British Gas’ annual profits soared more than tenfold to £751m in 2023 from £72m in 2022, its parent company Centrica announced in its preliminary results published on Thursday. 

Centrica reported total cash returns of £800m to shareholders in 2023, with dividend per share increasing by 33% to 4p from 3p the previous year. 

For the year ending December 2023, Centrica made an adjusted operating profit of £2.8bn compared with £3.3bn the previous year due to decreased seasonal demand and lower volatility in wholesale prices. 

The company’s free cash flow experienced a decline of 11.2% from £2.4bn in 2022 to £2.2bn in 2023. However, the adjusted net cash increased by £2.7bn in 2023 from the previous year’s £1.19bn due to the company’s strong liquidity and robust balance sheet.

“We have done a lot we can be proud of in 2023: we have paid over £1bn in tax; we have created over 1,000 new UK-based jobs as we continue to invest in customer service,” said Chris O’Shea, Centrica’s chief executive. 

The company said that it has taken steps to enhance energy supply security by extending the lifespan of nuclear power stations, granting a carbon storage licence for Morecambe Bay, and nearly doubling the Rough gas storage capacity in the North Sea, off the east coast of England.

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According to the company, strong underlying operational performance from 2023 has continued into early 2024. In retail, Centrica does not expect a repetition of the 2023 one-off benefits from cost recovery in British Gas Energy. 

However, the underlying performance of British Gas Energy is in line with its medium-term expectations of £150m–250m of adjusted operating profit, it said. 

The performances of British Gas Services & Solutions and Irish utility company Bord Gáis in 2023 “provide strong foundations to drive an improved result in both these businesses in 2024”, according to the report.

In the first half of 2023, British Gas achieved its highest-ever profits, earning £969m, an increase of more than 900% from the £98m it made during the same months last year, as Offshore Technology reported in July 2023. 

The notable earnings came after the UK energy regulator, Ofgem, changed its price cap to help customers claim compensation during the energy crisis. To mitigate the risk of energy suppliers going bust, Reuters reported that Ofgem intends to implement a one-off increase in its price cap on energy bills from April 2024 to March 2025. 

Centrica said it added another £40m towards supporting UK and Ireland customers on top of the £100m allocated since the start of 2022.