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British Gas profits jump to £571m
British Gas has today reported annual profits of £571m at its residential arm, up from £95m in 2006
Centrica, British Gas parent company, announced group pre-tax profits for last year of around £2.1bn.
Last month, British Gas said it would raise the amount it charges for gas and electricity by 15% for domestic customers in the UK. This move has been criticised by consumer groups and energywatch.
The announcement of price increases followed increases from rivals Npower and EDF Energy, who blamed rising wholesale costs.
But why Rising prices
Operating profits across the Centrica group rose 40% to £1.95bn.
Chairman for Centrica Roger Carr said: "Centrica delivered very strong financial results during another challenging year for UK energy retailers."
The company said it had worked "diligently" to minimise the impact of rising wholesale energy prices in the latter part of 2007.
Centrica said two-thirds of the group's earnings were made in the first half of 2007, when wholesale gas prices were falling.
British Gas did reduce customers' bills in March and April 2007, but consumer group Energywatch says energy companies did not pass on the full reduction to householders.
This particularly affected business customer who would have been tied to fix term contracts on higher rates than the market at the time.
It has called for a Competition Commission investigation into the way the energy market works.
Centrica said customer service at British Gas had "significantly improved", with 200,000 customers returning in the second half of last year.
Overall the number of gas customers fell in 2007 by 2.4% to just over 10 million, while the numbers of electricity customers rose by 4.5% to just over six million.
Centrica has increased its full-year dividend to shareholders by 17% to 13 pence per share, a move criticised by consumer group Energywatch.
"It is perfectly true that there is volatility in wholesale energy markets. But it seems equally true that such volatility hits consumers not shareholders," Adam Scorer, Energywatch director of campaigns said.
"Consumers will feel justified in claiming that they are being taken for a very rough ride by energy companies," he added.
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