FTSE keeps rising, Centrica posts record profit, Moneysupermarket disappoints with energy switching guidance and Home REIT goes from bad to worse

“Having finally smashed through the 8,000 level on Wednesday, the FTSE 100 shows no signs that its batteries are running out of juice, rising another 0.4% to 8,032,” says Russ Mould, Investment Director at AJ Bell.

“For an index that’s been unloved for years, it’s refreshing to see the FTSE find its rhythm as this could help it win back some of the investors who turned their backs in 2016 when the Brexit vote was cast.

“Helping to drive the index on Thursday was Relx, up 3.2% after its full-year results were well received. Despite being one of the UK market’s biggest companies, Relx tends to stay out of the spotlight and is often underappreciated by investors. In a nutshell it provides information to people working in industries such as legal and insurance to help them do their job in a better way.”

Centrica

“Recently caught up in a scandal where bailiffs were breaking into people’s homes to fit pre-payment meters, today’s results from Centrica will do nothing to dial down the heat on the company. Talk of more aggressive windfall taxes seems inevitable.

“Investors in the company might argue after years of disappointing returns they are due some bumper rewards. However, the fact a big driver of Centrica’s soaring earnings and cash flow is the energy crisis resulting from the war in Ukraine will sit uncomfortably with many struggling to heat their homes.

“It is fair to acknowledge that most of the company’s record profit came not from its retail-facing British Gas business but from its energy trading division as well as its oil and gas and nuclear assets, but casual observers are unlikely to make the distinction.

“Whether fair or not the argument will be made the company is taking money out of the pockets of billpayers and doling it out to shareholders.

“Given British Gas is the UK’s largest energy supplier, the company also faces significant risks associated with customers being unable to pay their bills.

“Centrica has demonstrated it can perform well when conditions are heavily weighted in its favour. To really win the market over it needs to do the same when it is not getting such a big external boost.”

Moneysupermarket

“Moneysupermarket served up many right answers with its latest numbers but the market has given it a D-minus after picking holes in the results. Revenue and profit are both up by double-digits and net debt has come down a lot. That’s simply not enough to get a winning grade judging by the 7% dive in the share price.

“There have been some suggestions in recent days that energy switching activity could restart from July. Moneysupermarket has poured cold water over that thought by saying it is unlikely that energy switching will return this year, and that’s likely to have spooked investors hoping for a big part of its business to start earning again.

“The other negative is the lack of dividend growth which suggests Moneysupermarket is being cautious until all parts of its business are firing on all cylinders again.”

Home REIT

“Home REIT continues to unravel with its brokers quitting, barely any rent collected from tenants over the past two months and demands for up to £20 million of refurbishments.

“It’s astonishing how so much has gone wrong in such little time, and it’s no surprise to see the board of directors indicate that the company might be put up for sale.

“Shareholders have been served the driest of turkeys and there is now a risk they may only get back pennies in the pound on their original investment given the multitude of problems.”

These articles are for information purposes only and are not a personal recommendation or advice.