British Gas owner shares tumble after buyback was paused
London-listed energy giant Centrica shares plunged nine per cent on Thursday morning after the group paused its share buyback programme in the face of a major earnings hit.
The owners of British Gas reported lower 2025 earnings than in the previous year, but the group says it was resilient in a challenging market.
The group’s adjusted operating profit fell some 50 per cent, from £1.6bn in 2024 to £800m, while adjusted pre-tax profits landed at £1.4bn as energy prices stabilised following the previous year’s spikes.
Despite lower earnings, Centrica increased its full-year dividend by 22 per cent to 5.5p per share, signalling confidence in its “progressive” payment policy.
The FTSE-100 group returned £1.1bn to shareholders in 2025, including an £800m share buyback. However, the buyback programme is being paused to focus on “quality of investment opportunities”.
British Gas builds out infrastructure
Management is now targeting pre-tax profits of £1.7bn by 2028, rising to £2bn by 2030.
Chris O’Shea, group chief executive, said: “2025 has been a year of real momentum, and we have made bold investments as we continue the fundamental transformation of Centrica.”
Aarin Chiekrie, an equity analyst at Hargreaves Lansdown, said: “Lower commodity prices and lower energy price volatility weighed on performance, causing total profits to fall sharply.”
O’Shea recently warned that electricity bills will be higher in 2030 than they were after the Russian invasion of Ukraine, as the government pushes through major upgrades to the UK’s grid infrastructure.
Chiekrie added: “Centrica’s also investing heavily to build out its renewable energy infrastructure and extend the life of its nuclear assets. Results aren’t going to come cheap or quickly, though, with between £600-800 million per year set to be invested in the transition out to 2028, which could put a strain on cash flows if returns aren’t as high or quick as planned.”
“As a result, share buybacks have been put on hold to help provide some financial wiggle room,” Chiekrie added.