Centrica has announced a significant fall in profits to £814m in 2025, down from the £1.55bn it reported in 2024.

The British Gas owner blamed difficult market conditions for its trading unit and mild weather last year that stifled demand and prices.

Centrica, reporting its preliminary results for the 2025 calendar year, revealed that profits in its residential energy supply business fell to £163m, down from £269m in the previous year. It estimated an £80m headwind as the impact from “warmer than normal weather”, it said.

The energy company also reported that its free cash flow was a £167m outflow, compared to a £989m inflow in 2024, as the latest figure included the impact of a significant increase in capital expenditure to £1.23bn – compared to £564m last year.

Centrica confirmed that it returned £1.06bn to shareholders in the year, up from £718m in returns in 2024, through share buybacks and £237m made through dividend payments.

However, the company confirmed it would pause its future share buyback plans after its fall in profits last year.

Chief executive, Chris O’Shea, said that 2025 had been a “year of real momentum” as it continued to invest in transforming the group.

“The environment has been challenging, and performance has varied across the business,” O’Shea added.

“However, we have remained disciplined, delivering strong operational performance and achieving customer growth across all our retail businesses simultaneously for the first time in over a decade.”

Centrica has continued to make significant investments in the Sizewell C nuclear plant in Suffolk, and last year purchased the gas import terminal at Grain LNG in a £1.5bn deal.

As part of the energy company’s capital expenditure, it also said its Meter Asset Provider (MAP) was outperforming expectations.

“Pausing the buyback enables us to prioritise investment that creates lasting value for shareholders, while continuing to deliver the reliable, affordable energy that households and businesses need to power economic growth through the transition,” O’Shea added.

After releasing its results, the FTSE 100 company saw its share price fall by more than 7% in today’s early trading.

Head of markets at AJ Bell, Dan Coatsworth, commented that while the drop in earnings wasn’t quite as large as expected, Centrica had provided “disappointing news” on share buybacks, which “led the share price to power down in response”.

“Centrica, with its healthy exposure to the wholesale market alongside its ownership of the British Gas retail division, benefited from the surge in energy markets in recent years,” Coatsworth commented. “The momentum has now been lost.

“Centrica is hitting pause on buybacks so it can allocate spending to growth projects including the Sizewell C nuclear power. Executing on these ventures will be challenging and will put a dent in the company’s healthy cash position but could deliver more stable earnings if they ultimately prove successful.

“Having been fuelled by a favourable environment since 2022, Centrica must now prove its mettle without a helping hand from rising prices.”

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