British Gas recorded operating profits of £742m in 2010, up 24 per cent on the previous year, according to its parent company Centrica.
The utilities company increased its customer base by 267,000 in 2010, reaching 16 million people, with British Gas increasing its profit per customer.
Centrica announced pre-tax profits of £2.8bn for 2010, with a 29 per cent rise in operating profits to £2.4bn.
85 per cent of British Gas' profits came in the first half of 2010 as a price cut in February and cold weather led to a spike in energy usage.
The news follows November's announcement that British Gas was raising energy bills by seven per cent, blaming a 67 per cent rise in wholesale gas prices.
Retail energy suppliers are currently undergoing a review by Ofgem after concerns were raised about excessive profits. A report is due in March.
Centrica, who have large scale operations in North America as well as the UK, is expected to gain a windfall of around £1bn on the increasing value of its unsold stock of gas and energy supplies, in addition to its 2010 operating profits.