Households pay for Centrica 's dividend hike

30th Jul 2009 11:56

Gas supplier Centrica refused to indicate if it will cut gas bills further despite soaring first half profits at its British Gas household arm, which helped to offset lower income elsewhere.British Gas, Centrica's residential arm, has been fiercely criticised by consumer groups for failing to cut tariffs to match the tumbling price of wholesale gas. Operating profits overall in the six months to June fell by 5% to £936m, from £989m but the residential contribution jumped by 80% to £299m, up from £166m in the same period last year. The interim dividend rises by 5% to 3.66p. Pre-tax profits jumped from £448m to £875m excluding one-off items. Revenues rose by 20% to £11.66bn.Centrica cut prices for its British Gas customers by 10% this year but said any further cuts were dependent on several factors, including the weather, the situation in Ukraine and winter prices. Operating profits at British Gas in total, including business users, jumped 56% to £476m, boosted by lower commodity prices and high demand during colder than expected weather in January and February.Going forward, Centrica said low commodity prices continue to shift profit from the upstream to the downstream. "Although the net effect of this shift, coupled with the lower first half result in Direct Energy, will be to reduce group operating profit, this is expected to be offset by a lower effective tax rate, now forecast to be below 40%, leaving 2009 forecast earnings for the Group's existing business broadly in line with expectations," it said. "Average gas consumption is down 6% year-on-year and electricity is down 1% but we compensate for that with our services business which is growing strongly," chief executive Sam Laidlaw added.Laidlaw made no further comment on its bid for Venture Production other than to say it had contingencies in place if the deal falls through."We do have a number of bilateral negotiations ongoing that could easily replicate the opportunities that we see with Venture," Laidlaw told reporters on a conference call.