MARKET REPORT: Centrica shares fall as energy prices cool

Shares in the British Gas owner fell almost 10% even as the London stock market recovered after a collapse in technology stocks on Wall Street.

Centrica fell 9.9%, or 14.2p, to 128.85p after first-half profits halved, although it still earned £1bn, following a 35% drop in revenue to £13.3bn.

The FTSE 100 company pointed to a “more normalised environment” after cashing in on rising energy prices in the wake of the invasion of Ukraine.

It came during a turbulent day globally following a brutal sell-off in US technology stocks in the previous session.

More than £500bn was wiped off the value of the ‘Magnificent Seven’ – Apple, Microsoft, Nvidia, Google owner Alphabet, Amazon, Facebook parent Meta and Tesla – on Wednesday, after disappointing updates from Tesla and Alphabet.

The turmoil sparked heavy selling in Europe early yesterday, with the FTSE 100 falling to 8,056, its lowest level since April. Interactive Investor’s Victoria Scholar said markets had “become extremely vulnerable to the fate of a small handful of tech giants”.

But Wall Street stabilised, with the Footsie up 0.40 per cent, or 32.66 points, at 8,186.35, while the FTSE 250 was down 0.32 per cent, or 66.49 points, at 20,884.35. Tobacco giant BAT warned that illegal single-use vaping products in the US were hurting its business, even as sales of its new range rose by £165m in the first half and gained 5.3 per cent, or 137p, to 2,713p.

Relx added 2.9%, or 101p, to 3,583p, after the data and analytics firm’s revenue rose 7% to £4.6bn in the first half on profits up 14% to £1.3bn.

In the telecoms sector, BT said its commercial division remained burdened by legacy contracts, while its consumer division faced increased competition.

Group revenue fell 2% to £5.1bn in the quarter to the end of June, while profit fell 3% to £520m. It rose 0.4%, or 0.55p, to 140.3p.

Strong growth in Turkey, South Africa and Egypt helped Vodafone’s revenue rise 2.8% to £7.6bn in the first quarter, lifting revenue by 2.4%, or 1.7p, to 72.14p.

Trading platform IG Group gained 4.9%, or 41.5p, to 886.5p after strong results in “slower market conditions”, with revenue down 3% to £987m in the year to the end of May. And CMC Markets rose 0.8%, or 2.5p, to 302p after it reiterated its full-year forecasts following a decent first quarter.

Kitchen supplier Howden Joinery said it will continue to face higher freight costs in 2024 and sank 3.8%, or 35.5p, to 912p.

De La Rue suffered further losses after the banknote printer revealed a “material uncertainty” over its financial future due to a loan repayment due next July. Shares fell 5.8%, or 5.9p, to 96.6p.

Everyman Media, up 4.7% (or 2.3p) to 51.5p, has welcomed more film-goers who have paid for higher tickets and spent more on food and drink. The company is optimistic, with releases such as Joker: Folie a Deux, Paddington in Peru and Gladiator II to come.