Centrica drops 10pc as it asks investors for £700m

SHARES in Centrica had a power cut yesterday after it revealed plans to raise funds equivalent to 7pc of its current issued share capital.

The Scottish Gas owner is planning to place 350m new shares on the stock market, worth more than £700m.

The utilities firm says it will use the money it raises to lower its debt and accelerate a strategy which involves making two acquisitions worth a total of around £350m. In a trading update the group said it was on track to deliver £200m of cost savings and reduce its headcount by 3,000 this year.

The announcement sparked the biggest fall in the company’s share price in more than a year. It tumbled 9.8pc, or 22.6p, to 208.5p.

Despite announcing an interim dividend of 4.8p, Sage Group’s shares were not adding up. The accountancy software provider reported double-digit revenue growth in the six months to the end of March, with subscriptions up 50pc.

But underlying earnings per share slipped 1.5pc. The firm also revealed it was set to acquire 20.7pc of cloud software developer Fairsail for £10m. Sage said it was confident it would achieve its fullyear targets, but investors were divided, and subtracted 3.6pc, or 22p, from the shares, which finished the day at 582p.

Also among the biggest fallers on the FTSE 100 (up 0.09pc, or 5.23 points, to 6117.25) was medical giant Smith & Nephew.

The firm reported strong revenue growth in its joint repair division, as well as in knee and hip implants.

But its emerging markets business fell back 6pc as a slowdown in China and the Gulf weighed heavy. The group reported slightly worse than expected revenue of around £780m in the first quarter, but said it was confident of good revenue growth in the rest of the year. Shares slipped 2.7pc, or 32p, to 1132p as investors looked for an alternative remedy.

Greggs shares were baking hot yesterday after heavyweight broker Investec put its seal of approval on the business. The High Street bakery has spent the past couple of years moving towards the food-onthe-go market.

It recently revealed a new range of l ow- calorie l unch options. Investec increased its rating on the stock to a buy, with a target price of 1250p. The positive review led the shares to their biggest one-day jump in months, as they rose 4.4pc, or 46p, to 1094p.

Derwent said it had seen little evidence of a slowdown in the property market, despite fears about what the stamp duty surcharge might mean for the rental sector.

So far this year the investment trust, which manages a portfolio of middle-market rental properties across London, has let or pre-let some 185,400 sq ft of space, generating £13.2m of annual rental income.

Derwent said its vacancy rate was only 1.2pc with demand remaining strong. But investors may need more reassurance to shrug off fears of a forthcoming slowdown for the sector. Derwent’s shares moved back 0.2pc, or 5p, to 3291p.

Challenger bank Shawbrook was surprisingly downbeat as it reported that underlying profit had increased by 29pc to £22.3m in the first quarter of the year.

The bank said political, economic and interest rate uncertainties might present some challenges to the business. Loan advances to customers had increased by 6pc to £3.57bn in the three months to March 31, while the bank also reported strong growth in its Isa and easy access savings accounts.

But its gloomy outlook spooked investors. Shares fell 4.4pc, or 12.8p, to 279.2p. As predicted, Premier Veterinary

Group yesterday revealed plans to expand into the US. Shares clawed up 10.1pc, or 12.3p, to 134p as the firm announced it would begin rolling out its healthcare programme in Georgia and North Carolina.

There are around 70m pet dogs and 74m pet cats in the US and the largest competitor in the country is reported to have around 1m pets signed up to its services.