British Gas profits boosted by colder weather
- 27 February 2013
- From the section Business
British Gas has reported a rise in profits for 2012 after colder weather led to people using more gas.
Profits from its residential energy supply arm rose 11% from a year earlier to £606m. It said gas consumption had risen by 12%.
But there has been some criticism that the company increased its prices in November when profits were rising.
Centrica, which owns British Gas, reported an adjusted operating profit of £2.7bn for 2012, up 14% from 2011.
Centrica chief executive Sam Laidlaw told the BBC that the firm's profit margins per household "actually went down", adding that the company had made just under £50 profit per customer household.
"A 5% margin on the business is the sort of margin we require" to make investments in new sources of energy, he added.
Centrica's dividends to shareholders have risen 6% and the company is also returning £500m to them.
Profits were up 16% to £312m at British Gas' residential services unit, which covers services such as boiler repairs.
Audrey Gallacher, the director of energy at Consumer Focus, said: "Perhaps we should not be surprised to see higher profits after a cold winter and with the prospect of significant investment in our energy infrastructure.
"But this announcement comes after more price rises last year, record numbers in fuel poverty and not long after the energy regulator warned of higher still energy prices for the foreseeable future," she added.
"We should not be surprised if consumers regard these results, and the warning of price rises to come, with a mix of resentment and dread."
British Gas raised its gas and electricity prices by 6% in November, which Mr Laidlaw stressed was "lower than any of our competitors".
But Ann Robinson, director of consumer policy at the price comparison website Uswitch, said: "Seven out of 10 of us actually went without heating at some point during this winter and over a third of us have reported that we feel it's actually affected the quality of our life and also our health.
"So no, I don't think customers will be celebrating. I think they'll be wondering why on earth British Gas had to take this move in November when they are making such high profits."
All of the big six energy suppliers raised prices this winter, prompting Prime Minister David Cameron to step in and say he was going to force them to put customers on their cheapest tariffs.
Energy regulator Ofgem provided details of its plan last week, which will also limit the number of tariffs that suppliers can offer and force them to make bills clearer.
The company also announced that Phil Bentley was stepping down from his role as managing director of British Gas to pursue his ambition to be a chief executive.