British Gas owner pauses share buyback as profits plummet

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The owner of British Gas has seen a sharp fall in profits as warmer than normal weather allowed households to turn down their thermostats and more customers switched to cheaper fixed price deals.British Gas reported lower profits for 2025 despite modest growth in its customer base after milder than expected weather meant households used less gas and electricity.Meanwhile, more of its customers are taking advantage of cheaper fixed rate tariffs to buy their energy leading to lower revenues for the supplier.About a third of its customers are now on fixed rate deals, up from a quarter at the end of 2024, the supplier said.As a result its adjusted profits fell to £309m for the year, from £364m the year before, even as the number of household customers grew by 1% to almost 8m accounts.

Profits across the wider retail business were flat on the previous year at £557m because of higher earnings from its energy services and business solutions divisions.The supplier’s parent company, Centrica, lost hundreds of millions of pounds in market value after it paused its plan to buy back shares from shareholders after the group’s full-year profits slumped by almost 39%.Shares in Centrica tumbled by as much as 7% on Thursday morning after the FTSE 100 company told shareholders it would suspend share buybacks while it channels investment into areas that could deliver more predictable returns in the future.The company reported adjusted earnings of £1.42bn for 2025, down from £2.

3bn the year before, after a “challenging” year for the business.The company’s chief executive, Chris O’Shea, said: “The environment has been challenging, and performance has varied across the business.”In addition to lower revenues from households, the company’s energy trading earnings were hit by geopolitical volatility on the global energy markets.Outages in the UK’s nuclear reactor fleet, of which Centrica owns a minority stake, also eroded earnings for the year.In the future, Centrica plans to focus on areas of the energy industry that can deliver “stable and predictable” returns, including government-backed investments in nuclear power, carbon capture and gas storage.

“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 said.Centrica is making significant investments in the new Sizewell C nuclear plant in Suffolk, and hopes to build up to 6GW of advanced nuclear reactors alongside the US-based X-Energy to develop a fleet of advanced modular reactors (AMRs) in the UK.In addition, the company last year bought Europe’s largest gas import terminal at Grain LNG for £1.5bn, and hopes to invest billions in its gas storage facility at Rough.

The investments are perceived as a gamble on Europe’s growing appetite for low-carbon electricity to support the boom in AI data centres and the need for more secure gas import alternatives after Russia’s full-scale invasion of Ukraine.“Our strategy is simple,” said O’Shea.“Support the energy transition while making stable and predictable returns.2025 is a turning point and in 2026 we will build on this momentum.”O’Shea said the company remained in “very constructive discussions” with the government over the future of the Rough gas storage site, one year after the boss hinted that it may be forced to shut the site unless the government provided financial support to keep the UK’s last remaining large-scale storage site open.

It has struggled to turn a profit in recent years.Centrica reopened the North Sea facility in late 2022 amid Europe’s energy crisis, when rocketing prices helped make Rough financially attractive.But as European gas market prices have cooled Rough has put financial pressure on the company.
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