Published On: Thu, Jul 30th, 2015

British Gas Profit Up 99% As Owner Cuts Staff

The parent company of British Gas is to cut 10% of its workforce, 4,000 staff, as it moves to counter falling oil and gas prices.While announcing its half-year results, Centrica said it planned 6,000 job losses but would hire 2,000 new people as it set new priorities following a strategic review of the business, which includes the country’s largest supplier of energy to households.

British Gas

British Gas made an adjusted operating profit of £528m in the six months to 30 June – up 99% on the same period last year.

It said a colder spring was the core reason for the increase, with gas consumption rising 11%.

But Ann Robinson, director of consumer policy at uSwitch.com, claimed “sky-high bills” were also a factor.

She said: “Wholesale prices, which make up around half of energy bills, have plunged to their lowest level in five years.

“Although British Gas is the only ‘big six’ supplier to reduce gas prices twice this year, the fact remains that the combined cuts will lower its average dual fuel bill by just 6%.

“Meanwhile, why are consumers still waiting for EDF Energy, E.ON, npower, ScottishPower and SSE to make further reductions?

“Suppliers must do the right thing by passing on savings to help consumers, who are struggling with bills which are £700 a year higher than they were ten years ago.”

Centrica’s group adjusted operating profits fell 3% to £1bn over the six months.

Commenting on the strategic review, the company said half the 6,000 job losses would be achieved through redundancy and its focus would now be on customer-facing businesses.

Its new investment plans, including millions to achieve more connected homes, reflected that while it said cost-savings would total £750m over five years.

Chief executive Iain Conn said: “The conclusion of our strategic review provides a clear direction for the business.

“Centrica is an energy and services company. Our purpose is to provide energy and services to satisfy the changing needs of our customers, and as such we will focus our growth ambitions on our customer-facing activities.

“Alongside a major Group-wide efficiency programme, this will underpin long-term shareholder value, as we target operating cash flow growth of 3-5% per year and deliver a progressive dividend policy.

“With Centrica delivering solid financial and operational performance in the first half of the year, and making good progress in strengthening its balance sheet and reducing net debt, the Group is well placed to compete materially against the emerging long-term trends in global energy markets.”