British Gas profits down despite tariff increases

British Gas has reported a 30% drop in annual profits for last year, despite price increases of up to 18%, as milder winter weather reduced energy demand.

BritishGas

Parent company Centrica said mild spring and autumn weather as well as marketing campaigns to highlight better energy efficiency, drove profits at its residential arm, British Gas, to £522m in 2011.

Last August, British Gas raised household gas bills by 18% and electricity bills by 16%. It cut electricity prices by 5% in January, but left gas prices unchanged.

The UK’s ‘Big Six’ energy firms, which include British Gas, NPower, Eon, Scottish and Southern Energy, EDF and Scottish Power, have become the subject of consumer backlash for putting up prices at a time when home owners are facing sharp increases in their bills.

Centrica chief executive Sam Laidlaw says that the company is attempting to change perceptions of the major energy suppliers in the UK, through its ‘honest conversation’ marketing campaign, which launched last autumn.

He adds: “2011 was a tough year, both for Centrica and our customers. But the strength of our integrated business and balance sheet means we’ve been able to take the lead in helping customers through these difficult times, as well as delivering growth and making the investments on which Britain’s energy future depends.”

In October Industry watchdog Ofgem announced a series of proposals to reform the energy market. It revealed that energy profit margins had increased 733% to £125 per customer.

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