FTSE 250 movers: The Provvy rockets but Meggitt disappoints
London's FTSE 250 index was up 0.4% on Tuesday afternoon amid a blizzard of company news.
Flying way out ahead on the day was Provident Financial, up 73% to over £10 for the first time since August, after solid full year results were put in the shade by the announcement of a £172m settlement with the financial regulator over its investigation into the 'repayment option plan' product offered by its Vanquis Bank arm, plus an additional £20m estimated provision to cover anticipated costs associated with an investigation into its Moneybarn car finance unit.
Both are less than analysts and investors had feared and, what's more, to cover these and other costs, the group revealed a £331m rights issue that was a lot smaller than the £500m that had been trailed in the media over the weekend. If that was not enough, the group also announced that dividend payments will be resumed in the coming year.
"Not withstanding the technical impact of the rights issue, we think today’s announcement is actually better than feared," said broker Shore Capital. "As such, we think the shares will react positively this morning although we will reserve judgement on our recommendation until we have had chance to properly process our forecasts and update our fair value."
Coats Group, the thread maker, was up 11% after spinning investors a happy yarn about 2017. The company, which was promoted to the FSTE 250 last summer having been a founding member of the FT 30 index in 1935, said full year adjusted operating profit increased 11% to $174m on revenues up 4% to £1.5bn.
Sirius Minerals continued its recent good run. Earlier this month there were reports the Yorkshire polyhalite miner was close to intersecting polyhalite after the company switched provider for shaft construction contract.
Virgin Money was up after the challenger bank reported a 28% increase in underlying full-year profit as it enjoys robust customer demand and growth across its core products. However VM warned that net interest margins for 2018 will be at the lower end of the range. CEO Jayne-Anne Gadhia added: "We continue to experience robust customer demand and stable customer behaviour in a resilient housing market, and we expect to maintain solid double-digit returns in 2018."
Drax powered higher after the Yorkshire power station's underlying profits surged ahead last year and core earnings beat expectations. A total dividend of 12.3p per share was accompanied by the announcement of a £50m share buyback programme which analysts at RBC Capital Markets estimated will be 5% accretive to future EPS.
James Fisher’s annual profit bubbled up 10% fuelled by strong growth at the company's marine support division.
Among the fallers, Meggitt declined more than 3% despite reporting earnings per share more than doubling. The engineer said it had continued to execute against its targets for improved cash and margins over the medium-term, helped by recently enacted tax cuts in the States and a tailwind from FX.
Greggs gave up its early gains after reporting like-for-like sales up 3.2% in the eight weeks of 2018. "Newcastle’s finest major sausage roll maker, now also swimming in the world of cranberries, falafel and porridge, has reported another year of profit progress albeit a tad behind our forecasts, which we believe were a little bit above consensus," said ShoreCap analyst Darren Shirley.
Car dealer Inchcape was down in spite of a 33% improvement in full year pre-tax profit 33% to £370m on a constant currency basis due to a strong distribution performance in Asia and emerging markets. However, the company said it expected “a more challenging year” in 2018. because of continued supply and demand imbalance in its retail markets particularly over the first half of the year.
Melrose was down slightly as it piped up in response to final result from target GKN. Melrose carped at the announcement from GKN, saying it "adds little to the debate about which management team is best equipped to transform the business". Melrose added that profits are up "just £1m" despite an increase in sales of £1bn, without taking into account the £112m writedown.
Melrose chairman Christopher Miller said: "Today's statements are full of long-term promises and more short-term actual misses. They include a rushed plan to demerge aerospace and automotive, which begs the question whether the priority of Project Boost has been superseded by the dismemberment of GKN in the next 15 months."
Provident Financial (PFG) 1,016.50p 72.87%
Coats Group (COA) 83.00p 11.11%
Sirius Minerals (SXX) 28.21p 5.12%
Virgin Money Holdings (UK) (VM.) 277.70p 4.99%
Spirax-Sarco Engineering (SPX) 5,930.00p 4.96%
Ultra Electronics Holdings (ULE) 1,553.00p 4.86%
FirstGroup (FGP) 85.55p 4.33%
Stagecoach Group (SGC) 144.50p 3.88%
Dechra Pharmaceuticals (DPH) 2,466.00p 3.70%
Metro Bank (MTRO) 3,966.00p 3.66%
FTSE 250 - Fallers
Meggitt (MGGT) 445.40p -4.54%
TBC Bank Group (TBCG) 1,574.00p -3.44%
Moneysupermarket.com Group (MONY) 267.00p -3.26%
Inchcape (INCH) 681.00p -2.71%
Capital & Counties Properties (CAPC) 269.10p -2.43%
Workspace Group (WKP) 960.00p -2.19%
Stobart Group Ltd. (STOB) 250.00p -1.96%
Playtech (PTEC) 766.62p -1.92%
Hunting (HTG) 630.50p -1.87%
SSP Group (SSPG) 622.00p -1.82%