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Profits up 11 per cent but British Gas plans another price increase… as bosses line up a 10million windfall
Company profits for 2012 soared to 606million But price rises for 12million customers could come as early as next winter
have soared by 11 per cent on the previous year to 606million.
Another price increase: British Gas is today expected to warn of another punishing energy price hike despite a massive surge in profits
The company’s owner Centrica did even better, with a 15 per cent gain to roughly 2.8billion.
Despite this, price rises for its 12million customers could come as early as next winter.
Meanwhile, Centrica’s top five executives will collect a shares windfall predicted to top 10million.
Company chiefs will be given millions of shares under a long-term bonus scheme set up three years ago, which is linked to the firm’s performance.
Bosses will benefit from the fact that they will not receive the shares until after the end of the current tax year.
As a result, they will cash in on Chancellor George Osborne’s cut in the top rate of tax from 50 per cent to 45 per cent.
According to Centricas accounts, its chief executive Sam Laidlaw will gain from the shares bonanza
The UK’s biggest energy supplier put up tariffs six per cent in the teeth of the winter chill, pushing up bills by 80 to an average 1,350 a year.
Directors from the company appeared on television this morning to defend the results.
Chris Jansen, managing director of services and commercial at Centrica, said a colder winter last year contributed to the rise in profits.
'I completely understand our profits announced today will create a reaction with customers,' he told Daybreak.
'I think it’s important to remember that in 2011 it was a very, very mild winter … so the country used a lot less gas, and actually our profits in 2011 were 20 per cent down on 2010.'
Asked whether customers would face further price increases, Mr Jansen replied: 'It’s impossible for me to say that, that’s like looking at a crystal ball.
'The general trend for energy prices are prices are increasing. All we say to customers is let’s do what we can to control energy bills.
'Prices might be going up but bills don’t need to if we control our energy use.'
Ian Peters, managing director of residential energy for British Gas, told the BBC: 'If I look into the future we have no plans to put prices up even higher, the gas prices are relatively calm.'
Asked on BBC Breakfast how long into the future – and if the firm was committing to not putting prices up – he said: 'I can’t do that because the gas market is volatile.
'But right now, as I say, it is very early in the year, we work in a very competitive market and it is not in our interest or our customers’ to put prices up. So we will do everything we can not to do that.
'What I want to say is that we will move heaven and earth to keep our customers’ bills down. We have the lowest bills in the industry.'
Alastair Buchanan, head of energy regulator Ofgem, has warned of an energy crisis as Britain becomes more reliant on expensive imported gas.
Price rises will also go to subsidies for wind farms, nuclear power stations and free insulation for the vulnerable.
According to Centrica’s accounts, its chief executive Sam Laidlaw, finance chief Nick Luff, head of energy Mark Hanafin and the head of its US arm, Chris Weston, will gain from the shares bonanza.
Another beneficiary is the departing managing director of British Gas, Phil Bentley. His total departure package could be worth 10million.
His departure was confirmed today.
Company sources said the shares are part of a long-term incentive, not a windfall, while the date of the hand-over was decided long before the 50 per cent tax rate was scrapped.
Centrica has tried to pre-empt a furore over pay with a study on its positive impact.
Mr Laidlaw said: ‘At a time of uncertain economic prospects, our activities across the UK are even more important to secure employment, put the supply chain to work and contribute our fair share of tax.’
The company employs some 33,000 people in the country, while its tax bill is expected to be around 1.1billion in 2012. Unlike many rivals, it is wholly British and pays its tax here.
Richard Lloyd, executive director at consumer champion, Which, said: ‘People are bound to question whether they’re paying a fair price for energy when they see big profits announcements.
'Centrica’s analysis won’t change that view as record-high bills land on millions of doormats.'