FTSE 250 movers: Aston Martin strolls on; Hilton Food off the menu

FTSE 250 up 0.29% to 18,613.41 at 1451 GMT.

Shares in luxury sports car maker Aston Martin rose on a report that Canadian billionaire Lawrence Stroll had led a £30m investment in the company.

Stroll's Yew Tree investment vehicle now owns 23.3% of the company after he added a 4.25% stake, the Telegraph reported.

Babcock surged on Tuesday after Berenberg initiated coverage of the stock at ‘buy’ with a 425p price target, saying it was an "unanchored value proposition".

The bank noted that Babcock is the second-largest supplier to the UK Ministry of Defence and holds a leading position in the UK maritime defence sector.

"The group is in the early stages of a major turnaround following several turbulent years, led by an experienced management team which is refocusing the company on its traditional strengths: as a critical supplier of defence equipment and services to the UK and its international allies," it said.

Berenberg pointed out the turnaround is being led by chief executive David Lockwood and chief financial officer David Mellors, who together successfully led the turnaround at Cobham. "We are confident they will do the same at Babcock," it said.

Berenberg also said that despite its majority - and growing - defence exposure, Babcock continues to be "misunderstood and overlooked".

It noted that the shares have underperformed UK defence peers by 45% year to date and trade on just 7.3x 2023 price-to-earnings, which is a 45% discount to UK defence peers.

"We expect a sustained operational and financial recovery, with upside from higher defence spending, to lead to significant value creation," it said.

Berenberg said the outlook for defence budgets has significantly improved following Russia’s invasion of Ukraine. Given Babcock’s high UK exposure (circa 63% of sales), the bank expects it to be a key beneficiary of its forecast for UK defence spending to rise to 2.5% of GDP by 2030, with further double-digit upside on offer if spending reaches 3%.

"International export opportunities, particularly for the Arrowhead 140 frigate programme, are an additional source of medium-term upside," it said.

Property development and investment company Hammerson raised full-year guidance on Tuesday as footfall continued to improve and sales remained above 2019 levels.

Hammerson gained as the company now expects full-year adjusted earnings to be no less than £100.0m after year-to-date like-for-like gross rental income rose by 11% as net rental income continued to benefit from a "strong" leasing performance, improved collections, and lower bad debt charges.

The FTSE 250-listed group said footfall across the company's sites "consistently" exceeded national indices, while sales continued to be above 2019 levels - with UK Q3 sales up 4%, France 3% higher, and Ireland 2% stronger.

In terms of leasing, Hammerson said 221 leases had been signed year-to-date, representing £17.0m of headline rent - 43% ahead of previous passing rent and 2% ahead of enterprise retail value on a net effective basis.

Year-to-date rent collections hit 93% and Hammerson highlighted that it expects collection rates to continue to improve before the end of the year.

Hilton Food Group warned that full-year operating profits would be below its expectations due to challenges in the UK seafood business and the wider macroeconomic environment. Shares slumped on the news.

In its Autumn trading update, the company said volume and revenue have been in line with its expectations, with continued growth in revenue versus the same period a year earlier, although inflationary pressures are providing a headwind.

Trading in APAC has been in line, it said, with the New Zealand food park continuing to make "excellent" progress. In Europe, meanwhile, the company’s single customer facilities performed well, with revenue ahead of the previous year, mainly due to higher input prices. Hilton highlighted particularly strong trading in its Scandinavian and Central European markets.

In the group’s European multi-customer businesses, overall trading conditions have improved, it said, with the company instigating a number of cost savings initiatives and continued investments in automation.

As far as the UK seafood business is concerned, Hilton said it continues to work closely with its retail partners and has made good progress in either mitigating or passing through unprecedented inflationary costs. "However, with this occurring at a slower pace than anticipated, the process is not fully complete, and will continue for the rest of this year and into early 2023," it said.

As a result, operating profit for the year is now set to be below the group’s expectations.

"Despite this the board remains confident that the business is well placed for 2023, with the group's financial position continuing to be strong, with leverage remaining at comfortable levels," it said.

"We have made good progress in ongoing discussions regarding geographic expansion and continue to explore opportunities for growth in our existing markets as we deliver on our strategy of becoming the protein partner of choice."

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 141.45p 5.64%
Babcock International Group (BAB) 288.00p 5.11%
International Distributions Services (IDS) 227.10p 4.99%
Hammerson (HMSO) 22.49p 4.70%
Ferrexpo (FXPO) 119.90p 4.62%
Moonpig Group (MOON) 148.30p 4.00%
Liontrust Asset Management (LIO) 988.00p 3.67%
Elementis (ELM) 99.55p 3.16%
easyJet (EZJ) 377.70p 3.14%
Hochschild Mining (HOC) 57.65p 3.04%

FTSE 250 - Fallers

Hilton Food Group (HFG) 538.00p -15.14%
Tullow Oil (TLW) 46.68p -4.58%
W.A.G Payment Solutions (WPS) 78.70p -3.44%
Direct Line Insurance Group (DLG) 193.95p -2.73%
Molten Ventures (GROW) 381.80p -2.70%
Energean (ENOG) 1,532.00p -2.36%
Vistry Group (VTY) 606.50p -2.33%
Quilter (QLT) 98.64p -2.24%
Mitie Group (MTO) 72.30p -2.17%
Syncona Limited NPV (SYNC) 180.20p -2.07%