FTSE 250 movers: Travis Perkins hammered, retailers gloomy again
The FTSE 250 was feeling the cold more than its illustrious big sister on Wednesday, as falls from Travis Perkins and a raft of retailers.
Building merchant Travis Perkins fell as profits for last year fell slightly short of City forecasts and the outlook for profits in 2018 was for no growth, which was 2.3% less than analysts had pencilled in. "Not a good outlook then given UK GDP growth is not forecast to be growing from here," said Jamie Constable at N+1Singer, who saw negative read-across for Grafton, SIG, Kingspan, Howden Joinery and Kingfisher.
Greggs was down a day after results, despite newspaper headlines about job cuts and a 'centre for doughnut excellence' as it ramps up expansion.
Analysts at Barclays said the fast-food group had served up a strong top-line performance with a vertically integrated business model helps the company provide a value for money offer, but cost headwinds "are challenging" and although food price inflation should moderate to 3-4% in 2018, wage inflation is expected to accelerate to 3.6% this year from 3.1% last year. Barclays expects only flat EBIT margins this year, retains its 'equal weight' rating and 1,405p price target.
Genus was down despite another strong set of results, where adjusted pre-tax profits were up 20% and adjusted EPS up 39% to 40.9p. The company was bullish about prospects for its recently launched Sexcel product, despite warning of more demanding year-on-year comparisons in the second half.
Broker Liberum, which has a 2,400p target price, was positive: "Strategic progress was made on many fronts and the outlook is confident despite rising currency headwinds in 2H18. We already discounted the latter in our recent in depth report and so are not making any changes to our estimates save for the 1H18 non-cash US tax benefit which boosts FY2018 EPS by 8%."
Hedge fund organiser Man Group fell despite reported a 35% jump in 2017 funds under management to $109.1bn, as net inflows surged to $12.8bn from $1.9bn the year before. Recent moves in markets were said to have impacted investment performance in some areas, particularly for momentum strategies. "However, looking forward Man is well positioned, with strong fundamentals, investment in innovative strategies and a continuing pipeline of interest from clients."
Retailers N Brown and Card Factory were down amid a renewed gloominess in the retail sector after Maplin and Toys R Us officially entering administration this morning. Analyst Neil Wilson at ETX Capital there were implications for the retail market in general and investors elsewhere are seeing some read-across to other operators.
Going the right way, risers were led by the increasingly buoyant James Fisher & Sons a day after its results. Investors should take advantage of an unusual opportunity to buy the shares relatively cheaply, analysts at Canaccord Genuity said. Annual results on 27 February were good and more than £40m could be freed for acquisitions as capital requirements stabilise.
The AA rallied like Colin McRae two days after skidding lower on its expected relegation from the FTSE 250 index in the next index reshuffle, which was decided based on market closing prices on Tuesday that were to be confirmed by FTSE Russell after the close on Wednesday.
Elementis bounced back and Drax added to its gains, both coming a day after each company's solid financial results.
Market Movers
FTSE 100 (UKX) 7,281.32 -0.02%
FTSE 250 (MCX) 19,804.09 -0.36%
FTSE 250 - Risers
Fisher (James) & Sons (FSJ) 1,598.00p 13.33%
AA (AA.) 79.10p 7.65%
Ultra Electronics Holdings (ULE) 1,607.00p 5.72%
Elementis (ELM) 293.20p 4.42%
Drax Group (DRX) 247.80p 3.86%
Ocado Group (OCDO) 557.60p 2.69%
Weir Group (WEIR) 2,050.50p 2.47%
Marshalls (MSLH) 419.80p 2.39%
Booker Group (BOK) 228.60p 2.28%
Indivior (INDV) 385.40p 2.15%
FTSE 250 - Fallers
Travis Perkins (TPK) 1,308.05p -8.85%
Greggs (GRG) 1,221.00p -5.50%
Genus (GNS) 2,210.00p -5.39%
Man Group (EMG) 171.30p -5.39%
NewRiver REIT (NRR) 297.50p -5.25%
Brown (N.) Group (BWNG) 191.20p -5.25%
Grafton Group Units (GFTU) 765.50p -4.07%
FirstGroup (FGP) 83.25p -3.76%
Vectura Group (VEC) 73.25p -3.75%
Card Factory (CARD) 198.40p -3.60%