FTSE 250 movers: Sirius' shares dive as Go-Ahead's drive upward

Sirius Minerals tanked after revising up its capital expenditure estimate for the development of the second stage of its North Yorkshire polyhalite project by 13.5% from $3.7bn to $4.2bn. The fertiliser company saw its shares temporarily suspended after falling more than 27% in early trading but several analysts remained optimistic about the company's prospects.

House broker Liberum cut its target price for the company's shares from 60p to 50p based on lower estimates for net present value, but kept its 'buy' rating given how the shares were trading at a discount of between 60% to 70% the NPV estimates.

Animal biotech firm Genus tumbled as its full-year revenue missed forecasts, up 2% at £470.3m. The company reported a 4% rise in adjusted full year pre-tax profits to £58.5m, as it anticipated a tough time ahead with trade disputes and the recent spread of African swine fever to China.

Analysts at Peel Hunt said adjusted PBT was in line with its forecast of £60m, but as a result of the swine fever and trade war disruption reduced its 2019 estimate by £2.5m to £62m, but kept its 2020 estimate of £70m. "Genus is in an increasingly strong position and we have experienced ST weakness from geopolitics, disease outbreaks many times before – we do not see this as a concern, particularly as Genus position generally strengthens when these issues occur."

Meanwhile, Weir Group slumped as it highlighted a recent softening in demand for original equipment and some order book delivery deferrals. The engineering firm, which was holding its investor roadshow in London to discuss half-year results, said that given recent updates from oil and gas industry peers in recent days, it expected to discuss the current North American oil and gas market conditions, which have shown "initial signs of pricing pressure".

Liberum downgraded capital goods companies after its proprietary early cycle indicator flashed a warning for the sector. The indicator is used to forecast the organic sales growth of early-cycle businesses, such as thermal processes specialist Bodycote’s automotive & general industrial division, and back-tested over 20 years has an 80% correlation with organic growth and leads by 6-9 months.

As a result, analysts downgraded Bodycote to 'hold' with a target price of 940p and metal industries firm IMI to 'sell' with a target price of 1020p

Going the other direction unusually fast was Govia Thameslink operator Go-Ahead Group, which surged as full-year results came in ahead of consensus expectations at the operating profit level.

"Best news for shareholders is that free cash flow has underpinned the dividend and generous yield, and that this year should be strong, too," said broker Interactive Investor. "Unfortunately, there’s no news on a replacement for finance chief Patrick Butcher who recently announced he’ll be off to Capita in a few months’ time."

McCarthy & Stone was looking sprightly even as the retirement housebuilder revised its guidance for full year operating profits lower following a "tough" year, although it did expect to post a rise in revenues. Weaker consumer spending and economic uncertainty have catalysed the firm's newly expected full-year operating profits of between £65m and £73m, which was down from the previous estimate for between £65m and £80m.

UBS noted that the company accelerated build activity but, given additional caution throughout the year with 54 land exchanges and 37 planning consents, the company is undergoing a strategic review for a more measured trajectory for volume growth.

Also rising in afternoon trading was fellow housebuilder Bovis Homes, after it posted a 41% jump in first-half pre-tax profit as completions rose. Management said it was eyeing a record year of profits, at the top end of its expectations.

UBS analysts said that while results were slightly ahead of our estimates, "we believe that leaving mid-term guidance unchanged is somewhat disappointing giving the ongoing margin initiatives detailed in the [capital markets day in May]".

Housebuilder Redrow, which had posted a jump in full-year profit on Wednesday as revenue rose to a record level on the back of higher completions, was seeing follow-through buying on Thursday.

Market Movers

FTSE 250 (MCX) 20,318.64 -0.34%

FTSE 250 - Risers

Go-Ahead Group (GOG) 1,799.00p 10.03%
FirstGroup (FGP) 92.95p 3.45%
Euromoney Institutional Investor (ERM) 1,336.00p 3.41%
McCarthy & Stone (MCS) 115.70p 3.40%
Redrow (RDW) 596.15p 3.32%
Bovis Homes Group (BVS) 1,163.50p 2.83%
IP Group (IPO) 130.40p 2.68%
Syncona Limited NPV (SYNC) 284.00p 2.53%
Barr (A.G.) (BAG) 728.00p 2.39%
QinetiQ Group (QQ.) 276.40p 2.22%

FTSE 250 - Fallers

Sirius Minerals (SXX) 28.91p -11.50%
Dechra Pharmaceuticals (DPH) 2,184.60p -7.90%
Genus (GNS) 2,552.00p -6.25%
Weir Group (WEIR) 1,679.00p -5.99%
Hunting (HTG) 765.50p -4.43%
IMI (IMI) 1,153.00p -4.24%
Sophos Group (SOPH) 497.20p -4.20%
Charter Court Financial Services Group (CCFS) 348.00p -3.60%
Bodycote (BOY) 909.00p -3.45%
Playtech (PTEC) 486.90p -3.24%