MARKET REPORT: Booming energy prices lift shares in Serica Energy

Serica Energy became the newest stock in the North Sea to benefit from soaring natural gas prices after a sharp increase in profits.

The AIM-listed company reported profits of £194 million for the first six months of the year, up from £2.2 million for the same period in 2021 as production rose to an average of 26,600 barrels of oil equivalent (boe) per year. day of 18,855 last year.

The figure represented 5 percent of all gas produced in the UK during the period. While natural gas prices were “highly volatile”, Serica pointed out that the average price per therm had risen to 175p, more than three times the average of 50p a year ago, triggering a profit spike.

But the company took a more gloomy tone in its outlook, narrowing its production forecast for 2022 to 26,000-28,000 boo per day, from 26,000-30,000 earlier.

It also predicted that the windfall tax on energy companies, introduced earlier this year by then-chancellor Rishi Sunak, could have a “significant impact” on performance.

Serica shares rose 3.8 percent, or 13p, to 355p after the results. Oil and gas companies have seen profits soar after Russia’s invasion of Ukraine disrupted energy supplies.

But the amounts have sparked outrage among politicians, who have accused the sector of profiting, while households struggle with rising bills.

Gas prices showed no signs of slowing down amid reports of leaks in Russia’s Nord Stream 1 and 2 pipelines, which officials in Denmark and Germany suspected could be the result of sabotage.

Natural gas prices rose by more than 10 percent after the news.

However, the SSE fell 7.3 percent, or 122p, to 1549p after warning that renewable energy production in the year to September 22 had fallen 13 percent below expectations.

The company blamed adverse weather conditions, but added that its gas storage sites and thermal power plants had performed well.

Stock Watch – TinyBuild

Computer game maker TinyBuild jumped after it reported half-year results above expectations.

The company posted a profit of £6.3m for the first six months of 2022, up from £633,723 a year ago, while turnover rose from £17.3m to £26.6m.

Boss Alex Nichiporchik said this had happened despite “unprecedented challenges” such as withdrawing personnel from Russia and Ukraine during the war. It was on track for future results in line with projections.

Shares were up 5.4 percent, or 5.75p, to 112p.

The FTSE 100 fell 0.52 percent or 36.36 points to 6984.59, while the FTSE 250 fell 2.36 percent or 418.72 points to 17,304.11.

Markets had calmed down slightly after feverish trading in the wake of Kwasi Kwarteng’s mini-Budget last week.

But while sterling stabilized somewhat, concerns about the health of the UK economy continued to weigh on sentiment.

Real estate companies were once again on the brink of fear that rising interest rates will lead to more expensive mortgages, slowing down demand for housing.

Homebuilder Taylor Wimpey fell 7.2 percent, or 6.92p, to 88.92p, while rival Barratt fell 6.5 percent, or 24.9p, to 360.3p. Real estate listing sites also fell, with Rightmove dropping 8.9 percent or 48.6 pence to 500.6 pence.

But one firm on the rise was lender Virgin Money, which gained 0.3 percent or 0.35 pence to 132.65 pence after halting some mortgage deals.

Miners supported the FTSE 100 amid higher metal prices. Rio Tinto rose 1.8 percent or 83.5 pence to 4781.5 pence, while Antofagasta gained 2.3 percent or 24 pence to 1074 pence. Glencore rose 3.3 percent or 14.95p to 471.4p and Anglo American rose 1.6 percent or 41.5p to 2642.5p.

Water supplier United Utilities fell 5.7 percent, or 53.4 pence, to 888.8 pence after cutting guidance amid rising costs.

The FTSE 100 group forecast revenues for the six months to the end of March next year would be 1pc lower than last year due to ‘moderately lower than forecast’ consumption levels.

Shares in National Grid fell 4 percent, or 40p, to 948.2p after regulators opened an investigation into the planned sale of 60 percent of the group’s gas transmission and metering business to Australian investment bank Macquarie.

The Competition and Markets Authority will investigate whether the deal will lead to a ‘substantial reduction in competition’ in the UK and has until November 22 to make a decision.