Bold headline: Warmer winter squeezes profits at Centrica, British Gas’s parent.
A milder-than-usual winter in the UK reduced heating usage among British Gas customers in 2025, contributing to a profits dip for Centrica, the company’s owner. In addition, many customers moved from variable-rate energy plans to cheaper fixed-rate tariffs, which also weighed on profits by about £80 million at the UK’s oldest energy supplier.
Overall, Centrica’s operating profit dropped to £814 million last year, down from £1.55 billion in 2024.
Despite these headwinds, Chief Executive Chris O’Shea noted a positive development: British Gas grew its UK customer base for the first time in more than a decade. The customer count rose to 7.5 million after Centrica assimilated Rebel Energy and Tomato Energy following those providers’ collapse.
O’Shea added that the business faced a challenging environment and that performance varied across segments.
The Met Office reported that 2025 was the UK’s warmest and sunniest year on record, with an average temperature of 10.09°C.
In early trading, Centrica’s shares were down more than 7% in London, reflecting investor caution amid the earnings update.
Discussion questions: Do you think the shift to fixed-rate tariffs will help or hurt energy suppliers in the long run? How should Centrica balance attracting new customers with sustaining profitability in a weather-driven market? What other factors could influence profits in the energy sector moving forward?
