Centrica will see 'double digit profit growth' this year



British Gas owner Centrica (Xetra: A0DK6K - news) has said it expects to see double digit profit growth this year in its UK residential services arm, leaving itself open to accusations of greed as soaring bills push many households into fuel poverty.

The company has seen gas consumption rise 9pc in the first ten months of the year thanks to colder-than-average temperatures, which it said would help it to deliver earnings growth "in line with market expectations".

But it also complained that the cost of upgrading the UK's gas and electricity grids and meeting carbon reduction targets have added £50 to the annual cost of supplying each household. Rising wholesale gas prices had also hit profits, said Centrica , which had forced it to pass on a 6pc increase in bills to customers , which came into effect on November (Xetra: A0Z24E - news) 16.

The gas supplier said in an interim management statement this morning that it was now on track to deliver "double digit profit growth" this year in its UK residential services arm, which services and installs boilers, and 6pc across the whole UK business. British Gas increased profits by a quarter to £345m over the first half of this year. Profits for the second half of the year are expected to be £224m, said a spokesman.

Rival gas supplier SSE (Xetra: A0RFBG - news) yesterday announced a 38pc jump in half-year profits to £400m, prompting criticism from customers who have seen a 9pc hike in bills last month.

SSE’s chief executive Ian Marchant complained that he was “ fed up ” with criticism over its “modest” profits

Yesterday Centrica was also forced to deny allegations that it had manipulated wholesale gas prices. A whistleblower told the Financial Service's Authority that gas traders had been seeking to rig the price of gas on open markets.

The regulator is now investigating trades made on September 28, but Centrica said in a statement yesterday that it had looked at its own activity on the day and found nothing untoward: "We have reviewed all our trades executed around the close of the market on that day and have found nothing unusual about them or any cause for concern."

Centrica, Eon (Taiwan OTC: 3411.TWO - news) and SSE have all issued statements saying that they have faith in their compliance regimes.