Profits will double, says British Gas owner

THE owner of British Gas predicts its profits will double despite warmer weather as energy trading and production offset a weaker performance in its retail division.

Centrica said it is expecting annual group profits towards the top end of analysts forecasts of £1.5bn-£2.1bn, which compares with £948m during last year.

The FTSE 100 company now plans to buy back up to 5pc of its shares, worth up to £250m, after saying earlier this year that it would consider returning surplus capital to shareholders.

High energy prices, the result of shortages caused by Russia’s war in Ukraine, have boosted energy giants while triggering a cost of living crisis.

As well as owning British Gas, Centrica produces and trades electricity and gas from assets including a 20pc stake in Britain’s nuclear power stations and wells in the North Sea. While the latter is performing strongly, Centrica said it expected British Gas’s profits to be lower than the £210m forecast by analysts, as warmer weather and economic pressures curb demand.

The higher group profit forecast comes at a sensitive time, with Jeremy Hunt, the Chancellor, believed to be considering extending a windfall tax on the energy sector in next week’s Autumn Statement.

Centrica, said it was “acutely aware of the difficult environment facing many people” and yesterday announced an extra £25m to support customers, meaning it has now voluntarily made £50m available for customer support, on top of statutory schemes.

It came as National Grid, which owns the Britain’s main electricity and gas transmission networks, announced a 50pc rise in profits after it bought the UK’S largest electricity distribution network, Western Power Distribution.

John Pettigrew, National Grid’s chief executive, said that warmer weather had helped boost gas stocks.