FTSE 250 movers: Inmarsat rockets, FirstGroup tracks lower

The FTSE 250 shot up towards new all-time highs on Thursday before a mid-morning dip swept away some of the early froth.

Satellite services group Inmarsat rocketed higher after reports emerged of it was in talks with Japan's SoftBank Group about a possible tie-up with its satellite startup OneWeb.

Following widespread reports that rival satellite firm Intelsat's bondholders have rejected a proposal to combine with OneWeb, Bloomberg was told that the Japanese tech conglomerate has started talks with alternative satellite partners, including Inmarsat.

RBC Capital Markets reckoned Inmarsat would be open to an approach, with its £3.8bn market cap affordable to SoftBank and providing significant ground assets to help OneWeb to hurdle barriers to entry in its plans to spread affordable internet connectivity around the globe.

Other top risers included Auto Trader and Sophos, which were lifted by bullish broker notes from Barclays and Numis respectively.

Barclays bumped the used car marketplace up to 'overweight' from 'equalweight' and lifted the price target to 470p from 425p ahead of the full-year results on 8 June.

The bank said there are risks in the outlook for used car pricing, but it does not expect wide forecourt closures. Even if that were to happen, what matters most for Auto Trader are levels of used car stock, analysts pointed out.

As for Sophos, Numis upgraded its forecasts following the full year results thanks to the combination of the very strong performance and an expanded renewals base and better earnings mix for the new fiscal year.

"Given the star performance of Sophos Central reducing friction in the sales and upgrade processes, we think new business growth and renewals will remain strong and our FY18 forecast of 20% billings growth is a little ahead of management's "mid-high teens" guidance," analysts wrote, upping their target price to 544p from 305p.

Fallers were led by bus and train operator FirstGroup as its report of a “significant improvement” in full year results was outweighed for investors by the lack of a dividend announcement.

Sales were up 8.3%, profit before tax was 23% higher and earnings per share up 20.4% but analysts at Shore Capital said "we are disappointed that the board has not reinstated the dividend, something which we believe is now overdue".

Events and B2B information group Ascential was down 1% after selling its remaining 11 UK-based 'heritage brands' to Metropolis International for £23.5m in cash, which will be used to reduce its net debt. "This is not a particularly stroking exit multiple, but seems reasonable in the context of a package of unwanted orphan assets," ShoreCap said.

Polymetal was down almost 2% after increasing its stake in the Dolinnoye gold property in Kazhakstan to 50% in a bid to strengthen the company's Varvara hub concept. It acquired another 25% interest for $1.6m, completing the earn-in arrangement with its partner on the property, which, based on Polymetal's share of the project, has ore reserves were estimated at 2.6 Mt at 2.4g/t of gold for 202,000 oz. of gold contained.

FTSE 250 - Risers

Inmarsat (ISAT) 854.50p 6.81%
Auto Trader Group (AUTO) 434.70p 4.47%
Sophos Group (SOPH) 469.10p 3.69%
Restaurant Group (RTN) 377.10p 3.54%
Caledonia Investments (CLDN) 2,973.00p 3.19%
Britvic (BVIC) 720.50p 2.93%
IWG (IWG) 341.10p 2.65%
Ferrexpo (FXPO) 176.00p 2.50%
Brewin Dolphin Holdings (BRW) 346.90p 2.45%
Grafton Group Units (GFTU) 793.50p 2.19%

FTSE 250 - Fallers

FirstGroup (FGP) 141.40p -5.61%
Nostrum Oil & Gas (NOG) 505.00p -4.99%
Aldermore Group (ALD) 232.10p -4.72%
Clarkson (CKN) 2,581.00p -3.69%
Daejan Holdings (DJAN) 6,600.00p -2.73%
Petra Diamonds Ltd.(DI) (PDL) 126.60p -2.39%
Crest Nicholson Holdings (CRST) 616.50p -2.38%
Dechra Pharmaceuticals (DPH) 1,902.00p -2.16%
Polymetal International (POLY) 989.50p -2.13%
Ted Baker (TED) 2,399.00p -2.12%