BY COMFORT OGBONNA
Centrica has suspended its share buyback programme after reporting a sharp 39% decline in group core profit for 2025, as the owner of British Gas pointed to a “challenging” market environment and uneven performance across its operations.
The British energy group said weaker margins, driven in part by unfavourable weather and difficult trading conditions, weighed heavily on earnings over the past year. Mild temperatures reduced demand for heating, while volatility in wholesale energy markets created additional pressure on profitability. These headwinds come at a time when the broader European energy sector is adjusting to shifting supply dynamics and regulatory scrutiny following years of heightened price swings.
In response, Centrica has been accelerating efforts to streamline its portfolio. The company has divested several non-core assets as it sharpens its strategic focus on liquefied natural gas (LNG) infrastructure and energy security-related investments. Management believes concentrating on gas storage, trading optimisation and LNG capabilities will position the group more competitively in a market increasingly shaped by supply resilience and geopolitical uncertainty.
Looking ahead to 2026, Centrica expects its Rough gas storage facility — one of the UK’s largest — to reach a break-even position. The site has undergone significant redevelopment in recent years as Britain seeks to bolster domestic storage capacity amid global supply risks. However, the company signaled more modest expectations for its Optimisation unit, part of its energy trading arm. Core profit from that division is projected to be around £250 million, below its previous guidance range of £300 million to £400 million.
Despite the steep fall in core profit, Centrica delivered adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of £1.42 billion for 2025. That figure exceeded the £1.29 billion forecast by analysts in an LSEG poll, suggesting that while performance deteriorated year-on-year, it still came in stronger than market expectations.
The decision to pause share buybacks reflects management’s cautious stance as it navigates volatile market conditions and prioritises balance sheet strength. Investors will likely be watching closely for signs that trading conditions stabilise and that the company’s renewed focus on LNG and energy infrastructure begins to deliver more consistent returns.
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