Financial News

  • 1 August 2014, 15:11

British Gas Half-Year Profit Squeezed By 26%

The parent company of British Gas has reported a large fall in half-year operating profit, which has been blamed on mild weather and the furore over energy bills.

Centrica said British Gas Residential saw its earnings fall 26% to 265m in the six months to June 30, compared to the same period last year.

The drop comes amid ongoing controversy over bill hikes imposed by the so-called big six energy providers, and mild weather.

Chairman Rick Haythornthwaite said the troubles were down to "weather and reflecting the wider political environment".

He also said there had been an effort to restore customer trust in the firm.

Earlier this month British Gas was forced to compensate thousands of customers for providing inaccurate savings estimates in the latest mis-selling episode to blight the utility sector.

The parent company also suffered a significant earnings drop in the period, with operating profit down 35% to 1.58bn.

However the chief executive of Centrica, Sam Laidlaw, expects the dip in profit to be short-lived.

Mr Laidlaw said: "With challenging trading conditions on both sides of the Atlantic in the first half, earnings will be lower in 2014 than in 2013.

"However, the group is well positioned to return to growth in 2015."

Last month energy regulator Ofgem said it has referred the energy market to a probe by the Competition and Markets Authority.

It said the investigation was the best way to ensure that consumers are receiving the best quality, service and price availability.

The big energy providers have come under increasing scrutiny over profits, rising prices and how their wholesale and retail firms are structured.

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