FTSE 250 movers: Indivior takes a dive, Just Group boosted by peer's news

Just Group

130.20p

16:40 06/11/24

-3.98%

-5.40p

London's FTSE 250 was down 0.45% at 20,343.88 in afternoon trade on Thursday.

Life Insurance

5,429.56

17:04 06/11/24

0.39%

21.10

Drug developer Indivior took another leg lower on Thursday, dropping to a new two-year low after it issued a profit warning just before the close of trading the day before.

Reinstating full year guidance after it had been withdrawn in the summer due to uncertainty about court challenges from rivals, the company said it expected much lower sales from its new Sublocade monthly anti-opioid treatment, meaning net income was guided to come in at $230-255m at constant exchange rates and excluding exceptional items, down from the $290-320m guidance given at the start of the year.

Despite the profit warning, broker Numis reiterated its 'buy' rating for the drug development company putting its target price at 350p. Jefferies slashed its EPS forecast by more than 50% from 2020 as the delayed Sublocade ramp-up "significantly impacts a largely fixed cost base despite cost savings" with new cost savings muting the Sublocade decline resulting in a 7% cut for 2019. For the current year, its EPS forecast was upped 23% as savings will more than compensate for Sublocade. Jefferies updated sum-of-the-parts target price is 250p.

Meanwhile, IG Group fell after chief executive Peter Hetherington made an abrupt exit after three years as the boss of the spread betting and derivatives trading platform.

The departure of the well-liked Hetherington, who joined the group as a graduate trainee in 1994 and worked his way up to the top, comes just a few days after IG reported a drop in first-quarter revenue, caused partly by new restrictions on trading of complex financial products by retail customers.

Analysts at Barclays said the language of the announcement "suggests that the board has been considering this succession issue for some time, rather than a major fall out between CEO and the board". They added: "We rated Peter Hetherington highly as CEO, but in a company that generated PBT of more than £280m in FY18 and now offers a dividend yield of c6%, we believe that the show will go on under a new CEO."

Online gambling firm 888 Holdings was lower despite reporting a first half swing to profitability as revenues in the UK fell sharply due to a government clamp down on the sector.

"Heightened regulatory scrutiny" saw UK revenue fall 18% to $86.5m but a solid performance in Spain and Italy drove a 5% overall revenue increase to $283.9m, setting up pre-tax profits for a rise to $60.1m compared with a $17.3m loss in the same period last year.

Broker Canaccord reiterated a 'buy' rating with a target price of 306p, as it said the outfit was "modestly ahead" of its expectations despite the regulatory pressures.

Car accessories and bikes retailer Halfords also skidded lower as management announced that up to £20m a year extra would be diverted to store improvement and integrating services to keep pace with changing consumer trends.

The retailer also said that pre-tax profit will remain broadly unchanged in 2020 from 2019 in spite of the extra investment, going on to rise at a rate in mid single digits after that.

At the other end of the pitch, annuities specialist Just Group romped higher after the news that private equity-backed peer Rothesay had agreed to buy £860m of lifetime mortgages from state-owned UK Asset Resolution.

Just had dropped over the last few months due to concerns that rules proposed by the Prudential Regulation Authority concerning the treatment of equity release mortgages could damage its capital position and force a cash call.

RBC said that the UK Asset Resolution sale "shows real confidence from a major bulk annuity writer that the PRA is not going to go with its most prudent scenario", and that it was "excellent news for Just Group".

Over-50s services provider Saga rose despite reporting a revenue decrease of 1.7% and underlying pre-tax profit down 3.7% due to planned investments and increased in new business acquisition costs, but kept its dividend unchanged.

Customer numbers were driven by a 19% increase in new business from Motor and Home insurance broking, though the more competitive pricing backdrop meant acquiring customers came at a higher cost so this did not translate into profitability.

Broker Numis reiterated its 'buy' rating for the company's shares and offering a target price of 180p, while Peel Hunt said a recent string of new management appointments and improved governance "should put Saga back on track to rebuild what we believe is an attractive and distinct affinity broker model".

Restaurant and pub owner Mitchells & Butlers bubbled up as it said total sales for the year to date had increased 0.5%, impacted by disposals in the previous 12 months.

The owner of Harvester and All Bar One said like-for-like sales growth was 2.2% in the eight weeks ended 22 September, adding that the period had seen a more normalised split between drink and food sales following a period of very strong drink growth over the summer.

Chief executive Phil Urban said the company continued to work to “mitigate the cost headwinds impacting the industry and we remain confident of delivering full year results in line with the board's expectations".

Market Movers

FTSE 250 (MCX) 20,343.88 -0.45%

FTSE 250 - Risers

Just Group (JUST) 86.95p 5.27%
Entertainment One Limited (ETO) 395.20p 3.40%
Greencore Group (GNC) 190.90p 2.94%
Saga (SAGA) 129.61p 2.87%
Ted Baker (TED) 2,370.00p 2.42%
Contour Global (GLO) 210.00p 2.34%
Mitchells & Butlers (MAB) 262.80p 2.26%
Pagegroup (PAGE) 574.00p 1.86%
G4S (GFS) 245.00p 1.62%
Cairn Energy (CNE) 229.80p 1.59%