A phone displaying the British Gas app.
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Britain’s Centrica announced bumper returns for shareholders on Thursday after its first-half profits surged on an almost ten-fold increase at its British Gas supply business.
The results come as millions of British households struggle to pay energy bills following a jump in prices due to Russia’s invasion of Ukraine, piling pressure on energy firms to help share the burden. Regulator Ofgem earlier this month warned companies to avoid making excessive payouts to shareholders.
Chief Executive Chris O’Shea said Centrica’s solid balance sheet had helped to protect consumers after several energy suppliers collapsed over the past few years, caught out by fixed price supply contracts when wholesale prices rocketed.
“To be sustainable and stable you have got to make a profit,” he said during a briefing.
Centrica has doubled its support package for struggling customers to 100 million pounds ($130 million), it added.
The British Gas Energy supply division posted adjusted profits of 969 million pounds versus 98 million a year earlier.
Centrica said some 500 million pounds of this related to changes to the regulator’s price cap which allowed the company to recoup previously lost costs and that profits at the division would not remain this high.
It proposed an interim dividend of 1.33 pence per share, up 33% versus last year. It also announced an 450 million pound extension of its share buyback program.
Centrica’s shares were up 5% at 0810 GMT.
The firm said it would invest 4 billion pounds by 2028 on security of supply, energy flexibility and renewable power.
O’Shea said it was still exploring investing in EDF’s Sizewell C nuclear project but no decision had been taken.
Profits at the Rough gas storage site rose to 251 million pounds from 76 million the year before, after the company last year reopened the site to help improve security of supplies.
O’Shea said the Rough site now represented around half of Britain’s total gas storage capacity.
Overall, Centrica’s adjusted operating profit for the first six months of 2023 rose to 2.08 billion pounds from 1.34 billion pounds a year earlier.
It forecast lower underlying profits in the second half of the year, when energy consumption is usually lower.