MARKET REPORT: Water shares undergo election name washout

Nearly one billion pounds were wiped off water firms’ value as investors braced for major political scrutiny ahead of the General Election.

Shares in Severn Trent, United Utilities and South West Water owner Pennon tumbled amid suggestions regulator Ofwat will delay its review of the sector until after polling day on July 4.

The scandal-hit industry is likely to come under fire and has been heavily criticised for paying out hundreds of millions of pounds in dividends despite anger over pollution. 

Pennon this week said it would pay £3.5million in compensation to customers in Devon who became sick after drinking parasite-contaminated water.

It also announced a £127million dividend for shareholders.

Election slump: Shares in Severn Trent, United Utilities and South West Water owner Pennon tumbled following Rishi Sunak’s election announcement 

It comes as privately-owned Thames Water fights for survival as it struggles under an £18billion debt pile. 

Severn Trent shares fell 5.2 per cent, or 136p, to 2503p while United Utilities was down 4.9 per cent, or 53p, to 1024p and Pennon shed 7.1 per cent, or 47p, to 618p. This wiped £900million off their value.

Energy companies were also hit with Drax facing a further delay in getting its carbon capture project approved by ministers.

It fell 8.6 per cent, or 47.5p, to 507.5p while Centrica was down 2.3 per cent, or 3.4p, to 143.9p. 

And National Grid piled on further misery by announcing a £7billion rights issue to fund £60billion of investments. 

The FTSE 100 edged down 0.4 per cent, or 31.10 points, to 8339.23 and the FTSE 250 dipped 0.4 per cent, or 78.77 points, to 20,631.30.

Stock Watch – Tate & Lyle

Ingredients maker Tate & Lyle outlined plans for a share buyback following the sale of its stake in a US business.

The sweeteners brand offloaded its remaining 49.7 per cent holding in Primient to the private equity firm KPS for about £279million.

The buyback came alongside full-year results that showed profits jumped 48 per cent to £226million in the 12 months to the end of March. 

Shares rose 5.2 per cent, or 35p, to 712p.

The Competition and Markets Authority watchdog is to probe the veterinary sector amid concern over soaring pet bills, after its initial review prompted 56,000 responses. 

AIM-listed firm CVS rose 2.5 per cent, or 26p, to 1062p as it said it will ‘continue to proactively support’ the investigation.

But investors in Pets at Home may have been spooked by its silence. The stock fell 2.3 per cent, or 6.6p, to 276.2p.

Wizz Air soared 10.5 per cent, or 206p, to 2168p after it flew a record number of passengers – 62m – in the year to the end of March, up 21.4 per cent on the year before.

Revenues jumped 30.2 per cent to £4.3billion while it swung back into a profit of £312million, having made a £456million loss a year earlier. 

Great Portland Estates – down 1.3 per cent, or 5.5p, to 417p – has swapped properties with the City of London, buying one leasehold for £28.6million, selling another for £18.23million, and outlined plans to raise around £350million, by issuing 152m new shares at 230p, to spend on assets and make more acquisitions.

London’s West End is ‘busy and vibrant’, said landlord Shaftesbury Capital, as sales rise. Its estate signed 147 leases worth £22.4million in the first five months of the year but shares dropped 2.2 per cent, or 3.1p, to 139p.

Chemicals group Johnson Matthey sank 1.2 per cent, or 21p, to 1786p after revenues fell 14 per cent to £12.8million in the year to the end of March while profits fell 39 per cent to £249million.

General insurance premiums at Aviva rose 16 per cent to £2.7billion in the first quarter – but was down 2.7 per cent, or 13.3p, to 482.9p.