The simmering row over high energy prices has been reignited after British Gas’s residential supply business reported a 31% leap in annual profits to £574m.
The soaring profit comes amid growing calls for the big six suppliers to cut energy bills for customers in line with falling wholesale prices.
Fuel Poverty Action, a campaign group for those struggling to pay their energy bills, said the figures released on Thursday showed the company was profiteering at the expense of hard-pressed consumers.
“It is absolutely sickening that British Gas has made bumper profits in a year when there were more winter deaths than at any time this century. We have seen British Gas mercilessly hound hard-up customers even when bills are in dispute,” said Fuel Poverty Action’s Ruth London.
British Gas, which holds around 40% of UK gas accounts, has announced three price cuts in the last 12 months which it claims could lower a dual fuel bill by almost £100 a year.
However, critics have always argued that the cuts have been small compared with the savings made from tumbling wholesale costs, partly caused by the collapse in the global price of oil and gas.
Fuel Poverty Action blamed the government for failing to crack down on energy suppliers. “Despite all the headlines, the power of the big six remains absolute, thanks to a government that is happy to leave its citizens to die in cold homes.
“Cuts to insulation programmes and renewable energy have made customers colder while lining the pockets of big six shareholders,” said London.
The strong performance at British Gas came as parent company Centrica made almost £2bn of writedowns due to the plunging price of oil and gas.
The figures show total British Gas operating profits at £809m, down 2% while Centrica group’s adjusted operating profits fell 12% to £1.5bn, roughly in line with analyst forecasts.
However, those profits did not take into account £1.8bn worth of writedowns, almost double the scale of last year, as the continuing fall in global energy prices hit the group’s “upstream” exploration and production assets in the North Sea and elsewhere.
Centrica said last summer it would be exiting some of the production businesses and has announced plans to cut 6,000 posts across the group or 10% of its workforce. It has simultaneously promised to create 2,000 new jobs.
Ian Conn, the Centrica chief executive, said the group was performing well in difficult circumstances and there would be no cut in the dividend to shareholders.
“Centrica has delivered a resilient financial performance, with solid 2015 adjusted earnings despite the challenge of falling wholesale oil and gas prices. Operating cash flow has been strong, and with capital discipline this has allowed the group to reduce net debt. In 2016 we expect operating cash flow also to be over £2bn.”
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