Standard Digital Edition

Windfall tax reports take toll on power giants

Graeme Evans @EvansOnTheMoney

WINDFALL tax speculation hit the valuations of Britain’s biggest power firms today as investors unplugged from SSE, Drax and British Gas owner Centrica.

The heavy selling came as the Financial Times reported that Chancellor Rishi Sunak is working on a plan that will go beyond just targeting North Sea oil and gas producers.

The potential focus on £10 billion of excess profits made by power generators covers producers of renewables as they have also benefited from the surge in wholesale prices. Shares in FTSE 100-listed wind farm giant SSE tumbled 11% or 208p to 1708.5p, while North Yorkshire biomass firm Drax skidded 15% or 122p to 690p in the FTSE 250.

The pair were not helped by a note from Citi analysts removing the bank’s “buy” recommendation on SSE and switching Drax to “sell”. Other stocks sharply lower included Centrica, which dropped 8% or 7.14p to 82.46p and Greencoat UK Wind after a fall of 8.9p to 150.2p.

The FTSE 100 index retreated 57.74 points to 7455.70, with advertising-focused stocks under pressure after last night’s profits warning by Snapchat owner Snap.

Broadcaster ITV dropped 2.92p to 71.44p and heavyweight marketing business WPP slipped 31p to 934p.

The biggest rise of the blue-chip session came from Barclays after its green light for the £1 billion share buyback it put on hold at first quarter results. Shares lifted 3.8p to 161.5p.

The FTSE 250 index fell 134.77 points to 20,011.41, despite a rise of 11% for Upper Crust travel food firm SPP after half-year results showed continued progress in its Covid recovery.

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