British Gas owner Centrica triples profits to record £3.3 billion

The owner of British Gas has made a record £3.3 billion annual profit after benefiting from soaring energy prices following Russia’s invasion of Ukraine.

Centrica, the FTSE 100 group that owns Britain’s biggest household energy supplier, said that its adjusted operating profits had more than trebled last year from the £948 million it reported in 2021.

Two weeks ago an investigation by The Times revealed that British Gas was forcibly installing prepayment meters in the homes of vulnerable customers struggling to pay soaring bills.

Chris O’Shea, Centrica chief executive, has apologised but refused to say whether he would forgo any potential bonus payments. He is eligible for an annual bonus of up to £1.6 million for 2022 as well as potential long-term share bonuses.

Centrica’s oil and gas production, nuclear power generation and trading businesses all benefited from high and volatile energy prices, more than offsetting a drop in profits at the core British Gas household energy supply division.

The group’s adjusted net profits of £2.1 billion were almost nine times higher than a year earlier. Centrica said it would reward shareholders by paying a £118 million final dividend and buying back £300 million of its own shares.

The profits were even higher than expected and Centrica’s shares rose by 5 per cent.

British Gas supplies energy to more than 7.5 million households and almost half a million small businesses, and has a boiler repair and home services business. Centrica also has North Sea oil and gas production, a 20 per cent stake in Britain’s nuclear power plants, an energy trading division and operates the Rough gas storage site, which it partially reopened late last year.

Since the Ukraine war began energy bills have risen to £2,500 a year for a typical household and are due to increase to £3,000 a year from April.

• Times Investigation: How British Gas debt agents break into homes of vulnerable

Centrica said that adjusted operating profits at the British Gas energy supply division had fallen by 39 per cent to £72 million, after it made £50 million in voluntary payments to support customers and invested in 700 new customer service employees. O’Shea said that “British Gas Energy actually spent more supporting customers than it earned in 2022”. Its profits were also lower because it repaid £27 million it had received under the coronavirus furlough scheme.

However, other parts of the businesses benefited from high and volatile prices after Russia’s invasion of Ukraine and curtailment of gas supplies to Europe triggered an unprecedented energy crisis. Centrica made £1.8 billion from its North Sea oil and gas, gas storage and nuclear businesses, almost three times higher than in 2021, also made £1.4 billion in trading gas and power, up from just £70 million in 2021.

Centrica has faced intense criticism since The Times revealed that contractors working on its behalf were installing prepayment meters under warrant in the homes of vulnerable customers, preventing them from using energy unless they topped up.

Ofgem rules prohibit the forced installation of prepayment meters in the homes of the very vulnerable and the regulator is investigating British Gas.

O’Shea has said he is “really truly sorry” and vowed to “make it right”. British Gas has suspended all installations under warrant for the rest of the winter.

He said today that the revelations were “deeply concerning” and British Gas was still investigating. “Even if this happened to just one customer it’s unacceptable,” he said.

He said that the government, regulator and industry needed to jointly establish a “holistic solution” for customers who could not afford their bills. “This is not something that can be solved by British Gas,” he said.

He added: “There’s a lot of evidence out there that allowing people to build up bills that they cannot pay is extremely damaging to their mental health and it has a direct impact on suicide rates. There is an issue with: what do you do when people cannot pay? We’ve got to ask that question and answer it as a society. There is no easy solution to this.”

Sharon Graham, general secretary of the Unite union, said: “British Gas owner Centrica has been coining it in from our massive energy bills while sending bailiffs to prey on vulnerable consumers the length and breadth of the country.

“These energy companies are showing us everything that is wrong with the UK’s broken economy.”

George Dibb, head of the Centre for Economic Justice at the IPPR think tank, said: “These scandalous profits are undeserved and come directly from the pocket of bill-payers. We all know that wholesale energy prices have been sky-high for the past year, but that’s no reason that gas suppliers should be making higher profits on the back of higher bills.”