BRITISH GAS PROFITS BOOMING AS PARENT CUTS JOBS
Centrica is cutting 6,000 jobs as it reports a doubling of profits at its British Gas business in the first six months of the year while at the same time denying it is using high prices to British Gas customers to bolster the loss making parts of its business.
Centrica says the job losses would be through redundancies and that it would also create jobs in growth areas, so it expected the net impact to be about 4,000 job losses. In the first half of 2015, profits at British Gas’s residential arm rose to £528m up from £265m a year earlier.
Profits from supplying energy to users were more than offset by those from exploration and production. Centrica’s new chief executive Iain Conn has been conducting a strategic review of the business over the past five months, which has concluded Centrica should concentrate on the British Gas side of the business and reduce its activities in actual energy production.
Centrica put much of the rise in profits at British Gas down to higher gas consumption as a result of colder weather compared with the warm first half of 2014. Conn denied the company was making excessive profits at British Gas at the expense of its nine million domestic customers.
He said that it had already cut prices by 5% this year and would be cutting them by a further 5% later in the year. According to the company, that will mean average savings of £72 a year. Profits per customer per year would remain at the same level as in other years, at about £40-65 a year, he said.
British Gas supplies nine million households, meaning that it has more domestic customers than any of its rivals,
The energy sector has come under scrutiny by the Competitions and Markets Authority (CMA), which earlier this month said energy companies were collectively overcharging customers by £1bn a year. Conn disputed the figure, telling the BBC that it amounted to more than the profits of the entire industry.