The coldest winter for 30 years helped the UK’s biggest energy firm almost double its first-half profits it was revealed yesterday.
Centrica said its British Gas residential arm posted a surplus of £585million – 98% ahead of last year – as shivering households cranked up the heating, and gas usage rose 8%.
British Gas, which trades as Scottish Gas north of the border, was also helped by the addition of 223,000 new customers this year after it cut gas bills in February.
Centrica pushed up overall operating profits 65% to £1.56billion.
Centrica said its price cuts, plus increased energy efficiency measures, meant average bills for its 16 million customers were slightly lower last winter despite the fierce cold.
The firm also stressed British Gas profits would be mostly booked in the first half of the year as rising wholesale gas prices squeeze margins through the rest of 2010.
Pressure will build for an increase in household bills if the upward trend in wholesale prices persists.
Chief executive Sam Laidlaw said: “This is a competitive market so we can’t give any signals but our position has always been to lead the market down and try to delay any price increases as long as we can.”
Mr Laidlaw also warned of building pressure on consumers from tax increases and higher public-sector unemployment as the impact of Chancellor George Osborne’s emergency Budget is felt next year.
He added: “We are not out of the woods yet in terms of the recession and we are very mindful of not pushing through any price increases unless we absolutely have to.”
Despite the huge profits rise at the residential arm, the British Gas services business saw operating profits fall 3% to £109million as the big chill sparked a record level of callouts.
The company’s engineers were repairing up to 35,000 boilers a day during the coldest period, the firm said, while volumes at its Rough field gas storage facility in the North Sea fell to record low levels.
Centrica is looking to lessen its dependence on volatile wholesale energy markets through moves such as its acquisition of Aberdeen’s Venture Production and its 20% stake in nuclear power firm British Energy.
The group’s oil and gas production arm grew operating profits by 45% to £485million as a 41% rise in gas production offset lower average prices over the period.
Independent price comparison website energyhelpline.com said: “This is not the day to beat up British Gas”.
Director Mark Todd said: “British Gas has led the field with price cuts over the last 18 months and it would not have attracted 223,000 new customers if it was charging too much. The company now has the cheapest electricity and dual fuel for standard customers and its online tariff is the cheapest in the market.
“Like all energy companies, British Gas has benefited from a double whammy of the coldest winter in more than 30 years and low wholesale gas prices and we would expect to see other strong performances from other suppliers in the future.”
Mr Todd added: “What the consumer has to realise is that the age of cheap energy died some time ago but it is still possible to get a fair deal by embracing the free market and shopping around.”