A milder winter in 2025 and shifts in customer energy tariff choices led to a significant reduction in profits for Centrica, the parent company of British Gas. While the company expanded its customer base for the first time in over a decade, the financial performance shows a marked decrease compared to the previous year, prompting strategic decisions like pausing share buybacks to fund substantial future investments.
Financial Performance Decline in 2025
Centrica's financial results for 2025 indicate a considerable drop in operating profits. The company reported £814 million in operating profits, a decrease from £1.55 billion in 2024. Adjusted earnings also fell to £1.42 billion in 2025, down from £2.3 billion the year before. This decline was partly attributed to the cessation of energy crisis allowance payments, which previously allowed suppliers to recoup costs.
Operating Profits: Fell from £1.55 billion (2024) to £814 million (2025).
Adjusted Earnings: Decreased from £2.3 billion (2024) to £1.42 billion (2025).
British Gas Energy Supply: Earnings for households and businesses in this division saw a substantial drop to £297 million, down from £751 million in 2023.
Contributing Factors to Profit Reduction
Several factors influenced Centrica's reduced profitability in 2025. A warmer winter in the UK meant fewer customers utilized heating systems, directly impacting energy consumption. Furthermore, customers switching from variable energy rates to cheaper fixed-rate tariffs also contributed to an £80 million hit to profits within the household supply arm. Falling wholesale energy prices and weaker returns from gas storage were also cited as contributing elements.
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Mild Weather Impact: Unseasonably warm conditions across the UK and Europe led to reduced heating demand.
Tariff Shifts: Customers moving to fixed-rate tariffs from variable rates affected profitability.
Market Conditions: Falling wholesale energy prices and lower returns from gas storage played a role.
Customer Base Growth Amidst Challenges
Despite the profit slump, Centrica experienced customer growth across its retail businesses for the first time in over a decade. The company's customer base for British Gas in the UK reached 7.5 million. This growth was partly due to acquiring customers from defunct energy providers such as Rebel Energy and Tomato Energy. However, in the residential sector, Centrica did experience a net loss of 70,000 customers, bringing the total residential customer base down from 7.53 million in 2023 to 7.46 million in 2024.
Overall Retail Growth: Simultaneous customer expansion across all retail businesses, a first in over ten years.
Acquisitions: Gained customers from collapsed energy firms Rebel Energy and Tomato Energy.
Residential Customer Change: A net loss of 70,000 household customers occurred.
Strategic Investments and Paused Buybacks
Centrica has outlined ambitious investment plans, including spending between £600-800 million per year on its transition strategy up to 2028. A significant portion of this investment includes a £1.3 billion expenditure in 2025 for a 15% stake in the Sizewell C nuclear power plant. The company also plans to invest at least another £700 million in 2026 and aims to invest billions in its gas storage facility at Rough. To support these expenditures, Centrica has paused its share buyback program.
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Future Investment: £600-800 million annually until 2028 for transition initiatives.
Sizewell C Stake: £1.3 billion invested for a 15% ownership in the nuclear plant.
Gas Storage Investment: Billions earmarked for the Rough gas storage facility.
Share Buyback Pause: Temporarily halted to prioritize investments.
Expert Perspectives on Centrica's Performance
Industry analysts have commented on Centrica's recent performance and future strategy. Aarin Chiekrie, equity analyst at Hargreaves Lansdown, noted that the company's headline numbers were "a tough read as energy markets adjusted to more normalised conditions." Chiekrie also highlighted the significant investments planned, suggesting they "could put a strain on cash flows if returns aren’t as high or quick as planned."
Caroline Simpson, a campaigner for the Warm This Winter campaign, criticized the energy system's "stark inequality," pointing to substantial profits made by energy companies like British Gas.
Future Outlook and Regulatory Considerations
Centrica's chief executive, Chris O'Shea, stated that pausing the buyback enables the company to prioritize investments that create lasting shareholder value while ensuring reliable and affordable energy. The company is also awaiting a decision from the government on the future of gas storage in the UK, following a recent consultation. Centrica's ability to generate predictable, regulated returns from its Sizewell C investment is seen as a positive factor for future financial stability.
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Investment Priority: Focus on creating lasting value through strategic capital allocation.
Regulatory Environment: Awaiting government decisions on gas storage.
Sizewell C Returns: Expected to provide predictable, regulated income.
Evidence Summary
| Source | Key Information |
|---|---|
| BBC News (Article 1) | Warmer winter reduced profits for Centrica; customer base grew for the first time in over a decade; profits fell to £814m from £1.55bn; customers increased to 7.5 million after acquiring from Rebel and Tomato Energy. |
| Evening Standard (Article 2) | Centrica's profits dropped due to normal market conditions; £80m hit to household supply arm from warm weather; plans to invest £600-800m annually until 2028; £1.3bn investment in Sizewell C for 15% stake. |
| The Guardian (Article 3) | Centrica paused share buyback amid falling profits; energy retail business profits declined despite overall retail growth; adjusted earnings £1.42bn (2025) down from £2.3bn (2024); plans to invest billions in Rough gas storage. |
| The London Current (Article 4) | Mild winters impact British Gas profits; UK energy market trends and fixed-rate tariffs influence profitability; growth partly due to acquiring customers from failed suppliers. |
| The Mirror (Article 5) | Centrica profits hit by cessation of energy crisis allowance payments; British Gas supply division earnings £297m (last year) from £751m (2023); lost 70,000 household customers, reducing base to 7.46 million in 2024. |
| This is Money (Article 6) | Centrica profits slump due to warmer weather and lower energy prices; falling wholesale prices and weaker gas storage returns cited; 2% customer base fall in services & solutions division in H1; April was third warmest on record. |
| Birmingham Mail (Article 7) | British Gas profits criticized; Centrica reported a "good year" with improved operations and increased investment; investment in energy transition to ensure affordable energy; campaigner noted "stark inequality" in energy profits. |
Sources:
Evening Standard: https://www.standard.co.uk/business/business-news/centrica-british-gas-ireland-b1271597.html
The Guardian: https://www.theguardian.com/business/2026/feb/19/british-gas-owner-centrica-pauses-share-buyback-profits-plummet
The London Current: https://thelondoncurrent.co.uk/british-gas-profits-take-a-hit-how-mild-winters-reshape-energy-choices/
The Mirror: https://www.mirror.co.uk/money/british-gas-owner-centrica-profits-34713970
This is Money: https://www.thisismoney.co.uk/money/markets/article-14935803/Centrica-profits-slump-amid-warmer-weather-lower-energy-prices.html
Birmingham Mail: https://www.birminghammail.co.uk/news/cost-of-living/british-gas-under-fire-after-31044528
