You are here: Home - Household Bills - News -

British Gas owner Centrica posts 500% profit boost as energy bills soar

Written by: Sarah Davidson
British Gas owner Centrica made £1.34bn in the first half of this year, more than five times the £262m profit posted for the same period last year.

It also reinstated its dividend payment after suspending all shareholder payouts during the pandemic, announcing an interim 1p per share payment followed by a “progressive dividend”.

The company has benefited from the soaring price of gas, fuelled by Russia’s invasion of Ukraine limiting supplies to Europe and the UK.

Yesterday Russian premier Vladimir Putin cut gas supplies again, halving the amount of natural gas supplied to the continent via the Nord Stream 1 pipeline and sending wholesale prices up even further.

Centrica’s chief executive Chris O’Shea said the company’s profits are expected to be just as high in the second half of the year, allowing it “to lead the industry in measures to protect and support customers through the most challenging energy crisis in living memory”.

Analysts at Cornwall Insight are now predicting that households will see their energy bills almost double in October when the energy price cap is expected to rise to £3,420 from the current cap of £1,971 a year for the average household.

O’Shea said: “We are very aware of the difficult environment many customers are facing and we will continue supporting them.”

Centrica announced plans to add at least 500 additional UK-based customer service roles to British Gas Energy and 1,000 new UK engineering apprenticeships.

The firm is also providing £6m of funds for its most vulnerable customers in addition to the £7m contributed to the British Gas Energy Trust to fund debt charities and provide grants of up to £750 to help any customer struggling to pay their energy bills.

Victoria Scholar, head of investment at Interactive Investor, said: “In an otherwise challenging year for equities, commodity players have been the standout winners with the geopolitical turmoil providing a tailwind for the sector.

“Shares in Centrica have rallied to highs not seen since January 2020 before the start of the pandemic as the stock continues to go from strength to strength.”

Shell profits

Oil giant Shell also posted record quarterly adjusted profit this morning, above City forecasts and helping it to boost its share buyback programme by a further $6bn.

Second quarter adjusted profit of $11.47bn has more than doubled year-on-year and is up 26% compared to the first quarter $9.13bn profit.

A quarterly dividend of 25 US cents per share is unchanged from the previous quarter but up 4% from Q2 2021, with group net debt of $46.4bn down 29% from the quarter a year ago.

Keith Bowman, investment analyst at Interactive Investor, said the share price, up 30% year-to-date, is in line with the rising price of oil during 2022.

In May this year, then chancellor Rishi Sunak announced a temporary windfall tax on energy company profits with firms expected to pay an additional 25% to the Treasury until May 2023.

Energy companies already pay a higher rate of corporation tax at 30% on profits plus a 10% surcharge. Companies in other sectors pay corporation tax at 19%, though this is expected to rise to 25% in April next year.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Autumn Statement: Everything you need to know at a glance

Yesterday Chancellor Jeremy Hunt made his first fiscal statement in the role, outlining a range of tax measure...

End of Help to Buy: 10 alternatives for first-time buyers

The deadline for Help to Buy Equity Loan applications passed on 31 October. If you’re a first-time buyer who...

Moving to an energy prepayment meter: Everything you need to know

As households struggle with the soaring cost of energy, tens of thousands of billpayers are expected to move o...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week