The owner of British Gas is poised to trigger fresh anger when it announces a record £3 billion annual profit thanks to soaring energy prices that have caused misery for consumers.
Britain’s biggest household energy supplier is already under fire after The Times revealed that it was forcibly installing prepayment meters in the homes of vulnerable customers struggling to pay energy bills, which are at a record high.
Centrica, the FTSE 100 group that owns British Gas, is expected to say on Thursday that it made adjusted operating profits of £3 billion last year — the highest in its history. That would be more than three times higher than a year earlier and would outstrip its previous record of £2.7 billion, set in 2012.
• Exposed: How British Gas debt agents break into homes of vulnerable• I thought I was being burgled — it was British Gashttps://www.thetimes.com/article/i-thought-wed-been-burgled-it-was-british-gas-f2s7zh0q2 • British Gas cut off homes when it couldn’t connect prepay meters
Profits at the British Gas energy supply division are expected to account for only about £104 million, or 3.5 per cent of the total, according to the forecasts from analysts at Investec. That would actually be lower than in 2021, as customers used less energy during the unusually mild start to the winter.
However, this is unlikely to spare Centrica opprobrium as the company banks bumper profits from its North Sea oil and gas production, its interests in Britain’s nuclear power plants and its energy trading business, which have all benefited from high prices.
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “While Centrica has been busy authorising its agents to break into vulnerable customers’ homes to force them on to more expensive pre-payment meters, they have been laughing all the way to the bank.
“It’s obscene to think that the profits of this firm are built on the backs of older people, young families and the disabled suffering in cold damp homes this winter. While they may claim the retail arm is less profitable than other parts of the business, the profits on energy production and on trading are what are driving the energy bills crisis in the country.”
Energy bills have already risen to £2,500 a year for a typical household and are due to increase to £3,000 a year from April.
Centrica has repeatedly upgraded its profit outlook as it emerged as a winner from the energy crisis. It told investors last month that it expected post-tax profits to be more than seven times higher than a year earlier.
Martin Young, an analyst at Investec, expects the group to pay a final dividend of more than £100 million to shareholders, on top of a £59 million interim dividend announced in July. The company has also rewarded investors by launching a £250 million share buyback programme.
Centrica has defended shareholder payouts by highlighting that these benefit pension funds as well as about half a million individual shareholders. The company says it has committed £50 million of voluntary help for customers over the past year.
Chris O’Shea, chief executive of Centrica, waived his £1.1 million annual bonus for 2021 and is under pressure to waive potential bonuses for 2022 as well, especially in light of investigation by The Times into British Gas installing prepayment meters under warrant.
Ofgem rules prohibit the forced installation of such meters into the homes of very vulnerable customers and the regulator has launched an investigation into British Gas.
O’Shea has said that he is “really truly sorry” for the behaviour uncovered by The Times and vowed to “make it right”. British Gas has suspended all installations under warrant for the rest of the winter but is under pressure to do more to help those who have already had such meters installed and are at risk of “self-disconnection” if they cannot afford to top up.