A LONG harsh winter helped British Gas to rack up hefty profits in the first quarter of the year, it emerged yesterday.

Parent company Centrica said it expected a strong performance this year, after households cranking up the heating in the freezing winter weather led to seven per cent higher gas usage than last year, with electricity consumption also up two per cent.

Profits at the residential business will be “heavily weighted towards the first half” of this year, the company added. Despite the profit boost, British Gas said average bills for its 15.9 million customers in the first quarter of the year were lower than a year earlier due to its seven per cent gas price cut in February.

The prediction of more strong profits at British Gas comes after the UK’s biggest energy supplier delivered record operating profits of £595m last year – up from £376m in 2008.

British Gas has gained more than 200,000 new residential customers so far this year, as well as 100,000 servicing contracts.

The group installed 20 per cent more central heating systems than a year earlier – thanks to cheaper pricing and the Government’s boiler scrappage scheme – but said costs rose due to the higher number of boiler breakdowns in the cold snap.

However, the healthy profits from the group’s energy supply arm were offset by much tougher conditions for Centrica’s upstream production business.

While gas and oil production was 59 per cent ahead of the previous year – helped by acquisitions – wholesale gas prices are still low due to a market glut and weak demand.

Centrica expects the weak commodity price to continue to impact the production business this year, despite strong returns from its supply business.

Meanwhile, higher than expected start-up costs on contracts and heavy competition has dented first-half trading at support services firm Interserve.

The Reading-based company said cost pressures on some newer public sector deals meant more of its profits would fall in the second half of the year than usual.