MARKET REPORT
BRITISH Gas-owner Centrica has lost £1.6bn of its market value and seen shares plunge to a 14-year low after the energy giant shed 823,000 household energy accounts and warned over profits.
Shares in the energy giant closed down more than 15%, or 25.3p to 138p, as investors digested the impact of a customer exodus, warmer-thannormal weather in October, and woes in its North American arm.
The sharp drop dragged on the wider market, with the FTSE 100 Index finishing down 1.78 to 7,417.24.
The move by British Gas to hike electricity prices by 12.5% in September contributed to the loss of customers between the end of June and end of October.
British Gas - Britain’s biggest energy supplier - now has 13.1 million customer accounts and 7.9 million customers.
George Salmon, Equity Analyst at Hargreaves Lansdown, said: “After a dilutive share placing last year, and considering the challenges in the retail business, investor confidence in the Centrica turnaround story was already fairly brittle. That meant the group could illafford having to break more bad news, but unfortunately, that’s exactly what it’s done. The real kick in the teeth is that few anticipated the source of the latest trouble.”
Across Europe, Germany’s Dax edged lower and the Cac 40 in France rose by 0.5%.
On the currency markets, the pound was down 0.1% versus the US dollar at 1.33, as profit taking and the latest slew of official economic data weighed on the UK currency.
Turning to UK stocks, All Bar One owner Mitchells & Butlers saw its shares plunge after warning that it could scrap its next shareholder dividend payout on the back of lower profits.
The pub group was down more than 6% on the second tier - 17p lower at 241p - after reporting a fall in pre-tax profits to £77m for the year to September 30, compared to £94m the previous year.
It comes as the company works to offset a spike in buying costs on the back of the Brexit-hit pound, saying it expects those pressures to continue into the next financial year.
The biggest risers on the FTSE 100 Index were Mediclinic International up 16.5p to 525p, Sage Group up 24p to 806p, ITV up 3.6p to 152.4p, Berkeley Group up 73p to 3,3730p.
The biggest fallers were Centrica down 25.3p to 138p, Babcock International down 23p to 682.5p, National Grid down 25.2p to 866.1p, Johnson Matthey down 73p to 3,068p.