Drax powers up on National Grid deal

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Trading screens were lit up by Drax as buyers flocked to the power firm in search of stocks not glowing red.

The FTSE 250 company said it expects profits for this year to be near the top end of analyst forecasts after a contract win with National Grid.

Drax, which owns the power station of the same name in North Yorkshire, said it agreed terms with National Grid for “certain ancillary services” starting this month for the next year, but did not elaborate on the deal. The most optimistic number-crunchers in the Square Mile were expecting it to book an annual profit of £161 million.

Chief executive Dorothy Thompson said: “At a time when many power stations are closing, this contract recognises the supportive role Drax continues to play in providing secure and dependable electricity to the UK.”

The shares fired up 3.6p to 275.7p, making it one of the safer bets on the mid-cap index which reflected the hesitant mood ahead of the keenly-awaited US jobs report for March — an important health-check for the world’s largest economy.

After the roller-coaster first three months of this year which left investors feeling nauseous, the FTSE 100 started the second quarter down 63.19 points or 1% at 6111.71.

Concerns are mounting that the luxury property bubble in the capital is about to burst and Berkeley Group, off 14% this year, has fallen victim to hedge funds hoping to profit from a possible “pop”. Short-sellers continued to circle the company, with Marshall Wace increasing its bet against the shares this week. The London-based fund manager is now borrowing 0.91% of stock — in effect a £40 million wager that the stock, down another 25p at 3193p today, will keep falling.

Shares in car dealer Inchcape, down 23p to 700.5p, went into reverse as Berenberg suggested the VW emissions scandal is denting sales in the UK.

The broker warned that sales of Volkswagen cars, which fill a fifth of Inchcape’s outlets on these shores, are down 13.5% so far this year.

Dublin-based banana firm Fyffes, listed on the junior market, branched out into mushrooms with a £78 million deal for Highline Produce, Canada’s biggest mushroom business. Fyffes’ shares were 3.45p sweeter at 113.2p.

AIM’s “get-rich-quick” addicts were left ruing their faith in Ascent Resources. The European gas minnow, which had made punters seven times their money last week after Cadogan Petroleum revealed its takeover interest, crashed 4.09p or 69% today to 1.88p as its suitor walked away from a deal.

Source Article from http://www.standard.co.uk/business/business-news/drax-powers-up-on-national-grid-deal-a3216051.html

April 2, 2016 |
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