Alexander Bueso Sharecast News

15 Apr, 2020 17:11

FTSE 250 movers: JD Wetherspoon hit by expectations for prolonged period of low demand

Hochschild Mining

235.00p

16:35 07/11/24

0.43%

1.00p

Leisure-related shares paced declines on the second-tier index on Wednesday, as investors' attention pivoted back to the sector as risk appetite soured on the back of exceedingly weak economic reports and corporate updates Stateside.

FTSE 250

20,635.37

17:09 07/11/24

n/a

FTSE 350

4,495.56

17:10 07/11/24

n/a

FTSE All-Share

4,453.48

16:30 07/11/24

n/a

Genus

1,920.00p

16:35 07/11/24

-1.94%

-38.00p

Mining

11,474.12

17:04 07/11/24

-0.16%

-18.76

Pharmaceuticals & Biotechnology

19,184.55

17:10 07/11/24

-1.17%

-226.57

Travel & Leisure

8,388.29

17:10 07/11/24

-0.17%

-14.53

Wetherspoon (J.D.)

627.50p

16:35 07/11/24

1.13%

7.00p

Against that backdrop, Cineworld, Hyve Group, Mitchells&Butlers and JD Wetherspoon were all lower.

Weighing on the latter, analysts at Canaccord Genuity cut their target price for the pub owner's shares from 190.0p to 170.0p, telling clients that the company could be forced to raise as much as £250m of fresh money, although a share sale wasn't the only option available.

"Our scenario analysis suggests that it may need to raise up to £250m to survive the liquidity crisis - not only to cope with closure but also potentially a sustained period of weak demand which does not suit it's high-volume, high-cost, low-margin business model," the Canadian broker said.

"We would expect it to be talking to the government COVID-19 Corporate Financing Facility and its bankers; and investors should not fully discount an equity fundraise (we suspect this not a preferred route for chairman, Mr Martin)."

Shares in Hochschild Mining were also moving lower, dragged down by a target price cut out of Berenberg from 1,500.0p to 900.0p.

With the precious metals miner's two Peruvian mines now expected to be locked down for longer, together with the San Jose mine in Argentina, the German broker said net debt was set to rise from $33m at year-end 2019 to $46m by the end of the first half.

Berenberg also cut its estimate for 2020 earnings per share by approximately 23% which combined with a stronger pound led to its target price reduction.

The miner's cashflow situation was also a source of concern.

"While we believe that Hochschild's balance sheet is flexible enough to withstand near-term volatility, we retain our Hold rating partly due to the valuation (0.91x NAV), but also due to the uncertainty of cash flow, driven by operational lockdown," Berenberg said.

Going the other way, shares in cyber-security software maker Avast pushed higher ahead of its first quarter trading update due out on the following day.

Genus was also wanted, with its stock continuing to hover near record highs.

Market Movers

FTSE 250 (MCX) 15,436.37 -4.02%

FTSE 250 - Risers

Hastings Group Holdings (HSTG) 190.10p 4.16%
Convatec Group (CTEC) 182.00p 2.02%
HarbourVest Global Private Equity Limited A Shs (HVPE) 1,326.00p 2.00%
Genus (GNS) 3,484.00p 1.57%
Caledonia Investments (CLDN) 2,645.00p 0.95%
Foresight Solar Fund Limited (FSFL) 114.00p 0.88%
PureTech Health (PRTC) 265.50p 0.57%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,876.00p 0.28%
Pershing Square Holdings Ltd NPV (PSH) 1,528.00p 0.26%
Barr (A.G.) (BAG) 511.00p 0.20%