- Bills hiked nearly 25% in past year and a half - undermining 2% January cut
- Average dual fuel bill 200 higher than two years ago
- Wholesale prices falling and are well below their 2008 peak
By Harry Glass
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British Gas has come under fire for not passing on wholesale gas price drops quickly enough to struggling customers - as owner Centrica posted a 23 per cent profit rise.
The UK's biggest energy supplier - which serves 15.8million UK households - said its 345million profits were largely down to the miserable weather in the first half of the year.
The rise suggests that British Gas Residential made some 1.9million of profit a day as consumers struggle to cope after the average dual fuel bill has risen to 1,310 a year - more than 200 higher than two years ago.
Double bill: British Gas hiked prices in December 2010 and August 2011
Consumer groups attacked the energy giant for raising prices in December 2010 and August 2011 by 24.9 per cent, or 256 in total – and only cutting them by 2 per cent, or 26, in January this year.
The average household energy bill for a British Gas customer was 1,100 in January 2011 – today it is 1,260, 160 higher.
Ann Robinson, director of consumer policy at uSwitch.com, says: 'These soaring profits show that British Gas could and should cut its prices ahead of winter. This would go some way to acknowledging the pressure customers are under as they struggle to afford their household bills.
'It will also ensure that they too get to share the benefits of lower wholesale prices. As Britain’s largest supplier, if British Gas cuts its prices other suppliers will be under pressure to follow suit.
'A second wave of price cuts this year will not only help customers to better afford their bills, but would also be an olive branch signalling the industry’s true commitment to rebuilding trust and confidence with its customers.'
Average bills
Richard Hall, head of energy regulation at Consumer Focus, said: 'Wholesale prices rose a little earlier in the year but are now falling and they are still a long way from their peak in 2008.
'We have long questioned whether drops in wholesale costs find their way through to household bills.'
Centrica said high energy use because of the wet weather and raised tariffs offset the higher commodity prices and other costs, but also explained the profits jump was down to weak comparitive figures last year.
Chief executive Sam Laidlaw said: 'Centrica has performed well in the first half of 2012 despite challenging market conditions, although the increase in earnings must be placed in the context of unusually low levels of consumption and profits in the UK in the first half of 2011.'
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But Centrica claims to control just 15 per cent of a customer's bill through its operating costs and profit margins.
The stronger performance at British Gas helped Centrica's underlying earnings rise 14 per cent to 767million - slightly better than City expectations. Its upstream gas and oil production business saw profits rise 28 per cent to 682million, buoyed by 1.2billion of acquisitions.
The group yesterday announced a 1.4billion investment with GDF Suez to develop a major North Sea gas field off the coast of Norfolk, creating some 4,000 jobs. It is believed to be the largest gas discovery in the southern North Sea for 25 years.
However, it said it will review the future of gas-fired plants at Peterborough and Roosecote in Cumbria because of challenging conditions. It follows its decision to close a station in King's Lynn.
The company said changes to carbon allowances will render much of its UK gas-fired generation fleet unprofitable from 2013.
Ann Robinson added: 'As we inch towards winter, I would also remind consumers that they too can take steps to cut the cost of their energy. There is currently just under 300 difference between the most expensive and the cheapest energy tariff on the market.
'This is a substantial saving that can be boosted still further by ensuring that your home is energy efficient too. These two steps offer us all the best protection against the high cost of household energy today.'
Yesterday, Consumer Focus’ quarterly complaints league table showed a decrease in the average number of complaints made against the 'big six' energy suppliers - British Gas, E.ON, EDF Energy, npower, Scottish and Southern Energy (SSE), and Scottish Power – fell by 7 per cent.
EDF Energy was the worst-rated firm for complaints, and the only company to have seen the number of customer gripes increase during the first three months of the year. The energy firm said that the poor service was due to the final part of the migration process of 5.5million customers to a new computer system.
Consumer groups accuse British Gas of profiteering - Daily Telegraph
Audrey Gallacher, director of energy at Consumer Focus, said that consumers will be shocked to see such a big rise in profits when British Gas has been warning of the need for price increases.
"The disconnection between profits and prices risks deepening consumer distrust over energy bills. Wholesale prices rose slightly at the start of the year but have fallen and are now a long way from their peak," she said.
"Our economy needs profitable companies, but energy is an essential service we all need to heat our homes and keep the lights on. So customers need to know they are being charged a fair price through a competitive and transparent market. Customers need guarantees that falls in wholesale prices will be passed on as fairly and quickly as rises in wholesale prices. They also need commitments from British Gas in the light of these profit figures that there will be no customer price rises this year."
Capital Shopping Centres rents fall as shops go bust - Reuters UK
LONDON |
LONDON (Reuters) - Capital Shopping Centres (CSC), which owns 15 of Britain's biggest malls, said like-for-like net rental income fell 2.3 percent in the first half of 2012 as retailers went bust in the country's increasingly tough economic climate.
The figure was 181.8 million pounds ($281.3 million) in the six months to 30 June, with rental increases in some parts offset by tenant failures, the company said in a results statement on Thursday.
"The unsettled macro environment remains a significant influence on the UK retail property occupational market," the company said.
"For CSC, tenant failures are the most direct effect of the weak environment, with some short term disruption while agreements are reached with successor or replacement operators."
CSC owns more than 16 million square feet of shopping space valued at 7 billion pounds in some of the UK's biggest malls like Lakeside in Essex, south-east England, and the Trafford Centre in Manchester.
The economic impact of a sodden summer was laid bare last week by dire news from major retailers showing that torrential rain had hurt already weak demand in an economy showing few signs of pulling out of recession.
CSC said footfall was down one percent in the year to date, outperforming the UK benchmark, which dropped by 3 percent, due to the fact its malls were among the biggest and most popular in the country.
($1 = 0.6463 British pounds)
(Reporting by Tom Bill; Editing by Mark Potter)
Capital Shopping First-Half Profit Rises on Rent Income Gain - Bloomberg
Capital Shopping Centres Group Plc (CSCG), the U.K.’s biggest shopping-mall owner, said first-half profit excluding items rose on higher rental income.
Profit excluding changes to asset values and one-time items climbed to 70 million pounds ($108 million), from 66 million pounds a year earlier, the London-based company said in a statement today. Adjusted earnings per share increased to 8.1 pence from 8 pence. Analysts expected 8.5 pence a share, according to the average of four estimates compiled by Bloomberg.
While the U.K. economy entered its second recession in three years in the first quarter, retailers are favoring large malls that attract crowds with global brand names. That allowed Capital Shopping to offset tenant failures by signing leases with new brands at higher rents.
“Our prime U.K. regional shopping centers have continued to show considerable resilience, with robust operating metrics supporting sound financial results,” Capital Shopping Chief Executive Officer David Fischel said in the statement.
Net rental income increased to 182 million pounds from 178 million pounds a year earlier. Like-for-like net rental income fell 2.3%. Net income dropped to 78.9 million pounds from 181.9 million pounds as year-earlier gains on acquisitions and property revaluation weren’t repeated.
The company’s shopping center income performed worse than other U.K. real estate investment trusts with the decline in comparable net rental income and a 1 percent decrease in footfall, Mike Prew andRobert Duncan, analysts at Jefferies Group Inc. in London, said in a note today.
“The operating data was generally weaker than its peers” and Capital Shopping’s leverage “is still too high given the group’s grandiose development plans,” they said.
Capital Shopping fell 1 percent in London trading at 324.4 pence as of 9:22 a.m. The stock has gained 3.9 percent this year, less than the FTSE All-Share Real Estate Investment Trust Index (FAREITS), which is up 18 percent.
To contact the reporter on this story: Dalia Fahmy in Berlin at dfahmy1@bloomberg.net
To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net
Shopping is changing and we need to keep up with that’ - miltonkeynes.co.uk
That’s the view of bosses at thecentre:mk who are overseeing some of the biggest changes in the short history of the new city.
Robert Hall, centre director of thecentre:mk and other members of the senior management team faced a sceptical public when renewed plans for a 90,000 sq-ft three-storey Primark store in the Secklow Gate bridge gap went on two days of public display on Friday.
The display is a precursor to a full planning application being lodged with Milton Keynes Council.
The £40million 107,000 sq-ft extension would mean the demolition of half of the bridge and the relocation of the market stalls to an open area close to the new Primark entrance.
Retail chiefs see the Primark investment as a major coup for the city and one which other regional centres would give their “right arms for”. The plan, which could be completed by October 2015, is in addition to the £27million being spent on refurbishing John Lewis, a £6million extension and refit of Next and a £4.5million refurbishment at House of Fraser, which completed at the end of last year.
Jonathan Weymouth, development director at thecentre:mk, said Milton Keynes has slipped to 39th place in national shopping destination rankings, behind places like Livingston in Scotland, Guildford and Cambridge and needed to reverse that trend. The shopping centre does however remain in the top 10 for retail spending.
Mr Weymouth said: “You have to move, change and invest. You cannot be complacent, you’ve always got to look forward.”
Primark is understood to have wanted to open a major store at thecentre:mk alongside one at stadium:mk because Milton Keynes is still growing and because the population comprises its target market.
Robert Hall, the centre director, sees the scheme as the first part of an integrated plan to open up and link up the different parts of the city centre, making it easier for people to move between Xscape, the Theatre District, Midsummer Place, the Food Centre and thecentre:mk.
Currently an estimated 53 million people visit the central area each year but only half that number go to thecentre:mk. Mr Hall believes that is because the centre is a confusing place to visit.
And as people increasingly look to one-stop visits to shop, to go to the new casino at Xscape and to the Theatre District, Milton Keynes must become more integrated in its thinking, Mr Hall said.
But residents who visited the public dispay of plans on Friday remained implaccably opposed, which may indicate a fierce planning battle ahead. .
CAUTION EVERYBODY ...... My summer gas bill is usually about £3 for the quarter- yes three pounds! However, I was horrified by my recent quarterly bill which showed that I owed them £58.90. My heating engineer came to check for a leak but found none, however, he told me to ring British Gas and demand a new meter. I rang, and without any hesitation - which was odd - I was given a date. SO PLEASE TURN OFF YOUR GAS: DON'T USE YOUR WATER....AND GO AND CHECK IF YOUR METER'S STILL RUNNING WHEN IT SHOULDN'T BE. Maybe this is where part of their profits are coming from.
- Heather, Sea Breeze, 26/7/2012 15:28
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