The owner of British Gas has reported a slump in its annual profits after the supplier was ousted as Britain’s largest provider of gas and electricity for the first time last year.
The supplier’s parent company, Centrica, reported adjusted earnings of £2.3bn for last year, down by a third from 2023 when its profits reached £3.5bn after a £500m windfall from the energy regulator.
Ofgem allowed all suppliers to recover the unexpected costs of the energy crisis in the first half of 2023 by adjusting the energy price cap, which helped British Gas to a profit of £751m.
The household supplier’s operating profit slumped to £297m last year, but Centrica said that excluding the impact of the one-off Ofgem allowance meant its performance was “relatively comparable” to the year before.
British Gas managed to keep its customer base relatively steady despite rising competition in the market. It was nonetheless toppled from its position as Britain’s biggest energy supplier almost four decades after it was privatised under Margaret Thatcher by Octopus Energy.
British Gas serves 7.46m households compared with 7.53m in 2023. Its overall customer base, including businesses and its thermostat users, fell by just 1% to 10.18m from almost 10.27m last year.
Octopus grew its share of the market to 23.7% of households in Great Britain by the end of last year, while British Gas had 23.1%.
Centrica’s chief executive, Chris O’Shea, said it was “a good year” for the company after it improved operations and ramped up investment.
He said: “This has resulted in happier customers and more innovative propositions, but there is so much more we can do. Looking ahead, I want to see Centrica continue to focus on the areas that make the biggest difference.
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“We are investing in the energy transition, ensuring our customers have the energy they need, when they need it at a price they can afford.”