Morrisons, G4S, Meggitt set for demotion in FTSE reshuffle

Morrisons, G4S and Meggitt look set to lose their spots in the FTSE 100 on Wednesday, with Worldpay, Provident Financial and DCC likely to replace them.

The FTSE committee will reveal the results of its quarterly index review on Wednesday, with changes effective from 21 December.

Aerospace and defence firm Meggitt is almost certain to be relegated to the FTSE 250 after the company’s shares tumbled 20% on the back of a profit warning in late October. Meggitt cautioned that full year profit would be well below forecasts after it suffered softer trading in the third quarter, with a "marked deterioration" in its end markets in September.

Security firm G4S also looks set for a demotion, while supermarket retailer Morrisons – which only narrowly escaped demotion at the June and September reviews – is also a strong candidate.

Earlier this month, Morrisons said third quarter like-for-like sale fell at a faster rate than in the previous quarter and more sharply than expected, mostly due to deflation from its part in the grocery industry price war, as discount retailers Aldi and Lidl grow their market share.

"Third time might not be lucky for Morrisons’ place in the UK benchmark after it survived in the June and September reshuffles," said Jasper Lawler, market analyst at CMC Markets.

"There doesn’t look like there’ll be another ‘Weir Group situation’ where another listing loses a lot of market cap just prior to the promotions and demotions are decided," he added.

Payments processor Worldpay, which only joined the stock market in mid-October of this year and has a market capitalisation of around £5.9bn, is expected to take a spot on the top-flight index.

It is expected to be joined by sub-prime lender Provident Financial and business support services firm DCC.

Provident shares have risen 25% since the last quarterly review, while DCC’s are up 21%.