(Commonwealth_Europe) Warmer weather across the UK in 2025 meant many households simply did not need to turn their heating on as often, and that had a noticeable impact on the bottom line of Centrica, the parent company of British Gas.
The company revealed that milder conditions knocked around £80 million off British Gas’s performance, as customers used less energy during what turned out to be the UK’s warmest and sunniest year on record. According to the Met Office, the country recorded an average temperature of 10.09°C in 2025, an unusually high figure that reduced demand for heating and, in turn, energy sales.
As a result, operating profits at British Gas’s residential supply arm fell sharply, dropping 39% to £163 million last year. The weather was not the only factor weighing on performance. Many clients also substituted variable tariffs for inexpensive fixed-rate deals, restraining the company’s margins at a time when energy prices were more steady than in former tempestuous years.
Despite the decline in profits, there were some brighter spots. Chief executive Chris O’Shea pointed out that British Gas managed to grow its customer base for the first time in over a decade. The total number of UK customers rose to 7.5 million, partly because British Gas took on 91,000 customers from failed suppliers Rebel Energy and Tomato Energy when those firms collapsed. Absorbing those accounts helped offset the number of households that left in search of better deals elsewhere.
Still, across the wider Centrica group, profits were significantly lower. Operating profits fell to £814 million in 2025, down from £1.55 billion the previous year—a steep drop that reflects a broader cooling of the energy market. Analysts say the company is now facing a very different environment compared to the extraordinary gains seen when global gas prices surged a few years ago.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, noted that while customer numbers and satisfaction scores are moving in the right direction, softer energy markets have squeezed returns. Lower commodity prices and reduced price volatility meant there were fewer opportunities for outsized profits.
Similarly, Dan Coatsworth, head of markets at AJ Bell, said the strong momentum Centrica experienced during the spike in gas prices has now faded. At the height of the energy crisis, companies with exposure to wholesale markets, like Centrica, benefited enormously from soaring prices. Now, with markets calmer, earnings have normalized.
Even so, Centrica said it returned more than £1 billion to shareholders in 2025 through dividends and share buybacks. However, the company also announced it would pause its share buyback program to channel more funds into long-term investments. Among the projects it plans to support is the Sizewell C nuclear power development in Suffolk, a major infrastructure project aimed at strengthening the UK’s future energy security.
Investors reacted negatively to the results, with Centrica’s shares falling more than 7% in London trading on Thursday morning. The decline suggests markets were concerned about the sharp drop in profits and the tougher trading conditions ahead.
The outcomes highlight how delicate energy companies are to both the weather and wider market undercurrents. After years of unusual instability and record earnings motivated by global energy shocks, Centrica now seems to be changing to a more stable but less profitable environment while trying to place itself for long-term growth and energy changeover investments.
