MARKET REPORT: British Gas owner Centrica snaps up new customers as smaller rivals are crushed by soaring energy prices

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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 4.6 per cent, 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.

© Provided by This Is Money New trade: British Gas owner Centrica was one of the FTSE 250’s top risers, up 4.6 per cent as it said it will be taking on former customers of People’s Energy, which collapsed last week

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’.

Stock Watch – Igas Energy 

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Shares in minnow Igas Energy rocketed yesterday after the company announced a tie-up with Scottish energy firm SSE.

Igas said that under the deal it will work with SSE to develop a geothermal heating network in Stoke-on-Trent over the next 12 months.

Geothermal energy is when heat from the Earth’s crust is used to power electricity generators, usually by pumping hot water and steam out of the ground, which is then used to drive turbines.

Igas shares surged 51.6 per cent, or 9.8p, to 28.8p on the back of the news.  

However, movement among the listed firms indicated that the outlook for the sector was uncertain, with National Grid sliding 0.9 per cent, or 8.5p, to 957.6p while SSE inched up 0.4 per cent, or 7p, to 1641.5p and Drax, the owner of a biomass power station in Yorkshire, rose 3.2 per cent, or 15.2p, to 490.8p.

The FTSE 100 was down 0.9 per cent, or 59.73 points, at 6903.91, while the FTSE 250 slumped 1.1 per cent, 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 11.2 per cent, or 16.68p, to 166.18p, making it the biggest riser in the FTSE 100. Budget carrier Easyjet rose 3.8 per cent, or 23.8p, to 654.2p and Wizz Air jumped 1.4 per cent, or 70p, to 5126p. Rival Ryanair fell 1.2 per cent, or €0.21, to €16.68.

Package holiday outfit Tui also got a boost, rising 2.6 per cent, or 7.9p, to 310.6p. Fellow holiday firm On The Beach added 4.4 per cent, or 15.5p, to 365.5p and Jet2 bounced 3.7 per cent, or 44.5p, to 1264.5p.

Newsagent WH Smith, which has a large presence at airports and other travel hubs, was up 1.3 per cent, or 21.5p, to 1672.5p. SSP, the owner of the Upper Crust and Caffe Ritazza, increased 5.9 per cent, or 15.7p, to 282.1p.

Rolls-Royce, a maker of aircraft jet engines, also ascended 4.2 per cent, 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 3.7 per cent, or 138p, to 3608p.

On AIM, luxury handbag maker Mulberry bounced 9.3 per cent, or 25p, to 295p after unveiling a collaboration with Irish fashion designer Richard Malone.

Arecor Therapeutics surged 30.4 per cent, or 75p, to 322p after positive results from a clinical trial of an insulin treatment for diabetes.

Elsewhere, Haydale Graphene tumbled 18.2 per cent, or 1.4p, to 6.3p after raising £5.1million to fund the business. The oversubscribed fundraising priced the shares at 6p each, a 22 per cent 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 10.8 per cent, or 89p, to 737p.

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