Centrica's Profits Plummet by Nearly 39% in 2025
The owner of British Gas, Centrica, has announced a significant decline in its full-year profits, leading to a pause in its share buyback programme. Adjusted earnings for 2025 fell to £1.42 billion, a sharp drop from £2.3 billion the previous year, marking a decrease of almost 39%.
Mild Weather and Investment Challenges Impact Performance
Centrica attributed the profit slump to a "challenging" year, driven by milder weather conditions that reduced household consumption of gas and electricity. This resulted in lower profits for British Gas, which saw adjusted profits fall to £309 million from £364 million, despite a 1% growth in its customer base to nearly 8 million accounts.
Chief Executive Chris O'Shea commented on the situation, stating, "The environment has been challenging, and performance has varied across the business." He added, "Pausing the buyback enables us to prioritise investment that creates lasting value for shareholders, while continuing to deliver reliable, affordable energy."
Market Reaction and Strategic Investments
Following the announcement, shares in Centrica dropped almost 8% in early trading, making it the worst performer on the FTSE 100 index. The company is currently engaged in multibillion-pound investments, including the new Sizewell C nuclear plant in Suffolk and the acquisition of Europe's largest gas import terminal at Grain LNG for £1.5 billion last year.
Additionally, Centrica plans to invest billions in its gas storage facility at Rough. These spending initiatives come as profits in its energy retail business have declined, despite growth across various retail segments for the first time in over a decade.
Broader Business Impacts and Future Outlook
Profits from energy trading were adversely affected by geopolitical volatility, and outages in the UK's nuclear reactor fleet further eroded earnings. However, profits across the wider retail business remained stable at £557 million, supported by higher earnings from energy services and business solutions divisions.
The pause in share buybacks reflects Centrica's strategy to focus on long-term investments amid fluctuating market conditions and operational challenges.
