Profits at British Gas have surged tenfold as the group claws back money that it lost during the energy crisis.
British Gas owner Centrica said profits hit £751million last year, up from £72million in 2022.
Chris O’Shea, chief executive of Centrica, said the firm benefited from a ‘one-off’ boost during the first six months of the year when it cashed in on being one of the several energy firms that the regulator Ofgem allowed to recoup costs.
Suppliers were forced to protect households against price rises throughout 2022 when they reached record highs after Russia’s invasion of Ukraine.
It meant British Gas was pushed to sell energy below the wholesale price to its 7.5m customers, hurting its balance sheet.
Boost: Chris O’Shea (pictured), boss of British Gas’s parent company Centrica, hailed a strong performance over the past year
But changes at the end of 2022 increased how much profit suppliers could make – allowing its parent firm Centrica to recover some of the costs incurred.
Centrica has suggested this boosted profits by around £500million.
Nonetheless, overall profits at the parent firm still fell by 17 per cent last year to £2.8billion.
This was above analyst estimates but down from the record £3.3billion it made in 2022, while many British households struggled to keep up with sky-high bills.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: ‘Centrica’s turnaround looks to be nearly complete, with the group making great strides over the past three years. There was a strong recovery at British Gas.’
And the FTSE 100 company, which produces and trades energy as well as selling directly to households, was still eager to sweeten shareholders.
Centrica plans to increase its full-year dividend by a third to 4p per share, worth £144million, rewarding hundreds of thousands of retail investors.
Although this helped to buoy Centrica shares, which rose 1.3 per cent, or 1.8p, to 136.2p, it also sparked fury among critics.
Simon Francis, from campaign group End Fuel Poverty Coalition, said: ‘These profits are still astronomical for a firm providing the energy people need to stay warm and safe.
‘These huge profits are one of the reasons households had to cut back so much on their spending, sending Britain crashing into a recession.’
Unite general secretary Sharon Graham said: ‘Centrica is still raking in astonishingly high profits off the back of exorbitant bills nearly double what they were three years ago.
There is no point beating around the bush: the only way to stop households and businesses being ripped off by the profiteers in our energy supply chain is public ownership.’
Nevertheless, O’Shea signalled that shareholders were likely to keep reaping benefits despite the uncertain backdrop.
‘As you would expect, sharply lower commodity prices and reduced volatility will naturally lower earnings in comparison to 2023 as we return to a more normalised environment,’ he said.
‘Our performance over the past year has reinforced our confidence in delivering against our medium-term sustainable profit ambitions and continuing to create value for shareholders.’
In a bid to soften the blow to households, it said it would also provide £40million of extra support to customers struggling with their bills.
