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British Gas reports drop in profits


British Gas have reported a small drop in profits from their residential business in 2013, citing factors such as warmer weather and increasing wholesale costs.

Operating profit for the full year was recorded at £571 million, a 6% reduction from £606 million in 2012. Furthermore, parent company Centrica also posted a small reduction in profits during the same time period as they reported a profit of £2.7 billion in 2013, down from £2.74 billion in the previous year.

These reductions in profit were despite overall revenue from parent company Centrica rising by 11% to £26.6 billion for 2013, with the reason for the reduction in profits being blamed largely on rising wholesale gas and electricity prices.

Additionally, British Gas claimed that customer numbers dropped by 2% (362,000) in 2013, whilst it has also lost a further 100,000 in 2014 so far. However, they also went on to state that customers numbers have began to stabilise following a recent price reduction.

Centrica’s Chief Executive, Sam Laidlaw, remained positive despite the reduction in profits, stating that he felt “good strategic progress” had been made in 2013 as they invested in the “gas value chain”. However, he did also go on to say that 2014 would "remain challenging, with margin pressures and unusual weather patterns on both sides of the Atlantic, rising unit costs in the North Sea and weak economics for gas storage and gas-fired power generation".

All the major energy companies have been criticised by both the press and government figureheads in recent months for raising energy prices, with British Gas being the first to do so in October last year when they increased prices by 9.2%.

The most recent criticism came from Energy Minister Ed Davey who wrote a letter to energy regulators, calling for them to study the dominance British Gas, asking them to consider all possible remedies, “including a break-up of any companies found to have monopoly power to the detriment of the consumer.”

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