British Gas’ profits have increased tenfold as the group recovers money it lost during the energy crisis.
British Gas owner Centrica said profits last year were £751m, up from £72m in 2022.
Chris O’Shea, CEO of Centrica, said the company benefited from a “one-off” boost during the first six months of the year, when it benefited from being one of several energy companies allowed by regulator Ofgem to reduce costs to earn back. .
Suppliers were forced to protect households from price increases in 2022, when they reached record highs following Russia’s invasion of Ukraine.
It meant British Gas was forced to sell energy below wholesale prices to its 7.5 million customers, damaging its balance sheet.
Boost: Chris O’Shea (pictured), boss of British Gas parent company Centrica, praised the strong performance of the past year
But changes at the end of 2022 increased the profits suppliers could make, allowing parent company Centrica to recoup some of the costs incurred.
Centrica has suggested this has increased profits by around £500m.
Nevertheless, the parent company’s overall profits still fell 17 percent to £2.8 billion last year.
This was above analyst estimates but lower than the record £3.3 billion it made in 2022, as many British households struggled to keep up with soaring bills.
Aarin Chiekrie, equities analyst at Hargreaves Lansdown, said: ‘Centrica’s turnaround appears to be almost complete, with the group making great progress over the past three years. There was a strong recovery at British Gas.’
And the FTSE 100 company, which produces and trades energy and also sells directly to households, was still keen to please shareholders.
Centrica plans to increase its full-year dividend by a third to 4p per share, worth £144 million, rewarding hundreds of thousands of retail investors.
While this boosted Centrica shares, which rose 1.3 percent (1.8 cents) to 136.2 cents, it also sparked anger among critics.
Simon Francis, from campaign group End Fuel Poverty Coalition, said: ‘These profits are still astronomical for a company that provides the energy people need to stay warm and safe.
‘These huge profits are one of the reasons why households had to cut back on spending so much, pushing Britain into recession.’
Unite general secretary Sharon Graham said: ‘Centrica is still raking in astonishingly high profits thanks to exorbitant bills that are almost double what they were three years ago.
There is no point beating around the bush: the only way to prevent households and businesses from being defrauded by the profiteers in our energy supply chain is public ownership.’
Nevertheless, O’Shea indicated that shareholders would likely continue to reap the rewards despite the uncertain conditions.
“As you would expect, sharply lower commodity prices and reduced volatility will obviously reduce earnings compared to 2023 as we return to a more normalized environment,” he said.
“Our performance over the past year has reinforced our confidence in achieving our sustainable profit ambitions over the medium term and continuing to create value for shareholders.”
In an effort to soften the blow for households, the company said it will also provide £40 million in additional support to customers struggling with their bills.