Anger as UK gas firm's profits hit 64%
Energy group Centrica was under fire from consumer groups today after profits at its British Gas arm soared 64% at a time of rising household bills.
A rise in profits to £337m (€487.8m) was described as “scandalous” by energy comparison service uSwitch, with the group accused of putting shareholders before customers.
Centrica said it had no plans to raise bills this year after seeing more than a million customers quit British Gas in 2004.
The company said the “required customer tariff increases” – which saw Centrica raise gas bills by 12.4% in September – were among the main reasons for a rise in profit margins.
The performance by British Gas contributed to a 16% rise in operating profits to £1.23bn (€1.8bn) across the wider Centrica group, broadly in line with analysts’ expectations.
Alan Tattersall, head of home services at uSwitch.com, claimed British Gas had used rising wholesale gas prices as a “smoke screen” for extracting higher margins.
He said: “Our view is it is disgraceful that British Gas has been able to squeeze such scandalous profits out of their customers. They are already the Uks most expensive gas supplier and today’s results just reflect how little regard they have for their customers.”
Allan Asher, chief executive of energywatch, said: “Consumers accept that companies need to make profits. What they won’t accept is that the profits come entirely at the expense of consumers, with minimal risk taken by the company.”
The flow of customers leaving British Gas for rival suppliers slowed towards the end of the year and the group was optimistic it would see no net customer losses in 2005.
New products helped keep customers on board, with 600,000 buying contracts that cap prices of fuel for three years.
But chief executive Roy Gardner added: “We expect 2005 to be no less demanding than 2004. Wholesale prices will continue to challenge energy retailers.”
