British Gas owner Centrica sees profits fall as crisis costs are clawed back

15 February 2024 , 08:19

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Adjusted profit at Centrica fell to £2.8 billion before tax, compared with £3.2 billion the year before (Image: PA Archive/PA Images)

British Gas' parent company, Centrica, saw a boost last year from clawing back money it lost during the energy crisis.

However, their pre-tax adjusted profit took a dip, falling to £2.8 billion in comparison to £3.2 billion the previous year. On another note, the retail unit of the business, composed primarily of British Gas and also incorporating Irish supplier Bord Gais, watched its adjusted operating profit shoot up from £94 million to a hefty £799 million.

This rise came about through cost recovery, as revealed by Centrica. The profit was somewhat less than the record-breaking £969 million earned in the first half of the year alone.

The extra earnings could be traced back to the allowance for British Gas to recover an additional £500 million via the price cap during the first half of the year. Centrica boasted a net profit of £6.5 billion before tax last year on a statutory basis, thanks to how it purchases energy in advance.

This was a leap from the loss of £383 million sustained in 2022. Chris O'Shea, the firm's Chief Executive, spoke positively about their performance: "We are pleased to report that this strong underlying operational performance has continued into early 2024."

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He added: "As you would expect, sharply lower commodity prices and reduced volatility will naturally lower earnings in comparison to 2023 as we return to a more normalised environment. Our performance over the past year has reinforced our confidence in delivering against our medium-term sustainable profit ambitions and continuing to create value for shareholders."

Lawrence Matheson