24 Feb 2011

Centrica profits rise by 24 per cent

The energy giant Centrica sees its profits rise by 24 per cent to £742million on the back of the coldest British winter in 100 years.

Cooking on gas - Centrica boosts profits by 24 per cent (Getty)

The company – which owns British Gas – raised prices by seven per cent for eight million customers just two months ago, taking the average dual fuel bill from £1,157 to £1,239.

Mike O’Connor, the chief executive of the customer watchdog Consumer Focus said: “We need successful energy companies, but consumers may look at today’s profits and at recent prices and question how one justifies the other.”

However Centrica’s chief executive, Sam Laidlaw, described today’s results as “profits with a purpose”, promising to invest £1.7 billion during this year.

“We’re in a volatile situation with commodity prices and we will do all we can to keep bills as low as we can,” he said.”Half the costs come from commodity prices, but there’s also the rising cost of transportation and the cost of meeting climate change obligations.”

“We’re in a volatile situation with commodity prices and we will do all we can to keep bills as low as we can.” Centrica CEO Sam Laidlaw

Mr Laidlaw said that all dual-fuel customers would be eligible for free loft and cavity wall insulation, which he said would help reduce bills.

The energy watchdog Ofgem is currently carrying out an investigation into the major energy companies after discovering that average profit margins were increasing, despite company claims that they were being forced by external factors to pass on price rises to customers.

Centrica‘s recent corporate strategy has seen the acquisition of the successful North Sea oil and gas exploration company Venture Production, contributing to the announcement of a 29 per cent rise in overall operating profits.

On Wednesday the company announced a two billion pound deal to import 2.4 million tonnes of liquefied natural gas from the Gulf State of Qatar – an amount equivalent to ten per cent of the UK’s residential gas market.

Mr Laidlaw said: “Securing gas supplies benefits our customers, underpins our business and provides an important component of the UK’s long term energy security.”