WHEN British Gas owner Centrica announced double-figure price rises for millions of its customers on Friday, managing director Phil Bentley claimed that “lower availability of supplies from both the UK and the Continent, coupled with higher global oil prices, have forced up wholesale prices” and that the firm could not absorb the “burden” of these increases.
But even a cursory look at the history of Centrica paints a rather different picture.
In February 2003, consumer watchdog Energywatch condemned the profits made by Centrica from British Gas, which rose from £19 million in 2001 to £218 million in 2002.
In February 2004, Centrica announced profits of more than £1 billion for the first time and complained that the warm weather had prevented it from making even more money.
The group rewarded shareholders by raising its dividend by 35 per cent, paying them a total of £229 million and indicated that it would return even more cash to shareholders if it could not find internal uses for the money or suitable takeover targets.
In July 2004, Centrica reported a 10 per cent increase in operating profit, earnings up 9 per cent and an interim dividend up 47 per cent on 2003.
In September 2005, the energy group announced improved half-year profits despite British Gas losing 505,000 retail gas and electricity customers in the period.
The rising gas price provided an operating profit for Centrica Energy which soared by 29 per cent.
Earlier in the year, Centrica had announced 3,500 job losses and five office closures with more to come.
In February 2006, Centrica revealed record profits only days after it announced the biggest ever energy price rise to date.
Centrica’s operating profits rose 11 per cent to £1.51bn and British Gas said that domestic prices would rise by 22 per cent in March.
Subsequently, Centrica’s profits from gas production alone rose 31 per cent to £1.02billion, while its profits from gas storage more than doubled to £154 million.
Shareholders benefited hugely, with the dividend up by 22 per cent, exactly the same as the rise in British Gas bills, to a total of £340m.
Chief executive Sir Roy Gardner, who was paid £1.6m in the previous year, described gas and electricity price rises as “unfortunate but inevitable.”
In August 2007, British Gas saw a huge rise in first-half profits thanks to falls in wholesale gas prices. Pre-tax profits at Centrica showed at £1.5 billion.
However, Centrica warned that gas prices could continue to be volatile and customers should expect them to remain high.