Centrica Earnings Slide as Investments Drive Strategic Reset

Charles Kennedy

Thu, February 19, 2026 at 5:49 PM GMT+9 4 min read

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Centrica plc posted lower earnings in 2025 but raised its dividend and pressed ahead with major investments as it targets a step-up in EBITDA by 2030.

The UK-based energy and services group reported adjusted EBITDA of £1.4 billion for 2025, down from £2.3 billion in 2024, with adjusted operating profit falling to £814 million from £1.6 billion. Adjusted earnings per share declined to 11.2p from 19.0p a year earlier, reflecting weaker commodity pricing, nuclear outages, and subdued trading conditions.

Statutory results were hit harder. Operating profit fell to £0.1 billion from £1.7 billion in 2024, as Centrica booked £0.7 billion in exceptional charges and remeasurement losses on energy derivatives, alongside £0.5 billion in impairments tied to late-life gas fields and nuclear investments outside Sizewell C. The group reported a statutory loss per share of 1.5p, compared with a 25.7p profit in 2024.

Despite the earnings decline, Centrica increased its full-year dividend by 22% to 5.5p per share, up from 4.5p in 2024, in line with its progressive dividend policy. The company returned £1.1 billion to shareholders in 2025, including £0.8 billion via share buybacks and £0.2 billion in dividends, and completed a £2 billion buyback program before pausing further repurchases to prioritize investment opportunities.

Net operating cash flow fell to £0.7 billion from £1.1 billion in 2024, while free cash flow swung to a £0.2 billion outflow, reflecting a sharp increase in capital expenditure to £1.2 billion—more than double the prior year’s £0.6 billion. Adjusted net cash declined to £1.5 billion from £2.9 billion, although the balance sheet remains robust.

Retail adjusted EBITDA held steady at £0.6 billion, supported by cost discipline and improved performance in Home Services, offsetting weaker UK Home Energy Supply earnings. The company reported customer growth across all retail businesses for the first time in more than a decade, alongside improved customer satisfaction metrics.

Optimisation—encompassing gas and power trading—saw adjusted EBITDA halve to £0.2 billion amid challenging market conditions.

Infrastructure earnings dropped more sharply. Adjusted EBITDA fell to £0.7 billion from £1.4 billion, reflecting lower realized commodity prices, the pause in Rough gas storage operations, and nuclear outages.

Centrica’s 2025 strategy focused on repositioning the portfolio toward more stable, infrastructure-like earnings. The group committed £1.3 billion (capped) to the 3.2 GW Sizewell C nuclear project, securing a real allowed return on equity of 10.8% and targeting a double-digit internal rate of return. It expects the project to build an £8 billion regulated asset base by commercial operation.

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The company also acquired a 50% stake in the Grain LNG terminal alongside Energy Capital Partners, investing £0.2 billion in equity for an expected unlevered IRR of around 9%, with potential upside from site expansion.

In parallel, Centrica continued reshaping its upstream exposure, divesting most of Spirit Energy’s producing assets except the Morecambe Hub, and extending operating lives at Heysham 1 and Hartlepool nuclear plants to March 2028. It also formalized a partnership with X-energy to explore advanced modular reactor deployment in the UK.

Looking ahead, Centrica is targeting £1.7 billion in adjusted EBITDA by the end of 2028, rising to £2.0 billion by 2030, supported by its transformation program, incremental infrastructure investment, and anticipated nuclear life extensions. The guidance midpoint allows for ±£0.3 billion annual volatility.

The strategy aligns with broader UK energy policy trends, emphasizing energy security, nuclear expansion, and LNG import resilience following years of gas market volatility. By reallocating capital from upstream production to regulated and contracted infrastructure, Centrica is seeking to reduce earnings cyclicality and improve long-term visibility.

While 2025 marked a step down from the windfall conditions of prior years, management framed the year as one of structural repositioning—trading near-term earnings strength for long-duration, infrastructure-backed cash flows.

By Charles Kennedy for Oilprice.com

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