It really depends on what infoamtion your supplier has. If they've never had a reading from you - they may use readings from the previous occupier, if they are not available they may use demographic infoamtion to produce an estimation. Depending on the circumstances the reading may have been deliberately exaggerated to cause you to call them with the up-to-date reading.

In any case moving forward ALWAYS check your statements and correct any estimation - over time their estiamtions may get closer to what you're actually using but they will need more readings from you first.

"How can they justify that sort of bill?"

I think the below answers your question:

"They've just told me it's 233 having given a reading"

I've just received an estimated bill for over 600 quid for a one bed flat for three months, it's never been anywhere near that high before. How can they justify that sort of bill? They've just told me it's 233 having given a reading, ridiculous!