FTSE 250 movers: DiscoverIE sparks, Asos slips again

Niche electronics maker DiscoverIE Group reported a 70% rise in annual profits, driven by a strong order book.

The company on Wednesday said pre-tax profit for the year to March 31 came in at £29.1m. Revenue was up 18% to £449m.

It added that the current financial year had started well with continued organic sales growth and its order book remained at a higher-than-expected level, in line with last year, “providing good visibility of demand”.

Harbour Energy, the UK’s largest North Sea oil and gas producer, is in merger talks with US rival Talos Energy, it emerged on Wednesday.

According to Reuters, Harbour and Talos - which operates in the Gulf of Mexico - have been holding on-off talks for around six months, but negotiations have ramped up in recent weeks.

Citing one unnamed person familiar with the matter, Reuters said a deal would give Harbour the opportunity to list in New York. Harbour is looking to diversify overseas and scale back its UK investments, after the government imposed a windfall tax on British oil and gas producers. It launched a review of its operations in January, and in April told staff it expected to cut around 350 onshore jobs because of the levy.

Harbour has a market value of around £2bn, while Talos is valued at around $1.8bn. Terms have not been confirmed, however, and the sources told Reuters there was no certainty a deal would be reached.

Neither company has commented on the report.

New York-listed Talos closed 5% higher on Tuesday, and by 1100 BST on Wednesday, London-listed Harbour had put on 4% at 250p.

Should a deal go ahead, it would be the second announced this year by a North Sea operator, with AIM-listed rival Hurricane Energy currently in the process of being acquired by Prax Exploration & Production after accepting an offer worth up to £249m in March.

Suppliers to Asos are cutting ties with the fast fashion retailer, it was reported on Wednesday, over credit insurance concerns.

The Times said that suppliers were responding to insurers reducing or withdrawing trade credit insurance following a slide in earnings at Asos. Allianz Trade is understood to have withdrawn cover entirely, while Atradius has reduced cover, the newspaper noted.

Credit insurance protects suppliers against the risk of their customers going bust in between them accepting an order and receiving payment. A long-standing part of the supply chain, if cover is not available suppliers will often ask for payment before fulfilling an order, or simply not deal with that retailer.

Asos, which was demoted from the FTSE 250 last week, has been rocked in recent months by stiff competition, a return to bricks and mortar shopping post pandemic, the cost of living crisis and surging product returns. First half pre-tax losses came in at £290.9m while revenues fell 10% to £1.8bn.

The Times cited a number of suppliers, all unnamed, one of whom said they weren’t delivering "as insurance has been lost".

Another said it had yet to supply the retailer this year, and wouldn’t do so again "until they get credit insurance backing. Credit insurance is so important these days and makes doing business not as risky.

"The only way [Asos is] going to get people to supply to them again is to pay earlier, the drawback being that its eats into cash."

An Asos spokesperson said: "While trade credit insurance cover has been tightening across the retail industry, we have seen no impact on our trading."

FTSE 250 - Risers

Discoverie Group (DSCV) 892.00p 11.92%
Indivior (INDV) 1,741.00p 3.57%
Tullow Oil (TLW) 26.28p 2.98%
Harbour Energy (HBR) 246.50p 2.88%
Carnival (CCL) 915.40p 2.76%
QinetiQ Group (QQ.) 370.00p 2.61%
Mitie Group (MTO) 96.50p 2.44%
Chemring Group (CHG) 300.00p 2.39%
TUI AG Reg Shs (DI) (TUI) 551.00p 2.32%
Digital 9 Infrastructure NPV (DGI9) 63.30p 2.26%

FTSE 250 - Fallers

Abrdn Private Equity Opportunities Trust (APEO) 435.50p -3.01%
Jupiter Fund Management (JUP) 112.00p -2.69%
Kainos Group (KNOS) 1,268.00p -2.31%
AJ Bell (AJB) 315.20p -2.11%
ASOS (ASC) 348.60p -2.08%
Baillie Gifford Japan Trust (BGFD) 757.00p -2.07%
CMC Markets (CMCX) 171.80p -1.94%
Bakkavor Group (BAKK) 94.00p -1.88%
OSB Group (OSB) 526.50p -1.86%
Quilter (QLT) 86.45p -1.82%