British Gas owner reports 889 per cent rise in profit

Centrica says price cap changes helped it bring in almost £1 billion

Operating profits at British Gas were described as being mainly due to one-off factors. Reuters

The owner of British Gas reported runaway profits on Thursday as high energy costs and changes in government rules brought in almost £1 billion for parent company Centrica.

Results for the first half of the year showed British Gas profits rising sharply from £98 million ($127.3 million) to £969 million, an increase of 889 per cent.

Centrica said about £500 million of this related to changes in a UK price cap, which allowed suppliers to recoup previously lost costs.

High prices "naturally also drove" higher margins but the vast profits were "mainly due to one-off factors", it said.

The company's shares were up 5 per cent in early trading.

Chief executive Chris O'Shea said the company would invest profits in the energy transition, amid anger at the bumper profits.

"Our robust balance sheet has allowed us to invest heavily in the UK and Ireland's energy security and will make sure that our customers have cleaner energy at the right price," he said.

"Today's results allow us to increase our customer support package to more than £100 million and the new green investment strategy we've announced will see us invest several billion pounds in energy transition, creating thousands of new well-paid jobs."

Shell separately said it made $5.1 billion in the second quarter, in what it called a strong performance despite a drop since the January to March period.

It raised dividends for shareholders by 15 per cent despite what chief executive Wael Sawan said were lower commodity prices and seasonally lower trading.

The announcements come with inflation in the UK at 9.5 per cent and voter frustration high about the cost of living. Energy prices have been high for more than a year amid a supply squeeze exacerbated by Russia's invasion of Ukraine.

"Good luck to these companies if they make investments and make profits but these are unearned, unexpected profits," Labour's shadow climate minister Ed Miliband told BBC Breakfast.

"The energy companies should be made to pay their fair share so we can tackle the cost-of-living crisis."