DCSIMG

Market watch: Centrica hopes to keep spotlight off public anger over energy profits

  • by SCOTT REID
 

SCOTTISH Gas parent Centrica will be doing what it can to deflect attention from the public anger stirred up by bumper energy sector profits.

Research by Oxford Economics suggests that the group’s 
activities in the UK support some 174,000 jobs and generate tax payments equivalent to £158 for every household.

Among the other statistics thrown up by the economic analysis are the size of the contribution Centrica made to GDP in 2012 – some £14.1 billion – and the £9.4bn of goods and services purchased by the group from more than 6,000 businesses.

However impressive those numbers may be, the firm is certain to stoke public anger by delivering a hike in profits at its energy supply business.

The City is predicting the group’s residential arm will 
deliver full-year earnings of £598 million, up from £544m in 2011.

The results come amid mounting questions over the fairness of energy prices after British/Scottish Gas hiked 
tariffs by 6 per cent for 8.5 million households at the end of last year.

Centrica will argue on Wednesday that the profit margin at its British Gas division – where US retail boss Chris Weston is poised to take the helm from Phil Bentley – has not increased despite cost-cutting, remaining at 5 per cent.

ITV Studios, which makes 
ratings winners such as I’m A Celebrity, will help ITV report surging profits as its recovery plan remains firmly on track.

The figures are also likely to fuel takeover rumours, amid speculation that private equity firms are circling the group.

Direct Line Insurance Group will be in focus on Thursday when it delivers its first set of annual results since its stock market debut last year.

The company raised £787m for former owner Royal Bank of Scotland when it starred in London’s biggest flotation of 2012.

City experts predict pre-tax profits of £279m for 2012, despite challenging markets, 
particularly in motor insurance following a surge in claims levels in recent years.

 

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