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Eaga shares plummet after Warm Front budget cut

Shares at energy services firm Eaga fell 24 per cent following the Comprehensive Spending Review yesterday which highlighted the reduced budget allocated to the Warm Front scheme.

The fall in share price wiped £66 million off the company’s value, leaving it valued at £210m.

Directors at the firm said: “Funding for the Warm Front programme for the 2010/2011 fiscal year is currently £345m and the statement today confirmed a budget of £110 million in 2011/2012 and £100 million in 2012/2013 which is materially lower than our expectations. Eaga will be discussing with DECC the operational arrangements for the Warm Front scheme for this period and will be considering the likely resultant impact on Eaga’s performance.”

Highlighting the positives from today’s CSR, the statement added: “The announcement also confirmed the Government’s ongoing commitment to the issue of climate change with specific commitments to the Green Deal and Renewable Heat Incentive programmes, together with a new obligation on the energy companies to provide greater help to the most vulnerable fuel poor households.”

“The statement also confirms that Feed In Tariffs for renewable generation will be refocused on the most cost-effective technologies, such changes will be implemented at the first scheduled review date unless higher than expected deployment requires an early review. These areas represent significant opportunities which Eaga is pursuing.”