Centrica Plc, the UK’s largest energy supplier has today announced its operating profits have reached £1.25 billion over the last financial period ending on June 30 – nearly double last year’s total.
The profits, based on unaudited figures, are mainly due to the dramatic turnaround for British Gas Residential, Centrica’s largest UK company, who reported £533 million profit across the last six months compared to a £143 million loss in 2006.
The firm also made two price cuts for consumers earlier this year and recruited 46,000 new customers in the second quarter of the year, raising total customer numbers to 15.8 million.
The recent drop in wholesale natural-gas and power prices has helped boost the energy company’s profits despite criticism from UK consumer watch dogs that profits have not been passed on to customers.
British Gas has suffered with a poor public image over the past 12 months losing over one million customers to competitors such as E.ON AG and Scottish and Southern Energy. This has affected the market share, causing it to fall below 50 per cent as it faced higher wholesale energy prices.
The company warned that although British Gas's performance had been "very strong" in the first half of the year, this was not expected to be repeated in the second half.
Scott Byrom, utilities expert at price comparison website, moneysupermarket.com, commented on the announcement: “Since energy prices fell early this year, British Gas has ensured it offers customers the cheapest products around and is still leading the way with its ‘Click Energy 3’ online offering. As well as acquiring new business, the profits have been greatly helped by lower wholesale gas costs. A factor I hope will ensure energy prices continue to fall.”
However, the same cannot be said for Centrica's production business, Lower wholesale costs have affected Centrica Energy's operating profits which are down 42 percent to £337 million.
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