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| Centrica profits up after price rise - how does it compare with competitors? | Centrica profits up after price rise - how does it compare with competitors? |
| (7 months later) | |
| Centrica turned a profit of £606m last year from its residential energy operations in the UK, marking an 11% rise in nominal terms since 2011. Customers of British Gas - whose energy is supplied by Centrica - were hit with a 6% price increase in November 2012. | Centrica turned a profit of £606m last year from its residential energy operations in the UK, marking an 11% rise in nominal terms since 2011. Customers of British Gas - whose energy is supplied by Centrica - were hit with a 6% price increase in November 2012. |
| That raises a question of whether the price hike has effectively funded the rise in profits - and whether Centrica is alone among utility companies in this matter. But, there are arguably some mitigating factors: Centrica's profit margin also dipped from 6.9% to 6.6% last year. | That raises a question of whether the price hike has effectively funded the rise in profits - and whether Centrica is alone among utility companies in this matter. But, there are arguably some mitigating factors: Centrica's profit margin also dipped from 6.9% to 6.6% last year. |
| There are various difficulties in comparing figures between the UK's 'big six' utility providers - the other five are EDF, E.ON, nPower, Scottish Electricity and Scottish and Southern Energy - some arising from foreign ownership, others from differences in accounting terminology, as well as the fact that Centrica is as yet the only one to announce its 2012 financials. | There are various difficulties in comparing figures between the UK's 'big six' utility providers - the other five are EDF, E.ON, nPower, Scottish Electricity and Scottish and Southern Energy - some arising from foreign ownership, others from differences in accounting terminology, as well as the fact that Centrica is as yet the only one to announce its 2012 financials. |
| Nevertheless, one reliable source is Ofgem, the regulator for gas and electricity suppliers in the UK. In January 2012 it published the first in a promised series of reports on financial reporting by the main energy providers. A second edition is nearing publication, but for now all we have to go on is the first, which covers figures for 2010. | Nevertheless, one reliable source is Ofgem, the regulator for gas and electricity suppliers in the UK. In January 2012 it published the first in a promised series of reports on financial reporting by the main energy providers. A second edition is nearing publication, but for now all we have to go on is the first, which covers figures for 2010. |
| The graphic, from page 10 of the Ofgem report, shows that Centrica made a greater profit than its competitors. | The graphic, from page 10 of the Ofgem report, shows that Centrica made a greater profit than its competitors. |
| However, figures from pages 17 tell us it also had the lowest domestic electricity prices of the big six. | However, figures from pages 17 tell us it also had the lowest domestic electricity prices of the big six. |
| And, according to Ofgem, Centrica had third lowest domestic gas prices too. | And, according to Ofgem, Centrica had third lowest domestic gas prices too. |
| An alternative data source is Centrica's own accounts, which show that its profit margin from supplying energy to residential customers in the UK has fluctuated considerably since data was first provided at such granularity in 2006. | An alternative data source is Centrica's own accounts, which show that its profit margin from supplying energy to residential customers in the UK has fluctuated considerably since data was first provided at such granularity in 2006. |
| Pricing data for specific providers is not available, but we do have figures for retail prices across the UK industry as a whole. Once again there does not appear to be a pattern - statistically significant or otherwise - linking retail prices to Centrica/British Gas profits. | Pricing data for specific providers is not available, but we do have figures for retail prices across the UK industry as a whole. Once again there does not appear to be a pattern - statistically significant or otherwise - linking retail prices to Centrica/British Gas profits. |
| But it will be hard for bill payers not to think that Centrica's profits are completely unrelated to increases in the amount paid. | But it will be hard for bill payers not to think that Centrica's profits are completely unrelated to increases in the amount paid. |
| Do you have other sources of data we have missed, or have you spotted a pattern we overlooked? | Do you have other sources of data we have missed, or have you spotted a pattern we overlooked? |
| Contact me at john.burn-murdoch@gmail.com or leave a comment below. | Contact me at john.burn-murdoch@gmail.com or leave a comment below. |
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