Centrica Pauses Buybacks as Record Warmth and Competition Slash Profits
London, Thursday, 19 February 2026.
Centrica’s operating profit nearly halved to £814 million in 2025 amid record warm weather, prompting a pause in share buybacks to fund investments despite a 22% dividend hike.
Weather and Wholesale Markets Weigh on Performance
Centrica plc (LSE: CNA) faced a challenging fiscal landscape in 2025, as adjusted operating profit fell sharply by -47.552% to £814 million, down from £1.55 billion in 2024 [1][3]. The company attributed this decline largely to a normalization of market conditions following the energy crisis, alongside the impact of the UK’s warmest year on record, which saw average temperatures reach 10.09°C [1]. Consequently, lower demand for heating combined with falling commodity prices resulted in a significant contraction in earnings, with statutory operating profit plummeting to £0.1 billion from £1.7 billion the previous year [3]. The bottom line was further impacted by a statutory basic earnings per share (EPS) loss of 1.5 pence, a stark reversal from the 25.7 pence profit recorded in 2024 [2][3].
Retail Resilience Amidst Shifting Consumer Habits
Despite the broader downturn, the British Gas Retail division demonstrated resilience, though it was not immune to the sector’s headwinds. Retail adjusted operating profit dipped to £424 million compared to £458 million in 2024 [3]. This segment faced a dual challenge: reduced consumption due to the mild weather and a structural shift in customer behavior. As energy prices stabilized, consumers increasingly sought certainty, with the proportion of Centrica’s UK customer base on fixed-price products rising to 32% by the end of 2025, up from 25% a year prior [3]. While the company successfully added 91,000 customers through the Supplier of Last Resort (SoLR) process following the failures of Rebel Energy and Tomato Energy, rising bad debt—which increased to £418 million—continued to weigh on margins [1][3].
Strategic Pivot: Investment Over Buybacks
In a significant strategic shift, Centrica announced the pause of its share buyback programme, signaling a transition from returning surplus capital to shareholders to funding long-term infrastructure projects [1][2]. Having completed a £2 billion buyback programme and returned £1.1 billion to shareholders in 2025 alone, management has chosen to redirect capital toward “bold investments” intended to secure future growth [2][3]. Group Chief Executive Chris O’Shea emphasized that pausing the buyback allows the firm to prioritize investments that create “lasting value,” specifically highlighting the company’s commitment to the energy transition [2]. Accordingly, capital expenditure more than doubled to £1.2 billion in 2025, driven by major commitments including the Sizewell C nuclear power project and the acquisition of the Grain LNG terminal [3].
Infrastructure and Optimization Under Pressure
The volatility that previously bolstered Centrica’s Optimisation and Infrastructure divisions subsided in 2025, leading to reduced contributions from these high-margin units. Optimisation adjusted EBITDA fell to £196 million, significantly below the previous year’s £381 million, while the Infrastructure division saw its adjusted EBITDA nearly halve to £728 million [3]. Operational metrics reflected this downturn; nuclear generation volumes decreased to 6.6 TWh from 7.5 TWh, and the realized power price dropped to £90/MWh from £132/MWh in 2024 [3]. Furthermore, the Rough gas storage facility swung to an adjusted operating loss of £45 million, underscoring the difficulties inherent in a lower-volatility pricing environment [3].