The owner of British Gas has revealed it could return more cash to shareholders, risking controversy as customers are hit with rising bills.
The energy giant Centrica is buying back £500m of shares, and its chief executive, Sam Laidlaw, told the Sunday Telegraph it could extend the programme next year.
Centrica opted to return “surplus capital” to investors in February after pulling out of plans to build the next generation of nuclear power plants in Britain with EDF Energy, amid uncertainty over the project.
The report said Centrica had enough cash to fund a similar buyback programme again next year as investment in other UK power projects stalls and it generates earnings from North American asset purchases.
Laidlaw said: “We have got the headroom but we haven’t made any firm decisions.”
Last month, the group reported a 3.2% increase in profits in its residential energy arm to £356m as it cashed in on the freeze in the first half of the year – and also hinted at further price rises for hard-pressed customers. The supplier profited from the bitterly cold weather after raising tariffs by 6% in December.
First-half revenues from household supply of gas were up 16% to £3.7bn, compared with the same period in 2012, as Britons cranked up the thermostats. Average residential consumption by volume was up 13% for gas and 1% for electricity.
Operating profits at Centrica were up 9% from £1.45bn to £1.58bn.
Centrica said its profits would have been higher but were held back by a new duty to pay for energy efficiency measures in customers’ homes, which helped push up environmental costs 37% for the period.
It warned that the scheme, which has landed it with a £1.4bn bill, would “inevitably impact on customer bills ultimately” and that the company was facing “upward pressure on costs”.
British Gas owner risks customer anger as it considers buying back more shares