Warmer weather hits profits at British Gas owner
Warmer weather in the UK meant more British Gas customers turned down their heating in 2025, contributing to a slump in profits at its owner Centrica.
British Gas took a £80m hit from the warmer weather, while customers switching to cheaper fixed-rate energy tariffs from variable rates was also blamed for operating profits at its residential supply business falling 39% to £163m last year.
Despite the shift, chief executive Chris O'Shea said British Gas had grown its customer base for the first time in more than a decade.
The number of customers increased to 7.5 million in the UK, after the firm absorbed the customer base of Rebel Energy and Tomato Energy when those suppliers went bust.
Taking on those 91,000 customers offset the number of households leaving British Gas to find better deals.
The UK had its warmest and sunniest year on record in 2025, according to the Met Office, with an average temperature of 10.09C.
"The environment has been challenging, and performance has varied across the business," Mr O'Shea said.
Across the whole Centrica group, operating profits fell to £814m last year, down from £1.55bn in 2024.
Hargreaves Lansdown equity analyst Aarin Chiekrie said the number of households with British Gas and its customer satisfaction scores "continue to trend in the right direction".
But he added that the wider energy market had affected Centrica's profitability.
"Lower commodity prices and lower energy price volatility weighed on performance, causing total profits to fall sharply," Chiekrie said.
Dan Coatsworth, head of markets at AJ Bell, said the "momentum" Centrica had enjoyed when gas prices spiked a few years ago "has now been lost".
"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."
Centrica said it had paid out more than £1bn in dividend payments and share buybacks in 2025.
But announcing its full-year results, the company announced it would pause its share buyback programme to focus on investing in the business, including allocating more money to projects including the Sizewell C nuclear power in Suffolk.
Shares in Centrica were trading down more than 7% in London on Thursday morning.
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