Centrica cashes in as smaller rivals fail
British Gas owner Centrica’s shares heated up as it snapped up customers from smaller competitors crushed by soaring energy prices.
it was one of the top risers in the FtsE 250, up 4.6pc, or 2.34p, to 53.42p as it said it will take on former customers of People’s Energy, which collapsed last week. Centrica will have another 350,000 domestic customers and 500 business customers as part of the ‘supplier of last resort’ procedure introduced by energy regulator Ofgem in 2003.
smaller firms have come under immense pressure recently as wholesale energy prices rocketed amid shortages and disruption.
Four UK suppliers have gone bust over the last week and there are worries more could follow. the problem is so acute that Business secretary Kwasi Kwarteng met heads of the UK’s energy companies and Ofgem to draw up support measures for the sector.
One solution would be for the Government to offer state-backed loans for firms to take on customers from failing suppliers, with Kwarteng saying the first priority is to ‘protect consumers’.
however, movement among the listed firms indicated that the outlook for the sector was uncertain, with National Grid sliding 0.9pc, or 8.5p, to 957.6p while SSE inched up 0.4pc, or 7p, to 1641.5p and Drax, the owner of a biomass power station in Yorkshire, rose 3.2pc, or 15.2p, to 490.8p.
the FTSE 100 was down 0.9pc, or 59.73 points, at 6903.91, while the FTSE 250 slumped 1.1pc, or 257.22 points, to 23,401.72.
Markets slipped as investors continued to fret over the fate of Chinese property giant Evergrande, which is teetering on the brink of a debt default that some fear could hit the wider Chinese economy and potentially spark a global financial crisis.
One bright spot was the travel industry, where shares soared after the Us government said it will relax travel restrictions on fully vaccinated UK and EU travellers from November.
British Airways owner IAG climbed 11.2pc, or 16.68p, to 166.18p, making it the biggest riser in the FtsE 100. Budget carrier Easyjet rose 3.8pc, or 23.8p, to 654.2p and Wizz Air jumped 1.4pc, or 70p, to 5126p. rival Ryanair fell 1.2pc, or €0.21, to €16.68.
Package holiday outfit Tui also got a boost, rising 2.6pc, or 7.9p, to 310.6p. Fellow holiday firm On The Beach added 4.4pc, or 15.5p, to 365.5p and Jet2 bounced 3.7pc, or 44.5p, to 1264.5p.
Newsagent WH Smith, which has a large presence at airports and other travel hubs, was up 1.3pc, or 21.5p, to 1672.5p. SSP, the owner of the Upper Crust and Caffe ritazza, increased 5.9pc, or 15.7p, to 282.1p.
Rolls-Royce, a maker of aircraft jet engines, also ascended 4.2pc, or 4.7p, to 115.7p. At FtsE 250 butcher Cranswick boss Adam Couch warned a shortage of carbon dioxide caused by escalating energy costs could lead to a ‘major crisis’ in supply chains. he said shortages could ‘effectively bring production to a halt’ and that the industry is already at tipping point ahead of Christmas. shares dropped 3.7pc, or 138p, to 3608p.
On AiM, luxury handbag maker Mulberry bounced 9.3pc, or 25p, to 295p after unveiling a collaboration with irish fashion designer richard Malone.
Arecor Therapeutics surged 30.4pc, or 75p, to 322p after positive results from a clinical trial of an insulin treatment for diabetes.
Elsewhere, Haydale Graphene tumbled 18.2pc, or 1.4p, to 6.3p after raising £5.1m to fund the business. the oversubscribed fundraising priced the shares at 6p each, a 22pc discount to the company’s closing price last Friday.
Online booze retailer Naked Wines suffered a hangover after a downgrade from analysts at Liberum, falling by 10.8pc, or 89p, to 737p.