British Gas profits jump 900% to record £969m after energy price cap increase

British Gas has reported record profits of almost £1billion – an increase of almost 900 per cent – after its retail supplier arm was boosted by the price cap increase during the energy crisis.

British Gas Energy, the firm’s retail energy division, saw underlying earnings leap to £969m from £98m a year earlier.

Centrica, which owns British Gas, has revealed it swung to a £6.5bn operating profit in the first six months of the year while earnings at its retail supplier arm soared by 889 per cent.

The group’s huge half-year earnings for the six months to 30 June compare with operating losses of £1.1bn a year earlier.

The energy giant said the result was buoyed as Ofgem’s price cap in the first half of the year – when customers saw their bills limited to £2,500 a year under the Energy Price Guarantee – allowed it to recoup losses seen a year earlier – to the tune of about £500m.

On an underlying basis, operating profits soared to £2.1bn from £1.3bn a year ago.

Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “These profits are a further sign of Britain’s broken energy system.

“At a time when household energy debt is spiralling to record levels and energy bills remain double what they were just a few years ago, the profits posted will be greeted with disbelief by those struggling through the crisis.

“There will of course be questions about how these profits were made, but the reality is that energy firms are operating on a playing field set by the Government.”

It comes as Shell failed to deliver another bumper crop of profits in the last quarter, with the business falling short of market expectations.

The oil giant said on Thursday that it had seen its adjusted earnings more than halve in the three months to the end of June when compared with the same period a year ago.

Adjusted earnings reached just under $5.1bn (£3.9bn) during the quarter, down from $11.5bn (£8.9bn) a year earlier.

Last year Centrica more than tripled its adjusted operating profit, which reached £3.3bn in 2022 amid turbulence in global energy markets.

Energy companies experienced a hit to their supplier profit margins last year when wholesale prices spiked after Russia’s invasion of Ukraine, but the price cap helped keep customer bills lower.

Ofgem has set the 2023 price cap at a level that enables firms, including British Gas, to recover some of their recent losses as wholesale prices of gas have reduced.

This story is being updated.