Centrica (CNA), the parent company of British Gas, entered 2025 with steady momentum despite a cooling energy market and ongoing normalization in wholesale prices. After years of restructuring, the company has emerged leaner, more diversified, and well-positioned to generate consistent cash flow from both its retail and infrastructure divisions.
Find out what a stock’s really worth in under 60 seconds with TIKR’s new Valuation Model (It’s free) >>>
The first half of 2025 showed resilience amid weaker commodity spreads, as the group balanced lower trading income with stronger retail performance and disciplined cost control. With £2.5 billion in net cash, a 22% dividend increase, and ongoing share buybacks, Centrica continues to execute on its goal of balancing shareholder returns with reinvestment in regulated, low-risk energy assets.
CEO Chris O’Shea reaffirmed Centrica’s commitment to “build a simpler, more efficient business,” focusing on energy security, digital customer growth, and targeted investments in nuclear and renewable infrastructure to deliver dependable cash returns over the decade.
Quickly value any stock with TIKR’s powerful new Valuation Model (It’s free!) >>>
Financial Story
Centrica reported H1 2025 adjusted EBITDA of £900 million, down from £1.44 billion in the prior year, reflecting a normalization of energy margins following two years of exceptional volatility. Adjusted operating profit declined to £511 million, while adjusted earnings per share fell to 7.0 pence, roughly half of the prior-year level. Revenue decreased by 10% to £11.9 billion, as milder weather conditions and lower energy consumption impacted trading and supply volumes.
| Metric | H1 2025 | H1 2024 | YoY Change |
|---|---|---|---|
| Adjusted Revenue | £11.9 bn | £13.3 bn | ↓ 10% |
| Adjusted EBITDA | £900 m | £1.44 bn | ↓ 37% |
| Adjusted Earnings Per Share | 7.0 p | 12.8 p | ↓ 45% |
| Free Cash Flow | £244 m | £816 m | ↓ 70% |
| Net Cash (Period End) | £2.5 bn | £2.9 bn (FY 2024) | — |
Despite the decline in profitability, the balance sheet remains strong. The company generated £244 million in free cash flow during the half, maintained £2.5 billion in net cash, and reaffirmed a £2 billion share buyback to be completed by year-end.
Centrica also raised its interim dividend to 1.83 pence, consistent with its long-term goal of doubling dividend cover by 2028. Management remains confident of achieving a £1.6 billion annualized EBITDA run rate by 2028, supported by ongoing efficiency gains, stable retail earnings, and targeted investment in long-duration infrastructure assets.
Look up Centrica’s full financial results & estimates (It’s free) >>>
Broader Market Context
After years of restructuring and regulatory pressure, Centrica has repositioned itself as a streamlined, cash-generating utility in a changing energy landscape. The company’s exposure to retail supply, energy storage, and nuclear power gives it a balanced mix of short-term stability and long-term optionality.
While energy markets have cooled from the post-pandemic highs, investors have begun rotating toward companies with predictable earnings, strong balance sheets, and clear capital allocation frameworks, qualities that now define Centrica’s profile. The group’s focus on renewables, efficiency, and shareholder discipline mirrors a broader shift among European utilities toward sustainable profitability over expansion at all costs.
1. Strength in Retail and Services Amid Energy Weakness
Centrica’s retail operations provided stability in the first half, offsetting a weaker performance in energy trading. British Gas Residential added 81,000 new customers, including 12,000 net organic gains, and management noted improved retention linked to the rollout of its Ignition digital platform. Profitability within Services & Solutions enhanced for the second straight year, aided by 4% revenue growth and disciplined cost control.
The company expects the division to remain within its £100–200 million sustainable profit range in 2025, targeting margin expansion through cross-selling and digital efficiency. This segment’s steady earnings profile provides a cushion against volatility in wholesale markets, reinforcing Centrica’s growing emphasis on customer-led profitability rather than commodity-driven gains.
2. Investing for Value and the Energy Transition
Centrica is executing a multi-year investment strategy to reposition the business around regulated, low-risk infrastructure. The company has now committed £2.5 billion of its £4 billion 2024–2028 capital program, targeting stable returns and inflation-linked growth.
Its flagship project, the £1.3 billion capped investment in the Sizewell C nuclear development, is projected to deliver a 12% internal rate of return, underpinned by inflation-protected earnings. Additional growth projects include the rollout of 1.5 million smart meters by year-end, strategic divestment of its Cygnus gas field stake to free up capital, and early-stage evaluation of nuclear plant life extensions across four UK sites. Together, these projects illustrate Centrica’s pivot from short-cycle trading to long-duration infrastructure assets with predictable cash yields.
Value stocks like Centrica in less than 60 seconds with TIKR (It’s free) >>>
3. Balance Sheet Strength and Shareholder Returns
Centrica’s strong financial position remains central to its investment case. With £2.5 billion in net cash, a BBB/Baa2 credit rating, and high liquidity, the company is well equipped to maintain shareholder distributions through cyclical downturns. Management continues to prioritize sustainable dividends and disciplined buybacks as key levers of total shareholder return.
The board expects dividends to grow steadily through 2028, supported by rising cash flows from regulated, low-risk investments. Meanwhile, the £2 billion buyback program, now 75% complete, signals management’s confidence in long-term value creation. As energy prices stabilize and UK demand trends normalize, Centrica’s mix of cash generation and capital flexibility positions it to remain one of the UK’s most defensive energy names.
The TIKR Takeaway
Centrica’s 2025 results reflect a company that has successfully transitioned from crisis recovery to steady, disciplined growth. Though headline earnings fell as energy markets normalized, retail stability, nuclear investment, and capital discipline reinforce its status as a dependable income stock with modest upside potential.
The key question for investors is whether management can sustain margin improvements and deliver on its £1.6 billion EBITDA target by 2028. With consistent progress on its transformation plan and continued shareholder-friendly capital allocation, Centrica looks set to remain a reliable compounder in the UK energy space.
Should You Buy, Sell, or Hold Centrica Stock in 2025?
At roughly £1.40 per share, Centrica trades around 8x forward earnings and offers a 4% dividend yield, supported by one of the strongest balance sheets among UK utilities. The combination of steady retail profits, regulated asset exposure, and buyback momentum makes it well worth considering for investors who are seeking stable cash returns and defensive exposure to the energy transition.
How Much Upside Does Centrica Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
See a stock’s true value in under 60 seconds (Free with TIKR) >>>
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
