The parent company of British Gas, Centrica, has warned that the energy supplier’s profits will be impacted after a warmer-than-usual spring, as residential energy demand fell below expectations during the second quarter of 2025.
In an update to investors ahead of its annual general meeting on Thursday, Centrica stated that its residential energy arm, which includes British Gas, had been “impacted by warmer than normal weather” during the second quarter of the year. Despite the hit, Centrica reassured investors that the profits are still expected to remain within its previously set sustainable profit margin of between £150 million and £250 million.
Centrica’s shares, however, are under scrutiny as the company is dealing with the fallout from a series of challenges that include both the weather-related profit dip and issues surrounding its gas storage facilities. The warmer-than-expected spring has contributed to reduced household energy consumption, dampening profits from gas and electricity sales.
“We have seen a reduction in residential energy demand, as a result of warmer than usual spring temperatures,” Centrica said in its investor update. “However, we remain within the target range for sustainable profits, and we are closely monitoring the situation as we progress through the year.”
In addition to its residential energy segment, Centrica has been grappling with issues related to its Rough gas storage facility in the North Sea. The Rough site, the largest of its kind in the UK, is essential for providing storage capacity for natural gas during periods of high demand, particularly during cold spells. However, Centrica revealed it had stopped filling the site with natural gas last month due to concerns over its financial viability. This has further exacerbated the company’s financial challenges.
The energy giant typically begins injecting natural gas into the Rough storage site by the spring, but reports indicated that this did not occur by mid-April, prompting concerns about the future of the facility. Centrica has estimated that it is running at a loss of between £50 million and £100 million, further compounding the company’s financial pressures.
Centrica is currently in talks with government ministers, seeking additional financial support to upgrade and expand the Rough gas storage facility. The company has called for a regulatory support mechanism that would unlock up to £2 billion in investment to both increase Rough’s capacity and transform it into a hydrogen-ready storage facility.
While gas storage is not as integral to the UK’s energy system as it is in other countries, the Rough site still represents about half of the UK’s gas storage capacity. The site acts as an essential buffer for periods of high demand, particularly during extreme cold weather, when the country’s energy needs are at their peak.
Centrica also revealed that its energy trading arm, Centrica Energy, has faced a more difficult environment in the first part of 2025, due to “more challenging market conditions in the gas and power trading segment.” Market fluctuations and the uncertainty caused by global trade restrictions have added to the company’s struggles.
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Despite these challenges, Centrica remains optimistic about its financial resilience. The company stated, “We are closely monitoring the impact of potential global trade restrictions and will continue to do so. Given our diversified supply chains across key projects and operations, we do not currently anticipate any material impact on our business or financial results.”
Centrica’s update comes as the company continues to navigate the complex landscape of the energy market, balancing between rising global energy prices, weather-related demand fluctuations, and the need for continued investment in infrastructure and technology.
The company is also under pressure to demonstrate its ability to adapt to the energy transition, with a focus on sustainability and hydrogen as part of its long-term strategy. While Centrica has faced a difficult start to 2025, it remains committed to its plans for growth and energy security in the UK.
As Centrica works through these challenges, the coming months will be crucial in determining whether the company can maintain its profitability and secure the necessary support to modernise its infrastructure, including the Rough gas storage site, to meet future energy needs.
