Eaga shares climb

Mar 20 2008 by Andrew Mernin, The Journal

ENERGY efficiency group eaga saw its shares climb seven points to 183p yesterday despite a reduce rating from analysts Landbanki.

Landbanki said declining funding to eaga’s government- backed residential energy efficiency programmes – designed to eliminate ‘fuel poverty’ in all households by 2016 – would lead to pressure on profits in 2010.

Analyst Ian Jermin said fuel poverty contracts, which make up around 50% of eaga’s earnings, are falling in terms of annual funding and will only last until 2012 at the latest.

According to the analysts, eaga’s EBITA (earnings before interest, tax and amortization expenses) will slow to around 6% by 2010, reflecting lower activity in fuel poverty.

Mr Jermin, who has a price target of 160p, added that eaga’s other projects “are likely to be smaller in both size and scope and unable to protect earnings growth fully.”

An eaga spokesperson dismissed the note as “only one person’s opinion”.