Centrica, the owner of British Gas, has reported a 25% decline in full-year revenue to £19.9bn.

The energy company has announced a slump in underlying operating profit, which dropped by 44% to £1.6bn. This was down significantly from 2023 when its supplier British Gas received £500m in recovery costs following changes by the energy regulator.

Ofgem had allowed energy suppliers to adjust the energy price cap and recover the unexpected costs of the energy crisis in H1 2023, which helped profits in Centrica’s British Gas division soar to £751m, up from the £72m it took in 2022.

The latest results have shown that British Gas’ energy profits shrunk to £297m in 2024.

Centrica said that British Gas would deliver an improved financial result in 2025, as it continues a recovery towards a “medium-term” sustainable adjusted operating profit range by 2026.

Chief executive, Chris O'Shea, said: “Looking ahead, I want to see Centrica continue to focus on the areas that make the biggest difference. We are investing in the energy transition, ensuring our customers have the energy they need, when they need it at a price they can afford.

“Everything we do must deliver an appropriate return, and our investments during 2024 demonstrate our ability to invest responsibly and profitably.”

Equity analyst at Hargreaves Lansdown, Aarin Chiekrie, commented that Centrica’s headline figures were a “tough read”, as energy markets returned to more normalised conditions last year.

“Lower commodity prices and lower energy price volatility weighed on performance, causing profits to fall sharply,” Chiekrie added.

“On top of that, 2023’s one-off £500m recovery of costs from prior periods in the consumer-facing British Gas energy division made for an extremely tough comparable period. This was largely expected though, and despite the large declines, profits still landed ahead of market forecasts.

“In the meantime, Centrica is continuing to invest in building infrastructure to support the energy transition and is making good progress towards its medium-term profitability targets across its different divisions.”

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