Centrica, parent of British Gas has published it’s preliminary results today.
In years gone by, these announcements have typically been marred by accusations of “profiteering” and “ripping customers off”. A lot of these comments often came from taking an overarching view of the Centrica business, rather than looking specifically at British Gas the retailer to residential and business customers.
Anyway, the highlights appear to be:
Centrica group revenue is flat from 2008 to 2009, current at £21.96bn (5% growth year on year)
- Centrica group (adjusted) operating profits £1.86bn (7% decline year on year)
- British Gas residential customer accounts 15.7m (a fraction 0.9% increase year on year)
- British Gas residential Operating profit £595m (an increase of £219m or 58% year on year)
- British Gas residential Operating margin 7.6% (up from 4.8% in 2008)
So what does it mean. In short, Centrica and British Gas have weather the 2008/2009 storm very well, and have come out smelling of roses. Full credit. Yes profits (for BG) are up, but at a meagre 7.6% operating margin (up from a tough 4.8% in the previous year) you have to say, they make an awful lot of effort for not a great deal of return.
That all said – consumer groups will look at this, especially following the drastically cold winter the UK has had, and will contest that British Gas should have passed on price reductions earlier that it did (which was earlier this month). However, they do need to realise that British Gas is neither a charity nor a not-for-profit – they could of course ask for de-privatisation, but I’m not sure that will go down too well with anyone!
British Gas, I think, should no longer be seen as the lame ducks in the race to be Britain’s best energy supplier, rather the model for other to follow. They’ve broken the mould and have seemingly started to deliver something markedly better to the UK consumer than they’re used to receiving.
