THE owner of British Gas ran the gauntlet of public anger today as it revealed a £606 million profit haul at its residential arm months after hiking customer tariffs.
Centrica said an 11% rise in profits at British Gas residential came after last year’s colder-than-normal weather saw gas use leap 12% and in spite of a 1% fall in customer accounts to 15.7 million in 2012.
The results are likely to raise questions over the fairness of energy bill increases after British Gas raised tariffs by 6% for around 8.4 million households at the end of last year.
Group adjusted operating profits rose 14% to £2.7 billion, but Centrica said it paid more than £1 billion in tax and
Ian Peters, managing director of residential energy for British Gas, said: “If I look into the future we have no plans to put prices up even higher, the gas prices are relatively calm.”
Asked on BBC Breakfast how long into the future - and if the firm was committing to not putting prices up - he said: “I can’t do that because the gas market is volatile.
“But right now, as I say, it is very early in the year, we work in a very competitive market and it is not in our interest or our customers’ to put prices up. So we will do everything we can not to do that.
“What I want to say is that we will move heaven and earth to keep our customers’ bills down. We have the lowest bills in the industry.”
Further increases?
Centrica said it was too early to say if customers should be braced for further price hikes this year, but added that there were “upward pressures” in the market after a 13% jump in wholesale gas prices winter for 2012/13.
Chief executive Sam Laidlaw insisted the group needed to make a “fair and reasonable return so that we can continue to make our contribution to society and to invest”.
Centrica stressed that British Gas contributes a fifth of total group profits, with 2012 results also largely driven by a rise 20% in profits at its its upstream gas and oil exploration business to £1.2 billion.
The group said its move to raise prices saw customer numbers fall 1.5% in the second half of 2012 to 25 million, while it added that difficult economic conditions had made it hard to attract new customers and resulted in a 10% fall in boiler installations in 2012 as customers reined in spending.
Profits at British Gas Business fell 9% to £175 million as firms were also hit amid wider economic pressures.
As part of a strategic overhaul also announced today, Centrica revealed plans to expand further in North America and confirmed that British Gas boss Phil Bentley will step down after six years in the top job on June 30 as part of a management shake-up.
US retail boss Chris Weston will take on responsibility for all so-called downstream operations, including British Gas Residential in the UK, while Mark Hanafin will lead the international upstream business.
It said low gas prices “offer a good opportunity for growth” in America, adding that it was on track to double profitability in the US since 2009.