British Gas owner Centrica profits

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  • Top-end of Centrica’s annual pre-tax earnings forecasts total over £1bn
  • British Gas owner Centrica expects annual earnings to reach top end of forecast
  • But the group said it faced a number of ‘uncertainties’ amid rising inflation

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British Gas owner Centrica expects to post bumper annual results at the top of its targets, while millions of households have been slapped with huge energy bill rises.

Forecasts for the group’s annual pre-tax earnings are currently between £739million to £1.4billion.

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Centrica said it had delivered ‘strong operational performance’ in the first four months of the year.

Energy bills for millions of households outside of a fixed tariff surged this month, after the price cap was hiked by 54 per cent to £1,971 a year by regulator Ofgem amid soaring wholesale prices.

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Bumper forecast: British Gas owner Centrica has revealed it expects to post bumper annual results at the top of its targets

It is predicted that the price cap could jump to as much as £2,900 in October again.

While upbeat about its prospects for the year ahead, Centrica said a number of ‘uncertainties’ remained.

It added: ‘Significant uncertainties remain over the balance of the year, including the impacts of weather, commodity prices movements, asset performance and the potential for increased bad debt charges given the current inflationary pressures in the UK.’

The group said it had been boosted by ‘strong’ volumes across its nuclear and gas production operations in the last few months.

Its trading arm also increased volumes of gas and renewable energy to, it claimed, improve UK supply amid pressure from the Russian invasion of Ukraine.

Centrica also told shareholders that it has ‘managed increased commodity price volatility well’ in recent months.

Its British Gas Services & Solutions arm was affected by ‘some supply chain disruption and higher inflation’ over the period, which hit its costs and customer demand.

‘We expect those headwinds to continue to at least partially offset the underlying operational progress for the duration of this period of higher inflation,’ the group said.

On the issue of customer bills, the group said it was hiring a new team of staff to help struggling customers.

It said: ‘We are investing over £50million in supporting our customers with 500 additional UK based customer service roles in British Gas Energy, 1,000 new UK engineering apprenticeships, and the British Gas Energy Support Fund which provides grants of up to £750 to help customers pay their energy bills.’

Centrica shares have risen sharply today and were up 4.42 per cent or 3.18p to 75.12p in late morning trading. The group’s share price has climbed over 30 per cent in the past year.

The FTSE 250-listed group, which saw its adjusted profits jump 44 per cent to £118million in 2021, will publish its interim results on 28 July alongside an update on its business priorities and financial framework.

On the up: Millions of UK households have been slapped with surging energy bills

On the up: Millions of UK households have been slapped with surging energy bills

While Centrica posted an upbeat update today, there are mounting calls for energy firms, like oil and gas companies, to be slapped with a windfall tax on their profits.

Energy giants BP and Shell both posted record quarterly profits in recent weeks.

But, on Monday, Chancellor Rishi Sunak held firm in his opposition to a windfall tax on energy companies, arguing that it would ‘deter investment at a time we need it most – not least in renewable energy’.

Prime Minister Boris Johnson has previously said it would be better for companies to invest the money into renewable energy rather than pay an extra tax.

But, John Allan, Tesco’s chairman, today told Radio 4’s Today Program he believes a windfall tax on energy producers would help families struggling amid the cost of living crisis.

He said: ‘I think there’s an overwhelming case for a windfall tax on profits from those energy producers, fed back to those most in need of help with energy prices.

‘I think that would be the single biggest thing that could be done.’

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