British Gas owner Centrica’s profits have fallen back after they hit record highs during the energy crisis, as it said the UK was moving to a “more normalised” gas and electricity market.

Centrica said underlying earnings in its British Gas household supply arm slumped to £159 million in the six months to June 30, from £969 million a year ago.

It added that around £500 million of the fall was due to the absence this year of energy crisis allowance payments.

Regulator Ofgem allowed energy suppliers to recover costs that they had racked up during the crisis, but this has now come to an end.

The wider Centrica group reported underlying earnings of £1.04 billion for the first half of 2024, but said group profitability will be “heavily weighted” to the first half.

Energy companies have come under fire from consumer groups for their outsize profits in the wake of the energy crisis.

Centrica chief executive Chris O’Shea said: “I know I’m at risk of sounding like a broken record here, but for a company to be sustainable it must be profitable… If companies fail the costs go on to consumer bills.”

He said the fall in profit this year came “against the backdrop of more normalised market conditions”.

Centrica also said it is extending its programme of returning money to shareholders, as it sits on a £3.2 billion cash pile accumulated while energy prices were soaring and profits were at their peak.

It said it will buy £200 million more in shares from investors, adding to the £1 billion buyback programme that started in 2022.

Mr O’Shea also said the company is still “ready to invest” in the planned UK nuclear power plant Sizewell C, but said any decision is dependent on other parties, including the newly elected Labour Government.

He said: “An investment decision this year would be dependent upon how the Government wants to move and how the Sizewell C company wants to move – so, we’re able to move as quickly as the other parties.”

Mr O’Shea added that he hopes the UK’s new state-owned energy investment firm, GB Energy, could be an investment partner to Centrica on some projects in future.

“It’s great that there’s more capital that’s going to come in because that brings down prices, that reduces prices for consumers.”

He said there is “no conflict” between returning cash to shareholders and Centrica’s investment plans.

“We’ll have distributed £1.7 billion to shareholders over a couple of years. We expect to invest several billion pounds as we go forward… We’ve got money to invest and and it’s reasonable for shareholders to expect dividends and returns.”

Centrica’s bad debt charge was £240 million, down from £284 million at the same point last year, but still higher than historic levels, showing that the number of customers who cannot pay their energy bills remains high.

Mr O’Shea said this is mainly down to cost-of-living pressures, adding: “It’s far more stressful for somebody trying to figure out how to pay their electricity bill than it is for us figuring out how to deal with bad debt.”

Centrica launched a “You Pay: We Pay” scheme earlier this year, where it matches energy payments made by customers who are struggling to pay their bills pound for pound.