Centrica (LON:CNA) executives used the company’s latest results presentation to outline what CEO Chris O’Shea described as “significant progress” in 2025, while also acknowledging a tougher backdrop for its commodity trading activities. Management emphasized a continued shift toward more regulated and contracted earnings, an expanded investment program, and a transformation effort aimed at improving customer experience, driving growth, and reducing costs.
2025 results: EBITDA of £1.4 billion and EPS just over 11 pence
CFO Russell O’Brien said Centrica reported adjusted EBITDA of £1.4 billion for the year and adjusted earnings per share of just over 11 pence. Operating cash flow was over £900 million, while free cash flow was a £200 million outflow after investment rose to £1.2 billion.
Segment performance and what drove the year
O’Brien said Retail and Optimization generated almost £800 million of EBITDA, with Retail contributing £574 million, described as broadly flat year-on-year. Within Retail, UK Home Services delivered almost £170 million of EBITDA on 7% top-line growth, with margins expanding from 4.3% to 6.8% as the company focused on propositions, pricing, and costs.
UK Home Energy Supply was described as resilient but impacted by market and weather effects. O’Brien said the market continued to pivot to fixed-price tariffs, which dampened margins, while weather was an £80 million headwind in the UK. He also noted a £42 million gain tied to an energy price guarantee scheme reconciliation for revenue from prior periods. Bad debt remained a key issue across the industry, and O’Brien said the bad debt charge in UK Home Energy Supply rose to around 3% of revenue, with industrywide past-due debt cited as over £4 billion.
Optimization (Centrica Energy) posted a softer result, primarily due to gas and power trading. O’Brien said Centrica Energy delivered £200 million of EBITDA in a “tough year,” and later guided that it is expected to be below its sustainable EBITDA range in 2026. He said RETO, its renewable route-to-market business, again performed well, with assets under management up 17% to over 19 GW. He also said the LNG portfolio has been “fundamentally transformed,” with the business 100% hedged until 2028 and over 80% hedged until 2030.
Infrastructure delivered £728 million of EBITDA, down due to asset sales, realized prices, and fourth-quarter outages, partly offset by a lower-than-expected loss at Rough.
Investment program and the pivot to contracted and regulated earnings
O’Shea and O’Brien reiterated a strategy of recycling capital from non-core assets and investing in assets intended to “grow and stabilize” the earnings profile. In 2025, O’Brien said Centrica more than doubled investment year-over-year, including almost £400 million at Sizewell C, £200 million at Grain LNG, and £225 million in its Meter Asset Provider (MAP) business, which he said was above target.
O’Shea highlighted Sizewell C, Grain LNG, and the MAP as “high-quality, long-duration, regulated, and contracted assets” that are intended to reshape Centrica. He said Centrica had earnings in 2025 relating to Sizewell C and expects those earnings to grow predictably over 15 years. He also said the MAP business installed over a million meters in 2025 and now has more than 1.6 million meters installed roughly two years after launch.
Management also noted execution challenges. O’Shea said commissioning of Irish peaker plants has been delayed to around the middle of 2026, citing grid connection delays and “missteps” as Centrica rebuilds its construction capability, though he said a capacity market contract modification has helped mitigate the value impact.
Transformation program: £100 million of net benefits and £500 million more targeted
O’Shea said the transformation program delivered £100 million of net benefits in 2025 and will ramp up in 2026, with a target to take an additional £500 million out of the cost base by the end of the decade. He emphasized that Centrica is not recording transformation costs as exceptional items, and said that if it did, 2025 EPS would have been roughly 2 pence higher.
O’Brien said Centrica’s operating cost base is just under £2 billion (including bad debt and depreciation) and framed cost efficiency as both an opportunity and a necessity, given inflation’s potential earnings impact. He said Centrica reduced OpEx by 3% in 2025 net of inflation and cost-to-achieve for benefits of over £100 million. He also outlined that the company has identified around half of its targeted end-of-decade savings and expects nominal costs to remain broadly flat by 2030 as efficiencies offset inflation and growth support costs.
O’Shea described technology, including AI, as a key enabler. He said Centrica aims to reduce customer contact by at least 30% and increase the share handled through enhanced digital channels by 40%, while using AI to support colleagues and free time for more complex customer issues.
Outlook and key assumptions discussed with analysts
For 2026, O’Brien guided to:
- Retail EBITDA within its stated range of £500 million to £800 million (after transformation spend)
- Optimization EBITDA improving somewhat from 2025 but remaining below the medium-term sustainable range at around £250 million
- Infrastructure EBITDA in a range of £500 million to £650 million, assuming the second Spirit Energy disposal completes around mid-year
He said Rough is assumed to be around breakeven in 2026, driven by optimizing indigenous gas sales and cost discipline. On investment, management reiterated expectations to invest at least £700 million in 2026.
O’Shea reaffirmed longer-term targets of £1.7 billion EBITDA by the end of 2028 and £2 billion by 2030, noting that both figures include the impact of expected—but not yet confirmed—extensions to the four existing advanced gas-cooled nuclear power stations into the early 2030s. In Q&A, O’Shea said the difference between £1.6 billion and £1.7 billion by 2028 reflects nuclear extensions, and he estimated that about 10% of the 2030 EBITDA target relates to having all four AGR stations operating through 2030.
Analysts also questioned assumptions behind the 2030 EPS ambition (discussed in the meeting as reaching about 22 pence). O’Brien said there is no assumption for additional buybacks in the share count used for modeling. He added that Centrica uses forward curves for commodity price assumptions and assumes zero for Rough given uncertainty. O’Brien also said the group’s effective tax rate is expected to decline structurally as the portfolio shifts away from higher-taxed Spirit Energy earnings, which management said amplifies EPS growth relative to EBITDA.
On LNG, O’Shea detailed steps taken to reduce risk in the long-standing Sabine Pass contract by entering arrangements with U.S. domestic gas producers to better match pricing indices, which he described as a “massive de-risking” of the portfolio. O’Brien also pointed to evolving credit metrics, saying S&P has begun giving the company more credit for its investments in regulated and contracted assets.
About Centrica (LON:CNA)
Centrica is energising a greener, fairer future for our colleagues, customers and communities. Our integrated business operates across the energy value chain, with over ten million Retail customers, leading brands such as British Gas and Bord Gáis Energy, and the UK’s largest energy services workforce. Our Infrastructure businesses bring gas and electricity to the market every day and provide more than half of the UK’s gas storage capacity, while our Optimisation business delivers world-class procurement and route-to-market capabilities to the Group and third parties, supporting energy security and our customers’ decarbonisation journeys.
