Centrica chief Sam Laidlaw rejects break-up calls as British Gas profits fall

Laidlaw says it is essential that the group remains intact to compete in global market

Centrica boss Sam Laidlaw has rejected calls for his company to be broken up as he unveiled a 6 per cent drop in profits at the group’s British Gas  residential supply arm.

Speaking in the week after Energy Secretary Ed Davey suggested British Gas could need to be broken up because of its large market share and high supply profit margins, Laidlaw said it was essential that the group remain intact if it is to compete in  global markets.

He was speaking as British Gas reported a decline in household supply profits to £571 million, despite hiking prices by 9.2 per cent in November, as the milder winter meant customers used less heating.

The warm winter meant that British Gas’s residential profits fell by 18 per cent in the second half of 2013 — a decline that helped drag down the  bottom line of its parent company by 2 per cent to £2.7 billion for the full year.

The group’s 2013 profit was also hit by a £133 million loss from its gas-fired power stations in the UK and  falling returns in North America, where profits from the supply arm tumbled by 36 per cent to £77 million. Meanwhile, profits at Centrica’s oil and gas production arm jumped by 23 per cent.

Unveiling the results, Laidlaw stressed the benefits of British Gas and parent company Centrica remaining whole. “The benefit of integration is actually that because we have the size and scale that we have we are able to contract new supplies for the UK, we are able to shield our customers from very volatile commodity prices,” he said.

“You have to be an integrated company if you’re going to be a sizeable retailer.” He added that Centrica would not have been able to sign £14 billion of crucial new gas supply agreements for the UK last year, with Cheniere of the US and Qatar, if the company had been broken up.

Centrica also announced today that it lost 362,000 customer accounts last year — 2 per cent of its total — after  hiking prices, and has lost a further 100,000 so far this year.

Laidlaw cited the exodus as evidence that the market was working well and did not need to be overhauled.

He also criticised Labour leader Ed Miliband’s pledge to freeze energy prices for two years if elected prime minister and said “the prospect of political intervention and a wide range of potential policy initiatives has damaged investor confidence”. Shares in Centrica rose by 2.1p to 316.11p.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003