British Gas 2010 profits up by 24%

Thursday, 24 February 2011 09:35

British Gas has announced operating profits of £742 million for 2010, according to its parent company Centrica.

This represents a 24 per cent rise in profits and barely takes into account the seven per cent rise in gas and electricity costs to most British Gas customers that took effect from the second week of December.

Most of the profits were delivered in the early months of 2010 when customers used a lot of energy in response to one of the coldest winters in the last forty years. A price cut in February helped British Gas attract 267,000 new customers in the year to reach a total of 16 million customers.

Commenting on Centrica's 2010 Preliminary results, Scott Byrom, energy manager at moneysupermarket.com, said: "Today's announcement by British Gas' parent company Centrica, reporting a 24 per cent increase in profits to £742 million for British Gas is a real bitter pill to swallow for Britain's hard pressed households who have suffered the double whammy of an extremely cold winter, coupled with high gas and electricity prices. While many customers were struggling to heat their homes and afford their bills it looks as though British Gas was reaping the benefits.

Centrica has said that the decision to raise prices by seven per cent for gas and 5.8 per cent for electricity customers was taken as a result of a 67 per cent rise in wholesale gas supplies and a 29 per cent increase in the cost of wholesale electricity prices.

If the cost to British Gas has increased so much but the increase in charges to consumers is not as great it would appear that the company’s profits will not be as great next year.

The government has announced that energy watchdog Ofgem conducted a review of the retail energy market in November. It is not yet known what their findings were and if any reforms will be implemented to the energy industry as a result.

Scott Byrom added: "Such announcements act as a stark reminder to bill payers that apathy won't be rewarded. It is vital consumers shop around for a better value deal as soon as possible to ensure they don't continue to pay over the odds for their energy.”

Ann Robinson, Director of Consumer Policy at said: "Soaring profits will be cold comfort to British Gas customers who were slapped with a price hike at the beginning of the winter and have been feeling the impact ever since.

According to uSwitch average energy prices have doubled since 2004 when the average annual bill was £543. The average annual bill is now £1,097.

However, the high prices are not just confined to British Gas. The current average annual bill for the other major players in the UK energy industry, EDF, E.ON, npower, SSE and Scottish Power all come in at a slightly higher cost than British Gas, according to recent research from uSwitch.

The results helped Centrica to achieve pre-tax profits of £2.8bn, with operating profits up 29 per cent to £2.4bn.

Use Myfinances.co.uk comparison tools to find a better deal on your gas and electricity.
 

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