Drax boosted by UK energy emergency
Drax Group jumped to the top of the FTSE250 risers as a surge in UK energy prices continued to roil markets.
Shares in the firm, which runs the Drax power station near Selby in Yorkshire, soared 8.8pc, or 38.4p, to 477p after a combination of pressures caused gas prices across Europe to hit record highs earlier this week.
Strong global demand for energy as well as low gas stocks in Western Europe and maintenance outages in producer nations such as Russia have also contributed to the rising cost of energy, with the onset of winter likely to escalate matters.
The crisis is already starting to hit the UK’s energy sector, with two smaller providers, Utility Point and People’s Energy, going bust earlier this week.
In desperation, the UK has been forced to return to older methods to keep the lights on, with coal plants across Britain being asked to make up the shortfall.
However, the cocktail of woes for the energy markets has proven to be a boon for Drax, with analysts at Barclays hiking their target price for the firm to 960p from 550p, saying the group had ‘significant share price upside potential’.
The FTSE 100 climbed 0.2pc, or 10.99 points, to 7027.48 while the mid-cap FTSE 250 jumped 0.9pc, or 200.03 points to 23632.84.
Falling commodity prices and concerns over the Chinese economy were weighing on mining stocks, with rio Tinto down 4pc, or 209p, at 5010p while anglo american slipped 4.6pc, or 135p, to 2818.5p, Fresnillo dropped 3.7pc, or 31.6p, to 816.4p, Glencore fell 2.2pc, or 7.4p, to 333p and antofagasta dipped 2.2pc, or 32.5p, to 1433.5p.
A takeover tussle is in the works as Ecotricity, a green energy firm run by Forest Green Rovers football club chairman Dale Vince, increased its offer for AIM-listed rival Good Energy to 440p per share, up from 340p previously, valuing the group at nearly £70m.
The increased bid came after Good Energy called on investors to reject the hostile approach, saying Ecotricity was ‘an unfit owner’ for the firm and that its plan for the business was ‘unsuitable’. Good Energy shares surged 17.9pc, or 59p, to 388p.
FTSE 250 fund manager JTC climbed 1.5pc, or 12p, to 798p after snapping up Missouri-based Segue Partners in a cash and shares deal. The group said the purchase will expand its presence in the US, an ‘important growth market for fund services’.
Law firm Keystone was up 10pc, or 76p, to 838p after posting a 118pc surge in profits to £4.3m the six months to the end of July.
The group said activity levels had been ‘very high’ across all of its practice areas.
DIY retailer Wickes was up 2.1pc, or 4.8p, at 237.2p after its profits more than trebled in the first half of 2021 as demand for home improvements surged during the pandemic.
For the six months to June 26, the FTSE 250 firm reported a profit of £46.5m, jumping from £14.5m in the same period last year. Revenues, meanwhile, rose by a third to £812m.
Mid-cap investment firm apax Global alpha received a lift after one of its portfolio firms, tech consultancy Thoughtworks, made a successful debut on the Nasdaq on Wednesday. Shares climbed 3.2pc, or 7p, to 224p.
C&C Group, the maker of Magners cider, floated up 2.7pc, or 6p, to 232p as the company cheered a ‘strong return to trading’ in the six months to the end of August.
The firm also said Ralph Findlay, boss of pub group Marston’s, will take over as chairman from next July.
Warhammer figurine maker Games Workshop was down 0.1pc, or 10p, to 11590p after the firm warned of pressure on freight costs and currency exchange rates in a trading update, although sales were continuing to grow.