British gas makes 98% profit in first half of 2010

British Gas made operating profits of £585m for the first half of 2010, a rise of 98%, according to its parent company Centrica.

The company, which supplies gas to more than half of the country’s households, benefited from the cold winter.

Gas usage rose by 8%, and the company added 223,000 new residential customers, after it cut gas bills in February.

That took the number of customers to 15.79 million, ahead of the number it supplied in 2008.

British Gas’s parent company is Centrica. Its chief executive, Sam Laidlaw, told BBC Radio 4’s Today programme that energy prices had fallen by almost a fifth over the past year after the company cut prices three times.

Ann Robinson, from the price comparison service, uSwitch, said that British Gas and its rival suppliers could cut prices still further.

She said: “Today’s profits suggest that suppliers could actually afford to pass on even more benefit to consumers by cutting their prices again.”

Mr Laidlaw hinted that price rises were unlikely: “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.”
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Centrica’s statement said there was an underlying fall in energy use because customers were being more energy-efficient, but this was offset by extra demand thanks to the freezing weather.

Centrica itself reported a 65% rise in first-half profits to £1.56bn.

Mr Laidlaw said: “This is a much bigger group than we had a year ago – a 40% increase in the size of the group as a result of the acquisitions that we did last year.”

Looking ahead to the full year, the company said the lion’s share of the profit had already been made.

Its statement said: “Overall, we expect the full-year results for 2010 to be heavily weighted towards the first half of the year.”

It added, though, that its full-year results would be in line with what the market was expecting.

Source: BBC