British Gas profits rise 98 percent

Profits double

British Gas, which is a part of Centrica, has reported a 98 percent rise in profits for the first half of 2010 - a total of UK£585 million.

It is believed that the exceptionally cold winter in the UK may have benefited British Gas' profits for the year, with gas usage rising by eight percent, along with the addition of 223,000 new customers, despite price cuts earlier in the year.

The rise in customers saw British Gas' customers total 15.79 million. For Centrica, the growth in customers saw the parent group secure overall operating profits of UK£1.56 billion, up by 65 percent on the same period last year despite the price cuts.

Cuts and profits

Speaking to BBC Radio 4, Sam Laidlaw, Chief Executive of Centrica, said that energy prices had fallen by almost a fifth over the past year after the company cut prices three times.

"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.
"We are not out of the woods yet in terms of the recession and we are very mindful of not pushing through any price increases unless we absolutely have to."

There was also a fall in energy use due to people being more energy-efficient, however the winter's Big Freeze offset this reduction. The eight percent rise during the winter months, also saw British Gas respond to a record number of callouts with the company repairing up to 35,000 boilers a day.

It could be the start of a major boom for the company, especially with news that Energy Secretary Chris Huhne has stated that the coalition government's green policies could increase the price of electricity by up to a third and gas by up to a fifth.

While this could triple the average family's energy bills, Huhne said it was the first step in the government's plan to ‘transform' the UK's power system, with the introduction of solar panels, in a bid to cut emissions by up to 80 percent over the next four decades.

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