FTSE brushes off significant Centrica woes

Market report Emma Newlands

London’s top-flight index closed flat despite British Gas owner Centrica suffering its biggest-ever one-day shares crash.

It came after the firm lost 823,000 household energy accounts in four months and warned over full-year earnings. The firm, which also owns Scottish Gas, saw shares cool by more than 17 per cent at one stage after it revealed the customer exodus and said results would also be hit by woes in its North American arm and recent warmer-than-usual weather.

It closed down 15.5 per cent at 138p, with its biggest-ever intra-day shares fall and took the stock down to levels not seen for 14 years.

Market analyst David Madden at CMC Markets warned Centrica’s record share-price crash may not be the end of its stock-market troubles.

He said: “The share price has been in decline since July 2013 and it has now fallen to a level not seen since 2003. If the bearish sentiment continues the stock could target 125p.”

He also said stock markets in Europe were experiencing low volatility as the US market was closed for Thanksgiving. “Investors in this part of the world are content to have a quiet day,” he said. The FTSE 100 closed down 1.78 points at 7,417.24.

In other UK stocks, Cineworld closed down 17p to 652p despite blockbusters Dunkirk and Despicable Me 3 boosting its revenues as the multiplex chain launched a string of new sites.

Total revenues rose 10.6 per cent for the 48 weeks ending 19 November. Peel Hunt analyst Douglas Jack said: “We believe that the payback on the investment programme will cushion the bottom line from any macro weakness.” The wine warehouse chain topped up its share price as it swung to profit for the six months to 2 October amid a boost in customer numbers. The retailer suffered after warning over a “softening” UK market and reporting widening halfyear losses that hit £16.8 million.