Energy giants rise after investors look for safety
As the weather turned colder, shares in utilities providers heated up. Reports of the first energy supplier to go out of business in a decade sent investors scrambling for shares in the safer industry giants.
Low-cost energy firm GB energy shut down at the weekend, leaving 160,000 customers out in the cold. Rising wholesale prices, which made Preston-based GB’s ultra- cheap pricing unsustainable, were blamed for the collapse of the firm.
some experts have predicted it will be the first in a long line of smaller providers, which struggle to keep up as the oil price rises and the pound weakens.
Centrica climbed 2.6pc, or 5.3p, to 209.4p and SSE surged 2.1pc, or 31p, to 1495p.
Russ Mould, investment director at AJ Bell, said: ‘GB energy going bust over the weekend may have convinced some investors that there is value in the scale and stability of the big six suppliers. Utility stocks are also an obvious choice for any income investors, who are spooked that the ten-year gilt yield has fallen back below 1.4pc.’
the Ftse 100 closed down 0.6pc, or 41.28 points, at 6799.47. Rand-
gold Resources leapt 4.3pc, or 245p to 5965p as one broker upped its target price for the stock.
Property companies got a day off from being pummelled yesterday, and Grainger announced the acquisition of a £46m housing development in Bristol.
the residential landlord group has bought the build-to-rent site – where the Government helps to finance a development – with planning consent for 194 homes. It is expected to be completed at the beginning of 2019.
Grainger estimates the development will generate a yield of around 7pc when let. It said the city is a key target because of its strong housing market and growth potential. shares inched up 1.1pc, or 2.5p, to 223p. Cerillion climbed as it reported its first full-year results since listing on Aim in March.
the business, which provides billing software to companies, said revenue rose 6pc to £14.8m in the 12 months to september 30, and adjusted pre-tax profit was up 4pc to £ 2.3m. Cerillion said it had secured a follow-on contract with an existing telecoms provider worth £2.26m.
shareholders are set for a maiden final dividend of 2.6p, taking the total payout to 3.9p a share. shares gained 0.8pc, or 1p, to 127p.
Big data firm Trakm8 plunged as it revealed pre-tax profit had plummeted by 77pc in the first half of the year. the company, which sells telematics devices and services such as black boxes used by car insurers, said operating profit was £282,000 in the six months to september 30, compared with £1.2m a year ago.
trakm8 said the number of orders received was up 24pc over the period, but profit had been affected by a significant increase in sales, marketing and resource spending. Net debt almost doubled from £2.23m to £4.4m. But the firm said new technologies were now being tested by major customers and it had secured new contracts and extensions with clients including scottish Power, shell and Allianz.
executive chairman John Watkins said that the outcome for the full year depended on currency exchange rates and timing of contracts. shares tumbled 31.6pc, or 58.5p to 126.5p.
A deal with Dr Martens kicked shares in Market Tech higher. the real estate company has signed two leases with the iconic footwear brand for 23,000 sq ft of office space in Camden.
Market tech owns retail, leisure and office space around the area in north London and is developing a 16-acre site, which includes living space. Yesterday it revealed that Dr Martens would be moving in on a ten-year lease with a new store and head office. shares advanced 0.7pc, or 1p, to 138.5p.
Russian miner Petropavlovsk said flooding and unseasonably low temperatures – as low as -40C – had brought production at one of its mines to a halt on health and safety considerations. shares slipped 4.8pc, or 0.34p, to 6.69p.