FTSE 250 movers: The AA crashes while Card Factory gets well soon
London's FTSE 250 was down 0.20% at 20,419.67 in afternoon trade on Wednesday.
The AA skidded down more than 14% as the roadside assistance group confirmed that profit margins had moved into a lower gear in the first half of the year as investment increased in line with its new strategy.
While revenue in the six months to 31 July of £480m was up 2% on a last year, underlying earnings before interest, tax, depreciation and amortisation fell 17% to £161m, though this still kept the group on track to produce trading EBITDA of £335-345m for the full year.
The roadside repairs organisation cited a "pothole epidemic" amid severe winter weather as driving its 65% drop in half year profits to £28m.
Barclays said the trading EBITDA of £161m in the first half would imply a split of 47.5% and 52.5% between the two halves, "which is consistent with prior years, in our view, and a reasonable result given breakdowns are up 8% year-on-year in 1H due to the weather". Jefferies analysts argued that interim EPS of 6.5p implied 55% was needed the second half versus 52% usually.
On The Beach dropped amid fears that travels firms have been hit by a warm summer keeping potential holidaymakers in the UK, while Ryanair, with which some of its holidays are booked, announced it was cancelling 8% of flights this Friday.
Also dropping was construction firm Kier Group, as its poor cash flow track record reduced JPMorgan Cazenove's confidence in medium-term guidance from the construction group, leading analysts to downgrade their stance on the shares to 'neutral' from 'overweight'. Analysts also cut their share price target to 1,042p from 1,369p, though acknowledged that the company's valuation is "clearly optically attractive".
High street greetings card retailer Card Factory recuperated quickly after falling 4% on Tuesday in the wake of a drop in underlying pre-tax profit and like-for-like sales due to extreme weather and consumer caution.
Berenberg reiterated its 'sell' rating of the company's shares with a target price of 150p, calling the outfit's results "weak" but acknowledging that the special dividend of 5p provided an attractive, if unsustainable, yield for investors.
Storming of the back of broker ratings were Ferrexpo, which rose after Citigroup upgraded its rating of the miner's shares from 'neutral' to 'buy', and sportswear retailer JD Sports, which had its 'buy' rating reiterated by Peel Hunt.
Getting a good froth up, PZ Cussons said first-quarter trading was in line with expectations as growth in Europe and Asia offset problems in Nigeria. In a trading update the maker of Imperial leather soap said its performance in the three months to the end of August was supported by new products and tight cost control.
Consequently, Numis reiterated a 'hold' rating for the soap maker's shares, with a target price of 230p.
Market Movers
FTSE 250 (MCX) 20,419.67 -0.20%
FTSE 250 - Risers
Card Factory (CARD) 190.40p 6.37%
Ferrexpo (FXPO) 201.40p 4.38%
Contour Global (GLO) 207.20p 3.50%
PZ Cussons (PZC) 234.80p 2.26%
Tate & Lyle (TATE) 666.60p 2.18%
Pantheon International (PIN) 2,142.00p 2.00%
Sophos Group (SOPH) 499.93p 1.82%
Fisher (James) & Sons (FSJ) 1,854.00p 1.76%
JD Sports Fashion (JD.) 461.70p 1.72%
Hastings Group Holdings (HSTG) 262.00p 1.55%
FTSE 250 - Fallers
AA (AA.) 102.35p -14.36%
TalkTalk Telecom Group (TALK) 120.20p -5.95%
Hochschild Mining (HOC) 161.25p -4.95%
On The Beach Group (OTB) 488.00p -4.31%
Hunting (HTG) 806.50p -3.82%
Kaz Minerals (KAZ) 546.60p -3.56%
BCA Marketplace (BCA) 204.00p -3.55%
Kier Group (KIE) 995.30p -3.18%
Plus500 Ltd (DI) (PLUS) 1,405.00p -3.10%
Ibstock (IBST) 234.40p -2.90%