Centrica gain ‘is a result of higher bills’

By BEN GRIFFITHS FOR THE DAILY MAIL
Updated: 03:47 EST, 25 February 2011

Centrica posted a 24pc surge in 2010 profits, fuelled by booming winter demand for gas and electricity, more domestic customers and the first year’s contribution from its Venture Production purchase.

The owner of British Gas has been slammed by consumer groups for hiking residential prices by 7pc during Britain’s coldest winter for 100 years.

While rising wholesale gas prices meant the unit’s operating profit slumped 48pc in the second half of the year, over the 12-month period profits were up 24pc to £742m.

For the whole group, annual operating profits were up from £1.8bn to £2.4bn on revenues of £22.4bn.

Industry watchdog Ofgem is probing the sector’s margins and will report its findings in March. But Centrica boss Sam Laidlaw said he did not expect the profits to draw too much attention from the regulator, adding referral to the Competition Commission for a full inquiry would be ‘very much the last resort’.

He said: ‘These are a strong set of numbers but reflect the fact that we are a new and much larger group. British Gas is now less than a third of our business in terms of profitability.’ 

Besides British Gas, Centrica said profits from its upstream UK business – which includes North Sea oil and gas production since its acquisition of Venture – were up 47pc to £771m.

The unit supplying UK businesses reported a 27pc profit increase to £233m, profits at the storage operation were flat at £169m and the Direct Energy arm in North America saw profits up 53pc to £234m.

FTSE 100-listed Centrica (down 1.5p at 333.6p) said the full-year dividend would be 14.3p a share compared with 12.8p for 2009.