FTSE 250 movers: Greencore rallies but Paysafe tanks on short-seller report
London’s FTSE 250 was up 0.3% to 17,688.90 in afternoon trade.
Greencore was higher amid an ongoing rights issue. Investec cut its price target on the stock to 330p from 400p post rights issue and kept its ‘buy’ recommendation.
“The acquisition of Peacock will create a step change in Greencore’s US revenue, manufacturing scale and category reach, fast-tracking its international ambitions. We expect to see EPS accretion from the acquisition in the first full year, assisted by synergy delivery.”
“However, in the medium term, we would expect the US to become a second growth engine to complement its UK convenience businesses.”
OneSavings Bank was also on the front foot as Liberum initiated coverage of a number of challenger banks, highlighting its preference for OSB, which it started at ‘buy’.
It said OneSavings is making regulatory change in the buy-to-let market work in its favour.
“Our buy-to-let matrix shows that it is the most positively geared to the fastest growing segments, namely corporate and multi-property landlords, of its peers. Advantageous market positioning, a risk management track record as strong as its peers and a rising CET1 capital ratio make OSB’s 10% valuation discount to the peer group average.”
On the downside, digital payment systems provider Paysafe suffered the heaviest losses, with traders pointing to a note by anonymous short seller Spotlight Research, which highlighted material risks from regulatory enforcement action.
Paysafe released a statement in response to the share price slump, saying all material information in the report “is either factually inaccurate or has been previously disclosed”.
The short seller pointed out that Paysafe’s largest customer, most likely to be Bet365 and which represents around 50% of its earnings, is operating a business that appears to facility and engage in illegal gambling.
“Paysafe appears to be enabling both illegal gambling and Chinese capital control evasion through undisclosed related parties run by recent former executives,” it said.
“Paysafe is headquartered and listed in the UK and may face risk of criminal prosecution and sanctions by the Financial Conduct Authority, while the Chinese business (an estimated 50%+ of earnings) may be at risk of being shut down by Chinese authorities.
NCC was also under the cosh as the cyber security expert issued a profit warning due to losses and delays of several contracts in the core IT assurance division.
For the year to end-May 2017, the group said it now expects adjusted earnings before interest, tax, depreciation and amortisation would be £45.5-47.5m.
Energy services provider Hunting was weaker despite saying that results for the full-year 2016 are likely to be in line with expectations and that earnings are expected to move into positive territory next year.
Kaz Minerals fell as it announced an agreement on a new $300m credit facility with the Development Bank of Kazakhstan, which is scheduled to be signed on 14 December.
The company said the DBK facility will finance the completion of the Aktogay project which began commissioning of its main sulphide concentrator on 6 December.
Risers
Greencore Group (GNC) 246.30p 5.26%
Thomas Cook Group (TCG) 88.80p 3.62%
P2P Global Investments (P2P) 766.00p 3.51%
OneSavings Bank (OSB) 349.50p 3.49%
IP Group (IPO) 160.00p 3.09%
B&M European Value Retail S.A. (DI) (BME) 260.60p 2.92%
Dunelm Group (DNLM) 795.50p 2.58%
Inmarsat (ISAT) 732.50p 2.45%
JD Sports Fashion (JD.) 333.40p 2.43%
Unite Group (UTG) 572.00p 2.42%
Fallers
Paysafe Group (PAYS) 307.70p -17.02%
NCC Group (NCC) 187.40p -8.45%
Evraz (EVR) 257.90p -5.53%
Hunting (HTG) 602.00p -4.52%
Kaz Minerals (KAZ) 396.10p -4.25%
GVC Holdings (GVC) 610.00p -2.94%
Vedanta Resources (VED) 935.50p -2.86%
Playtech (PTEC) 780.00p -2.74%
Restaurant Group (RTN) 320.00p -2.74%
Mitie Group (MTO) 219.60p -2.36%