British Gas sees profits rise 98% in first half of year

[dutchman]

British Gas made operating profits of £585m for the first half of 2010, up 98% on the same period last year.


The company, which supplies gas to more than half of the country's households, won new customers and benefited from the cold winter.

Gas use was 8% above 2009, and the company has added 400,000 more residential customers since then.

However, watchdog Consumer Focus said such a jump in profits would "sound alarm bells".

British Gas, which now supplies almost 16m households, said the almost doubling in profit was thanks to a greater number of customers using more power, alongside an ongoing programme of cost cuts which this year should see another £100m in savings.

Bigger group

British Gas's parent company, Centrica, also saw a big increase in profits, up 65% to £1.56bn.

Its chief executive, Sam Laidlaw, told the BBC: "This is a much bigger group than we had a year ago - a 40% increase in the size of the group as a result of the acquisitions that we did last year."

He said that energy prices had fallen by almost a fifth over the past year after the company cut prices three times.

"Customers' bills, despite the very cold winter, were actually lower this year than they were for the corresponding period last year, and that's because we've reduced our prices three times in the last twelve months by some 17%."

Mr Laidlaw hinted that, near term, price rises were unlikely: "This is a competitive market, so we can't give any signals, but our position has always been to lead the market down and try to delay any price increases as long as we can."

Wholesale energy prices are less than half their peak level reached in 2008, although suppliers have other costs that they have to pay as well as the "raw" energy price.

But the consumer watchdog, Consumer Focus said it was worried that prices would rise further.

Audrey Gallacher, head of energy policy at the organisation, said: "We are concerned that energy firms may actually raise prices this winter. With only small price cuts for customers in the last two years, despite wholesale prices being half what they were at their peak and beginning to fall again, customers will rightly be outraged if this happens."

British Gas's managing director, Phil Bentley, said that prices would have to rise, but over a longer time frame: "Probably unit prices per unit will go up. We're not saying over the next year, but in the long term, it absolutely will."

Future profits

Looking ahead to the full year, the company said the lion's share of the profit had already been made.

Its statement said: "Overall, we expect the full-year results for 2010 to be heavily weighted towards the first half of the year."

It added, though, that its full-year results would be in line with what the market was expecting.

[rebbonk]

As has often been said before, "At least Dick Turpin wore a mask!"

I am a firm believer that all utilities ought to be run as "not for profit" and in public ownership. - We all need to use them.

[StevieG]

The big problem, as I see it, is that nearly all the utility companies are foreign owned and have no financial responsibity to the powers
that be in this country but suspect with the high elec/gas prices they charge the consumers in the UK , we are subsidising their customers in their own countries by means of lower bills