FTSE 250 movers: FirstGroup hits the buffers

FirstGroup has lost its TransPennine Express (TPE) contract after the government lost its patience over months of cancellations, with services to be brought under state control, said Transport Secretary Mark Harper.

Services will come under the Department for Transport’s Operator of Last Resort (OLR) measures from May 28.

TPE passengers have suffered from widespread delays and cancellations over the past year. The FirstGroup-owned operator, which covers an area across northern England and into Scotland, has been affected by drivers who are members of the Aslef union no longer volunteering to work paid overtime shifts.

TPE cancelled the equivalent of one in six services across most of March, according to the latest figures.

“While some improvements have been made over the past few months, it has been decided that to achieve the performance levels passengers deserve, and that the northern economy needs, both the contract and the underlying relationships must be reset,” the DfT said.

“The decision to bring TransPennine Express into the control of the Operator of Last Resort is temporary and it is the government’s full intention that it will return to the private sector.”

ASOS shares continued to fall in response to poor numbers on Wednesday.

Broadcaster ITV reported a drop in first-quarter total advertising revenue (TAR) on Thursday and said the outlook was "challenging" given the current macroeconomic backdrop.

In the three months to the end of March, TAR fell 10%. However, this was "as expected and better than the wider TV advertising market", it said.

ITV said TAR is forecast to decline 12% in the second quarter, with expected falls of 12% in April, 10% in May and 14% in June compared to the same period a year earlier.

Chief executive Carolyn McCall said the company was looking forward to the third quarter, however, with Love Island and the Rugby World Cup set to draw large broadcast and streaming audiences.

Total external revenue was down 7% during the quarter to £776m, while ITV Studios revenue was flat at £457m.

Revenue in ITV Media & Entertainment (M&E) declined 9% to £495m, with TAR as expected, down 10% and again, better than the wider advertising market.

The broadcaster said that ITVX, its free, ad-funded streaming service, continued to perform strongly, with total digital revenues up 29% and total streaming hours up 49% in Q1.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "ITV’s first quarter held few surprises. Double digit declines in advertising revenue were expected, but these are due to get worse in the new quarter. That reflects the very real challenges that come with relying on above-the-line spending during times of economic stagnation. ITV is throwing a lot at its digital transformation, and digital advertising revenue is proving more resilient. However, this isn’t enough to stem losses elsewhere, showing how deeply rooted ITV still is in traditional broadcasting.

"Studios revenue is on track to deliver mid-single digit revenue growth. This area of the business is sitting on a well of future demand thanks to the huge swell in appetite for content from other providers. There are tricky elements to deal with in content creation though. It’s a very tough business in which to inflate margins, and is a large reason ITV’s operating profit expectations have been dialled back."

TBC Bank Group reported "robust" first-quarter numbers on Thursday, after it benefited from strong growth across the Georgian economy. However, shares fell as the bank went ex-dividend.

The London-listed lender, which operates in Georgia and Uzbekistan, said net interest income jumped 27% in the three months to 31 March to 366.8m lari (£115m), while net fee and commission income rose 40% to GEL 92.4m.

Pre-tax profits rose 19.4% to GEL 296.3m, while return on equity was 25.2%.

The total number of registered users increased 42% to 14.8m.

TBC said it had benefited from a "supportive" macroeconomic environment, with Georgian GDP increasing 7.2% in the quarter. "This growth was driven by strong inflows across the board," TBC noted, "from net exports to tourism and remittances".

Vakhtang Butskhrikidze, chief executive, said: "After a highly successful 2022, we continued to deliver robust financial results in the first quarter of 2023.

"I would like to reiterate our medium-term targets: return on equity of above 20%, a cost to income ration of below 35%, a dividend payout of 25% to 35% and annual loan growth of around 10% to 15%."

Petershill Partners and Clarkson fell as they both traded without rights to a dividend.

FTSE 250 - Risers

Diploma (DPLM) 2,824.00p 4.83%
Abrdn Private Equity Opportunities Trust (APEO) 456.50p 2.93%
Bank of Georgia Group (BGEO) 3,210.00p 1.90%
Currys (CURY) 56.20p 1.90%
Caledonia Investments (CLDN) 3,575.00p 1.71%
Ithaca Energy (ITH) 159.00p 1.66%
Digital 9 Infrastructure NPV (DGI9) 66.80p 1.37%
ICG Enterprise Trust (ICGT) 1,096.00p 1.29%
TI Fluid Systems (TIFS) 128.00p 1.27%
Telecom Plus (TEP) 1,794.00p 1.24%

FTSE 250 - Fallers

ASOS (ASC) 454.50p -6.75%
FirstGroup (FGP) 115.60p -6.24%
Investec (INVP) 419.20p -5.63%
Petershill Partners (PHLL) 157.40p -5.41%
TBC Bank Group (TBCG) 2,295.00p -5.36%
Clarkson (CKN) 2,930.00p -4.25%
ITV (ITV) 74.02p -4.02%
SThree (STEM) 399.00p -3.74%
Genus (GNS) 2,544.00p -3.12%
Quilter (QLT) 82.15p -2.90%