Energy giant Centrica – British Gas owner – set to rake in £1.7billion profit | City & Business | Finance
It expects to report earnings per share of over 30p, meaning a net profit of about £1.75billion. It is fuelled by the surge in wholesale gas and electricity prices on the back of Russia’s war in Ukraine. City analysts had forecast £1.32billion.
Earnings are up more than sevenfold from the 4.1p a share it made in 2021.
Centrica also said its net cash balance at the end of 2022 is likely to be above £1billion. That compares with £680million last year.
Critics say the energy windfall tax does not go far enough.
Fuel Poverty Action said: “This shows that if the will were there [for a tougher tax], there is enough money to ensure that everyone can heat their home. There is no need for anyone to be cold this winter.”
In May, Rishi Sunak as chancellor introduced the energy profits levy on North Sea oil and gas firms, increasing their effective tax rate from 40 to 65 percent.
In the Budget, successor Jeremy Hunt hiked it to 75 percent. In total, the levy is expected to raise £45billion.
Russ Mould, an investment director of broker AJ Bell, said: “Higher energy prices are not bad news for everyone, with Centrica again upgrading its forecasts.
“How much credit the business itself can take for its revived fortunes is an open question.”
Experts at Cornwall Insight predict household energy bills will fall more than £700 by July and below the Government’s £3,000 quarterly bill guarantee as wholesale power prices ease. But Cornwall’s Craig Lowrey warned families will still “face costs that many can ill afford”.
Suppliers are also under fire for prepayment meters. Citizens Advice says 3.2 million customers last year ran out of credit and couldn’t afford to top up. That’s one person every 10 seconds left in the cold and dark.
The charity wants a ban on suppliers forcing people onto the meters until there is no risk they can be cut off.