Centrica bosses defend firm as profits decline
CENTRICA executives yesterday emphasised the benefits of the company’s size to Britain in the wake of energy secretary Ed Davey’s suggestion to break up the power giant, as it unveiled disappointing but in-line full-year results.
“The benefit of integration is that because we have the size and scale we have we are able to contract new suppliers for the UK, we’re able to also shield our customers from very volatile commodity prices,” said boss Sam Laidlaw, citing the £14bn of new gas supply deals Centrica had secured for the UK.
New chairman Rick Haythornthwaite, who joined at the start of the year, spoke of the 170,000 employees Centrica supports in its supply chain and the £10bn of goods it procures from over 6,000 UK companies.
Last week Davey wrote to regulators asking them to scrutinise Centrica’s gas supply profit margins and suggested that the company could be broken up if it were “found to have monopoly power to the detriment of the consumer”. His comments heighten the political uncertainties overshadowing the FTSE 100 firm, following Labour leader Ed Miliband’s pledge to freeze energy bills until 2017 if elected.
Centrica, which owns big six supplier British Gas, posted a one per cent decline in group earnings to £1.37bn. British Gas’ profits fell six per cent to £1.03bn, impacted by a milder winter and higher costs. The supplier lost 362,000 customers last year, which Laidlaw blamed on new regulations that required different price tariffs.
Shares rose 2.1 per cent yesterday.