FTSE 250 movers: Fidessa and pub companies lead rise

UK midcaps were chasing their blue chip brethren higher on Monday as bargain hunters regained confidence. By late afternoon the FTSE 250 was 1.9% higher at 15,725.05.

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Enterprise Inns frothed higher after investors took courage from chairman Robert Walker shelling out just over £50,000 on Friday to buy 67,000 shares at 75.07p.

This sparked a spike in buying volume in the afternoon, after the shares had lost some of their fizz in the new year over fears of a looming £350m debt refinancing. Barclays warned earlier this month that weakening credit markets could hurt sentiment towards highly leveraged Enterprise, damaging earnings and cash flow.

But chief executive Simon Townsend dismissed this as the company delivered a trading update last Thursday, pointing out that the pubco remains highly cash-generative and is "meeting all of our debt repayment obligations as we always have done".

He added: "There’s a lot of sentiment out there in the wider market, outside of the leisure sector and outside of the UK. I can only feel that that sentiment is washing over into our sector."

Peer Mitchells & Butler was lifted by a 'buy' recommendation from Goldman Sachs, which set a price target of 410p.

In a note on the UK pub/restaurants labelled "glass half empty", Goldman noted that MAB was trading at its post-crisis trough, with peers 50% above on a 12-month forward p/e ratio despite its above-average forecast growth.

Financial sector software and services provider Fidessa gave its shares a filip with confirmation of this year's dividend and confidence about future cash flows as it invests to expand its geographic and asset class coverage.

In its preliminary results for the calendar year, Fidessa reported revenues up 7% to £295.5m, marginally ahead of expectations of £290m, with pre-tax profits of £39.1m that were flat on the prior year and in line with consensus forecasts.

Management pointed out that the growth in revenue came despite volatile conditions in financial markets, adding that end markets continued to improve, with increasing opportunity for new services.

"We do not believe that our current investment programme, including any potential investment in a new fixed income platform, is likely to have a material impact on our ability to pay further special dividends in the future," assured chief executive Chris Aspinwall.

Another stock that has bit hit hard in the 2016 melee, WS Atkins was given a lift by an upgrade from Citi based on its lower valuation.

Citi said that while Atkins’ operational trends have toughened and consensus earnings forecasts for 2017 and 2018 are felt still too optimistic, the shares now sit towards the bottom of the European business services sector and well below the sector average.

Analysts at the US bank have cut their target price, again, to 1,160p from 1,120p and upgraded to 'neutral' from 'sell'.

Although gold prices are at 12-month highs, gold miner Acacia Mining was a big loser on Monday, with muted results reflecting 8% lower average prices in 2015 compared to 2014.

Despite increasing production for the third successive year, revenue retreated 7% in the calendar year to $868m (£597.71m), with EBITDA down 31% to $175m.

However, the Africa focused miner had net cash of £105m and is engaged in an ongoing cost cutting plan to ensure sustainability. All-in sustaining costs remaining flat year-on-year at $1,112 per ounce during last year, but cash costs rose by 5% to $772 per ounce sold.

Fellow gold miner Centamin was also in the red on Monday, with prices of the yellow metal down in the last couple of days as stock markets swerved back towards risk-on mode.

Market Movers

FTSE 100 (UKX) 5,836.07 2.25%
FTSE 250 (MCX) 15,725.05 1.90%
techMARK (TASX) 2,998.93 2.61%

FTSE 250 - Risers

Fidessa Group (FDSA) 1,920.00p 8.41%
Enterprise Inns (ETI) 80.00p 7.74%
Tullow Oil (TLW) 177.70p 7.11%
Genus (GNS) 1,444.00p 6.96%
NCC Group (NCC) 279.10p 6.89%
Atkins (WS) (ATK) 1,233.00p 6.48%
Ocado Group (OCDO) 260.60p 6.45%
Mitchells & Butlers (MAB) 276.00p 6.15%
BGEO Group (BGEO) 1,714.00p 5.93%
Just Eat (JE.) 350.00p 5.93%