British Gas reveals profits rise

The Centrica-owned provider is expected to reveal that full year profits from the division rocketed to around £576 million last year from £95 million in 2006, according to Citigroup analysts.

The figures look certain to generate an outcry from consumer groups, coming so soon after last month's bill increases, which saw gas and electricity prices increase on average by 15%.

The expected profits haul is set to contribute towards a surge in group-wide figures, with analysts predicting that Centrica's profits rose 39% to £2 billion last year.

But much of the additional earnings is thought to have come from generation and energy storage operations, with soaring wholesale gas costs unlikely to see its British Gas residential arm replicate the £533 million achieved in the first half of the year.

The company made most of its money in the first half of 2007, despite cutting prices on two occasions during the period. Margins are likely to have come under pressure since April, when prices in the wholesale market started to climb.

British Gas last month became the third major supplier to increase tariffs, after npower and French-owned EDF and claimed on making the decision that wholesale costs had risen by 51% for gas and 61% for electricity.

It added its residential arm would make a loss this year if it failed to pass on the increases.

But consumer groups have accused suppliers of being slow to pass on cuts and quick to pass on rises.

British Gas was the first to cut prices last year after seeing wholesale costs come down.