

Mike O'Connor, chief executive of watchdog Consumer Focus, said on Thursday: "We need successful energy companies but consumers may look at today's profits and at recent prices rises and question how one justifies the other."

But Centrica chief executive Sam Laidlaw said the company's profits were "for a purpose" and added: "If you invest and make acquisitions you would hope to get a record profit. We've much expanded our upstream business. Nuclear is gathering momentum and offshore wind farms continue to be installed."

Centrica's 2010 performance reflects the first full year's contribution from the acquisition of North Sea gas company Venture and its stake in British Energy, both purchased in 2009.

The company increased its full-year dividend for shareholders by nearly 12% to 14.3p per share.

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