- Martin Lewis, a consumer expert, said that UK energy consumers are expected to face an enormous hit this year, which may lead some households to make critical ‘eat or heat’ decisions.
- He called on the UK government to intervene to help avert an energy market crisis.
- The government is due to revisit its current energy price cap in February.
UK energy consumers are expected to face a big hit, which may lead some households to make ‘eat or heat’ decisions, according to UK’s consumer website Money Saving Expert’s founder, Martin Lewis.
Lewis added that 2022 is expected to be a very difficult year for people, anticipating that bills could rise by at least 50 per cent. This could prove to be unsustainable for many energy consumers. He, therefore, called on the government to intervene in order to avert a crisis in the sector.
It is worth mentioning here that several energy suppliers collapsed in 2021 owing to soaring energy prices.
A recent report by energy market research firm Cornwall Insights found that bills could rise by about 46 per cent to £1,865 per annum when the next price cap revision is released this year.
The government is expected to revise its energy price cap next month in February, which is expected to be passed on to consumer energy bills in April 2022.
Let us explore the investment prospects of 2 FTSE listed electricity stocks given this context:
- Centrica PLC (LON: CNA)
Centrica is a UK-based international energy services group. It belongs to the FTSE 250 index.
The company’s subsidiary British Gas took on the customers of the collapsed energy suppliers Neon Reef and Social Energy, under Ofgem’s supplier of last resort (SOLR) plan. Neon and Social went bust in November 2021.
Industry body Ofgem, set up the process in order to aid collapsed energy firms’ customers shift to other suppliers.
The company’s shares closed at GBX 71.50, up by 0.10 points or 0.14 per cent on 31 December 2021. The FTSE 250 index had ended at 23,480.81, lower by 58.79 points, or 0.25 per cent.
The company has given shareholders a return of 53.70 per cent in the past 1 year, as of 31 December. It has a market cap of £4,205.20 million as of date.
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- SSE PLC (LON: SSE)
SSE is a Scotland headquartered multinational energy company. Its adjusted operating profit, for the 6 months to September 2021, was higher by 15 per cent to £376.8 million, up from £328.9 million in the year before.
Its adjusted earnings per share during the period rose by 44 per cent to 10.5 pence, from 7.3 pence in the previous year.
Its shares closed at GBX 1,649.00, lower by 4.50 points, or 0.27 per cent down on 31 December 2021. The FTSE 100 index, which it is a part of, had ended at 7,384.54, down by 18.47 points, or lower by 0.25 per cent.
The company has given shareholders a return of 9.93 per cent in the past 1 year, as of 31 December. It has a market cap of £ 17,573.75 million as of date.