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British Gas sees profits up 24% British Gas sees profits up 24%
(40 minutes later)
Operating profits at British Gas rose 24% in 2010 to £742m, its parent company Centrica has said.Operating profits at British Gas rose 24% in 2010 to £742m, its parent company Centrica has said.
The news comes two months after the UK utility announced a 7% rise in domestic energy bills, which it blamed on rising wholesale prices.The news comes two months after the UK utility announced a 7% rise in domestic energy bills, which it blamed on rising wholesale prices.
British Gas said it had increased its number of customers by 267,000 during the year to 16 million.British Gas said it had increased its number of customers by 267,000 during the year to 16 million.
The results helped Centrica to achieve pre-tax profits of £2.8bn, with operating profits up 29% to £2.4bn.The results helped Centrica to achieve pre-tax profits of £2.8bn, with operating profits up 29% to £2.4bn.
'Bitter pill''Bitter pill'
The 24% rise in British Gas' operating profit came largely due to an increase in profit per customer, with the number of customers up just 1.7%, as revealed in the group results of its parent Centrica.The 24% rise in British Gas' operating profit came largely due to an increase in profit per customer, with the number of customers up just 1.7%, as revealed in the group results of its parent Centrica.
Some 85% of British Gas' profit came in the first half of last year, according to a Centrica spokesperson, when customers increased energy usage in response to cold weather and the firm attracted new business with a price cut in February.Some 85% of British Gas' profit came in the first half of last year, according to a Centrica spokesperson, when customers increased energy usage in response to cold weather and the firm attracted new business with a price cut in February.
The second half was less profitable for the group's residential energy unit as wholesale prices rose more quickly.The second half was less profitable for the group's residential energy unit as wholesale prices rose more quickly.
Centrica has claimed the decision in November to hike British Gas customers' energy bills was necessitated by a 67% rise in wholesale gas prices that year, and a 29% rise in the cost of wholesale electricity prices.Centrica has claimed the decision in November to hike British Gas customers' energy bills was necessitated by a 67% rise in wholesale gas prices that year, and a 29% rise in the cost of wholesale electricity prices.
Price comparison website Moneysupermarket.com called the rise in British Gas' profits a "real bitter pill to swallow for Britain's hard-pressed households who have suffered the double whammy of an extremely cold winter, coupled with high gas and electricity prices".Price comparison website Moneysupermarket.com called the rise in British Gas' profits a "real bitter pill to swallow for Britain's hard-pressed households who have suffered the double whammy of an extremely cold winter, coupled with high gas and electricity prices".
Ofgem investigationOfgem investigation
"British Gas is the only major UK energy supplier that breaks down its results in any great detail," notes Mike O'Connor, chief executive of Consumer Focus. "As such it acts as a lightning rod for the industry.""British Gas is the only major UK energy supplier that breaks down its results in any great detail," notes Mike O'Connor, chief executive of Consumer Focus. "As such it acts as a lightning rod for the industry."
Amid allegations that energy suppliers were making excessive profits, government watchdog Ofgem announced a review of the retail energy market in November.Amid allegations that energy suppliers were making excessive profits, government watchdog Ofgem announced a review of the retail energy market in November.
"The issue is not about one company or one year's profit or loss but it is about whether the energy market is working properly and Ofgem's review must try to answer this question once and for all," said Mr O'Connor."The issue is not about one company or one year's profit or loss but it is about whether the energy market is working properly and Ofgem's review must try to answer this question once and for all," said Mr O'Connor.
"There is a compelling case for much more transparency across the market.""There is a compelling case for much more transparency across the market."


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    • More evidence that most Utility, Energy and Financial Services companies are busy "ripping off" their customers. Such companies are the "unacceptable face of capitalism".The regulators show a culture deference as they fail to ensure effective price transparency and optimum performance for customers. This should be their real responsibility. This comment is awaiting moderation. href="http://www.bbc.co.uk/blogs/moderation.shtml#appear" target="_blank">Explain.
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    • Are we really so surprised?? Isn't that always the way.Switching suppliers will not change anything, as they all follow each other like SHEEP! We are such mugs. This comment is awaiting moderation. href="http://www.bbc.co.uk/blogs/moderation.shtml#appear" target="_blank">Explain.
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    • The energy companies have been profiteering for a number of years now. Putting prices up just before winter, when they know that's when people up their energy usage but failing to reduce bay anything like as much when wholesale prices come down indicate that this is not about wholesale prices but about what they can get away with. The toothless regulator only bolsters their abuse. Sheepie what are you talking aboutBritish Gas hired 2600 new call center staff in the last year, If you were made redundant its because you chose to be by not taking up another role offered
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    • Doesn't surprise me. My winter bill was double it was last year. Yes it was colder but the fact British Gas decided to raise prices (despite a 30% drop in wholesale prices) just before the winter is really telling. Not acceptable behaviour in my opinion, especially when times are so tough and money so short. What makes the situation worse is that there really is no true competition; Centrica is a British company listed on the FTSE and based in Windsor. It is not owned by Americans
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