British Gas record profits boosted by fall in energy costs

Thursday 25th February 2010

British Gas, the country's biggest electricity and gas supplier, has announced its operating profits leapt 58 per cent last year.

The company announced record-breaking profits of £595 million for 2009, beating City expectations and sparking a row over the profiteering of the energy industry.

The row over the company's profits, which exceeded its previous record of £573 million set in 2007, comes as charities claim that following the slump in energy prices providers have failed to pass these savings onto their customers.

The rise in profits came despite a seven per cent drop in gas consumption.

Overall revenues rose by three per cent, but the key to the rise in profits was a huge surge in operating margins which rose from 4.8 per cent in 2008 to 7.6 per cent in 2009. This followed a 45 per cent plunge in the cost of buying gas to supply to consumers.

British Gas conceded that the average bill was slightly higher this year but also claimed that unusually cold weather in January and February of this year and December 2009 had pushed up demand.

Philip Cullum, Consumer Focus deputy chief executive, said: "Energy companies have no excuses for not cutting bills for their customers. It is clear the problems in the energy market are profound and that it requires fundamental reform."

Sam Laidlaw, chief executive of Centrica, which own British Gas, said the company's profit margin had been about eight per cent for 2009 and it was aiming for about seven per cent this year. The group also said British Gas would create 1,100 jobs in 2010.

Centrica chairman Roger Carr said: "British Gas was the first of the major suppliers to reduce prices in 2009 which, combined with reduced average consumption, provided a welcome reduction in bills."

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