British Gas owner Centrica paused its share buyback programme on Thursday, following a nearly 39% drop in 2025 group core profit, sending its shares down as much as 9.5% in morning trading.
The company reported adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of £1.42 billion for the year ended December 31, 2025, a significant decrease from the £2.3 billion reported in 2024. Despite the decline, the figure exceeded analyst expectations of £1.3 billion, according to Reuters.
Centrica CEO Chris O’Shea described 2025 as a “challenging” year, citing significant investments as the company undergoes a fundamental transformation. He stated that pausing the share buyback would allow the company to prioritize investments that create lasting value for shareholders, while ensuring a reliable energy supply.
The downturn in profit was attributed to several factors, including unfavorable weather conditions leading to reduced energy consumption, geopolitical volatility impacting energy trading, and outages within the UK’s nuclear reactor fleet. Specifically, the company’s energy trading arm, Optimisation, is forecasting core profit of approximately £250 million for 2026, falling short of its earlier estimate of £300-400 million.
British Gas, Centrica’s retail arm, also experienced a decline in profits, falling to £309 million for the year from £364 million in 2024, despite a 1% increase in household customer accounts to nearly 8 million. Warmer-than-normal weather contributed to a 7% decrease in underlying operating profits within the retail division, reaching £424 million.
Analysts at JPMorgan indicated that the reduced profit outlook and planned transformation costs, estimated at between £600 million and £800 million through 2028, could lead to downgrades in earnings estimates and continued pressure on the company’s share price. Centrica shares were on track for their largest daily drop since July 2024.
Despite the challenges, Centrica is targeting a core profit of £1.7 billion by 2028, increasing to £2 billion by 2030, supported by its ongoing transformation program and anticipated extensions to the lifespan of its nuclear assets, which remain subject to approval.
The company’s performance made it the worst performer on the FTSE 100 on Thursday, significantly outpacing the second-largest faller, Rio Tinto, which experienced a 3.7% decline following a 14% drop in net profit to $10 billion for 2025.
