British Gas reports bumper profits despite energy costs plummeting

British Gas has angered customers after reporting operating profits up 31 per cent for the year

Clare Hutchison,Hazel Sheffield
Thursday 18 February 2016 09:28
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British Gas was the most recent of the six biggest energy firms in the UK to cut prices for customers
British Gas was the most recent of the six biggest energy firms in the UK to cut prices for customers

British Gas has angered customers after reporting operating profits up 31 per cent for the year, despite a warm winter and plummeting wholesale gas prices that many feel should be reflected on their bills.

It made £574 million in operating profit from residential energy supply in the year to December 31.

This was 31 per cent up from operating profit of £439 million in 2014, "with consumption returning to more normal levels following a mild 2014".

British Gas was the most recent of the six biggest energy firms in the UK to cut prices for customers by a further 5.1 per cent last week.

E.On, EDF, SSE, Scottish Power and Npower have all cut gas prices by similar amounts.

Customers say that a 41 per cent fall in wholesale gas prices in 2015 should be better reflected on their bills.

Iain Conn, chief executive of Centrica, told the BBC: "I want to assure our customers that we have passed on the 40 per cent cost in gas prices with a 10 per cent cost in the bill."

He added that the price of gas only makes up a proportion of the bill.

Fall gas prices were blamed for lower revenues at British Gas parent company Centrica.

Total group revenue was down 5 per cent at £28 billion, while adjusted operating profit was down 12 per cent at £1.5 billion.

Centrica has been cutting costs to adapt to the "challenging environment" and last week said it would axe around 500 jobs.

Centrica also said it would cut the dividend by 11 per cent to 12p per share from 13.5p per share last year.

The Competition and Markets Authority has been investigating the way that energy suppliers charge customers since last year.

It estimates that consumers overpaid by £1.2bn a year between 2009 and 2013.

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