British Gas profits cool

Chief exec Sam Laidlaw has criticised politicians, after the UK's largest home energy supplier lost customers.

by Rachel Savage
Last Updated: 30 Jul 2015

British Gas household profits fell 6% to £571m in 2013 despite the Centrica-owned energy giant hiking up prices by 9.2% in November, as mild weather in the second half of the year meant we all turned down our heating and customers fled from those higher bills.

Centrica’s full year operating profit slipped 2% to £2.7bn, as the same figure at British Gas’ plunged 18% in the second half of 2013. The UK’s largest household energy supplier haemorrhaged 2% (362,000) of its residential customer accounts, presumably down to that price hike, although it still had over 15.2 million left at the end of the year.

British Gas has also lost 100,000 customers so far this year while claiming that the exodus was ‘stabilising’. Not the greatest news considering that the energy supplier cut its bills by 3.2% from January when the government trimmed green levies.

Centrica’s revenue rose 11% to £26.6bn, while British Gas’ gross sales crept up 3% to £14.2bn. However, the company blamed higher wholesale energy costs for the fall in profits.

Centrica boss Sam Laidlaw went with the classic 'art of deception' approach, attempting to distract investors from the bad news by laying into politicians and their recent spate of Big Energy-bashing. Not surprising really, given that Centrica’s shares have lost more than a fifth of their value since Ed Miliband pandered to the masses by announcing in September that a Labour government would freeze energy prices for 20 months. Oh, and energy secretary Ed Davey suggested it would be a great idea to break up British Gas a couple of weeks ago.

‘The consensus that existed between political parties over key questions of energy policy has broken down,’ Laidlaw said. ‘Investor confidence and public trust in the industry have been damaged, with proposals for price controls and the potential for further political intervention, at a time when substantial investment is required to secure supplies of energy for the UK for the long term.’

‘In particular, we believe that a price freeze is not a credible solution, when the large majority of costs are external to the business,’ he said (no surprise there then…).

Centrica’s chairman Rick Haythornthwaite said he was conducting his ‘own independent fact finding review’ in an effort to get up close and person with customers. ‘Centrica recognises the need to reaffirm and demonstrate its commitments to treating customers well, working constructively with policy makers and conducting its business in the most transparent manner possible.’

MT looks forward to seeing how British Gas and the rest of its ‘Big Six’ rivals try to come over all soft and cuddly.

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