Dabbler21 Oct 2010 15:46
The information is from an article on lse.co.uk
'Eaga shares are tanking because of the phasing out of the Warm Front scheme, because the uncertainty over what will replace it gives little reason for investors to buy the share,' says Henry Carver at KBC Peel Hunt.
'However, although it accounts for 50 percent of Eaga's revenues, margins are only 2 percent, so it generates less than 20 percent of profit, and the company should benefit from the drive towards energy efficiency generally,' he adds.
Clearly as it's a government scheme aimed at helping fuel poverty it was never meant to be massively profitable however the sheer volume of work it gave EAGA meant it still totalled 20% of their profit.
Also worth noting the warmfront scheme is still worth £210million over the next 2 years.