British Gas profits fall to £522m due to mild winter despite huge hike in energy prices

British Gas today reported a 30 per cent slide in profits to £522million in the past year - despite putting up bills by a quarter since 2010.
The energy giant claimed mild a spring and autumn had led to a drop in household gas consumption by more than a fifth and a 4 per cent cut in electricity use.

But research by a consumer group showed the main reason people had gone without heating was the massive cost of energy, rather than the weather.
British Gas hiked its prices in December 2010 and again in August 2011 by 24.9 per cent or £256 in total, pushing its average household bill up to £1,286 a year.

It has since cut its electricity price by 5 per cent or £26, after losing 97,000 customers over the course of 2011.
Despite the fall in profits by a nearly a third in its household energy arm, parent company Centrica still reported a 1 per cent increase in operating profits to £2.41billion.

The company's upstream gas and oil exploration business saw profits jump 33 per cent, thanks to higher wholesale gas prices on world markets and good production performance.

Elsewhere, the fall in profits was clawed back through residential services such as boiler repairs, where profits were 10 per cent higher at £264million.
Shadow energy secretary Caroline Flint said: 'People will be shocked that when millions of families are struggling with their energy bills, big energy companies like British Gas are enjoying huge profits.

'By letting the energy giants get away with this, the Government is showing it's out of touch and completely unable to stand up to powerful vested interests in the energy industry.
'Our energy market needs a complete overhaul, but David Cameron can only fiddle at the margins because he's too close to vested interests to stand up for working people.'

British Gas blamed lower household energy consumption on milder winter weather, but other research indicated that hard-pressed consumers were willing to brave the cold rather to keep bills down.

Centrica shares closed at 293.5p on the London Stock Exchange yesterday, valuing the business at £15.2billion.
Adam Scorer, director of policy and external affairs at Consumer Focus, said the results showed that the energy industry is close to recession-proof.

'Healthy profits are still being made despite a big dip in consumption over our mild winter this year.'

He added that consumers needed to be assured that the price they pay is continually fair, and that the competitive energy market is working in their interests.
'British Gas happens to be the most open of all the big six firms. But as long as the market is not felt to be fully transparent, consumers will continue to question every price rise, every profit statement and every explanation as to why bills are so high.'
According to a survey from uSwitch.com, 71 per cent cited the high cost of energy as the main reason they have gone without heating this winter, compared to just under a quarter who said weather was the main reason.British Gas claims it has invested £1.80 for every £1 it has earned over the past five years. Its dividend for shareholders increased 8 per cent to 15.4p a share.

Chief executive Sam Laidlaw said it had been a tough year, 'both for Centrica and our customers', but that the company was still making the investments 'on which Britain's energy future depends'.

23/02/2012 - Dailymail.co.uk

Are you looking to switch energy supplier? Check out the Reduce Comparison Gas & Electricity Comparison Service now!