FTSE 250 movers: Ithaca slips on guidance cuts

(Sharecast News) - FTSE 250: 18,890.26, +1.38% at 1409 GMT. North Sea oil and gas producer Ithaca Energy on Thursday lowered annual production and capital expenditure guidance, citing the UK government's windfall tax, operational delays and lower volumes despite almost trebling profits in 2022.

Full year 2023 production guidance was revised to 68-74k barrels of oil equivalent a day (boe/d) from 72-80k boe/d, reflecting lower first quarter volumes, non-operated portfolio delivery and the impact of the government's Energy Profit Levy (EPL) to capital programmes.

The company, which listed on the FTSE 250 index last year, said full-year pre-tax profit surged to $2.24bn from $763m. It booked deferred tax charges of $766.5m under the EPL.

Ithaca generated free cash flow of $1.34bn against $550.5m, but now says net producing asset capex guidance will be cut to $400-$460m from $450-$550m.

The government introduced a windfall tax on soaring energy company profits as hard-pressed households struggled to pay fuel bills amid the cost-of-living crisis, caused by spiralling inflation and Russia's unprovoked war on Ukraine.

"The UK oil and gas industry experienced significant fiscal instability with the introduction and subsequent revision of the Energy Profit Levy in 2022," the company said.

"In its revised form, the Energy Profit Levy, and the fiscal uncertainty it has created, brings material and negative unintended consequences for financing capacity, joint venture JV partner alignment, and the free cash flow generation required to support continued investment. We continue to look towards the UK government to create an economic environment that encourages investment in the UK North Sea."

Warehouse Reit has sold two distribution estates for nearly £30m, the property investor said on Thursday.

Updating on trading, the FTSE 250 firm - a specialist in urban and "last-mile" industrial warehouse assets - said it had sold 12 Exeter Way in Theale and Temple House in Harlow for a combined £29.5m.

Along with other previously announced deals, the sales take total second-half disposals to £54.7m.

Warehouse Reit said the disposals were in line with its strategy to capture the inbuilt reversion across its portfolio, with proceeds used to pay down overall levels of debt.

The firm also said that the portfolio occupancy stood at 95.9% as at 28 February, up from 92.7% as at 7 November 2022, after it agreed a 10-year lease on Midpoint 18 in Cheshire.

Paul Makin, investor director of Tilstone Partners, Warehouse Reit's investment advisor, said: "We continue to make strong progress on delivering the company's strategy to minimise vacancy, capture the portfolio's inbuilt reversion and reduce debt.

"Occupationally, the UK logistics market remains robust, evidenced by the progress on increasing occupation across the portfolio."

Drax insisted on Thursday that it still plans to install carbon capture technology at its power plants even after the government rejected its plans to introduce the technology at a power plant in England.

The Department for Energy Security & Net Zero said earlier that Drax had failed to get 'Track-1' status for its biomass project with carbon capture and storage (BECCS).

Drax had said that it was prepared to invest £2bn to fit the technology to some of the units at its Yorkshire plant.

But Drax put out a statement noting that its power station BECCS project had passed the deliverability assessment for the Power BECCS project submission process.

Drax said it has been invited to enter formal bilateral discussions with the government immediately, to move the project forward.

The government is committed to achieving 5Mtpa of engineered Greenhouse Gas Removals (GGRs) by 2030 and Drax said that its power station is the only project that can enable the government to achieve this goal.

Chief executive Will Gardiner said: "Delivery of BECCS at Drax Power Station will help the UK achieve its net zero targets, create thousands of jobs across the north and help ensure the UK's long-term energy security.

"We note confirmation that our project has met the Government's deliverability criteria and Government remains committed to achieve 5Mtpa of engineered Greenhouse Gas Removals by 2030 - a goal that cannot be achieved without BECCS at Drax Power Station. We will immediately enter into formal discussions with Government to take our project forward.

"With the right engagement from Government and swift decision making, Drax stands ready to progress our £2bn investment programme and deliver this critical project for the UK by 2030."

At 1120 BST, Drax shares were down 0.9% at 569.50p, having tumbled earlier in the aftermath of the government's announcement.

Moneysupermarket fell as the price comparison website traded without entitlement to a dividend.

FTSE 250 - Risers

TUI AG Reg Shs (DI) (TUI) 663.60p 21.35% ASOS (ASC) 805.00p 8.20% Hammerson (HMSO) 24.19p 6.10% Essentra (ESNT) 198.00p 5.88% IWG (IWG) 161.50p 5.83% Warehouse Reit (WHR) 97.60p 5.06% Carnival (CCL) 735.60p 5.00% Wizz Air Holdings (WIZZ) 2,870.00p 4.97% Drax Group (DRX) 603.00p 4.96% Tullow Oil (TLW) 30.62p 4.51%

FTSE 250 - Fallers

Ithaca Energy (ITH) 148.95p -3.65% Moneysupermarket.com Group (MONY) 249.00p -2.66% Man Group (EMG) 242.40p -1.82% Tate & Lyle (TATE) 778.00p -1.74% Digital 9 Infrastructure NPV (DGI9) 65.00p -1.37% Trainline (TRN) 255.90p -1.31% Primary Health Properties (PHP) 101.50p -1.07% NB Private Equity Partners Ltd. (NBPE) 1,400.00p -1.06% Senior (SNR) 157.40p -1.01% Supermarket Income Reit (SUPR) 85.60p -0.93%