FTSE in-depth: ITV tunes in to Footsie elite
Take your seats because the Footsie's curtain is about to go up to welcome ITV back into the prestigious index following an absence of more than two years.
Tracker funds will be active next week as Wednesday's quarterly game of musical chairs should confirm that the revitalised Downton Abbey and X Factor broadcaster has reclaimed the place it lost in September 2008. That was after its share price had suffered a calamitous 60%-plus fall in a year as advertising revenues collapsed.
The shares rose 1.4p more to 91.95p in anticipation of its promotion. That was effectively rubber-stamped by this week's good gain following stronger-than-expected annual results, showing pre-tax profits trebling to £321m from £108m driven by an impressive recovery in TV advertising.
Chief executive Adam Crozier and his new management team continue to roll out a five year strategic plan which saw cost savings of £40m made in the first year.
Crozier and his chairman Archie Norman will be delighted to be back trading with the stock market's elite but the hard job is now to make sure the group stays there.
Long-suffering shareholders would like to see the shares return to 130p, the level at which a Goldman Sachs-led consortium bid for the group in 2006 before walking away. Not long after BSkyB acquired a 17.9% stake in ITV for £940m, or 135p a share. It still holds a 7.5% interest.
On the basis of one in, one out, African Barrick Gold lost 11.5p to 566p on fears it could drop through the Footsie's trap-door to make way for ITV. Floated in March of last year, the gold miner's Tanzanian operations were affected by production problems, including persistent power cuts. The soaring gold price has helped profits rise but its Footsie light could still be switched off.
Another possible change could see oil services company John Wood Group, 7p dearer at 663p, take the place of support services group Bunzl, 7p better at 736.5p. John Wood recently sold its well-support business for £1.73bn to US giant GE.
Dealers heaved a sigh of relief as February's US jobs data contained no nasty surprises.
News that non-farm payroll (employment) numbers increased by 192,000 and the unemployment rate fell to a near twoyear low of 8.9% helped the Footsie remain above 6,000, that is until the oil price moved sharply north again on growing tensions in Libya. The close was 14.7 points down at 5990.39.
Expectations that Monday's 2010 preliminary results will show like-for-like profit growth of more than 20% helped oil services group Petrofac jump 46p to 1466p. Standard Life, which reports full-year figures on Thursday, rose 6.6p to 237.4p.
Still reflecting this week's impressive results, industrial engineer IMI rose 14p further to 957p. Broker Investec's target price is 1285p. Buyers pumped up the volume at Weir Group, 20p higher at 1790p, ahead of Tuesday's annual results. Consensus analysts' forecasts suggest a 54% leap in full-year profits to £289m.
Takeover talk continues to swirl around Forth Ports, up 66p at 1523p. The latest jackanory doing the rounds suggested that Arcus Capital, formerly known as Babcock and Brown, and some new infrastructure fund 'friends' are ready to launch a 1950p-a-share bid for the UK's only listed ports company, which owns seven UK sites. Last year a 1340p-a-share cash offer for the company failed miserably.
Alexander Mining remained flat at 13.75p before its management team bangs the drum in Toronto, Canada, at next week's PDAC 2011 International Convention Trade Show. A city roadshow is also planned for their return. Yesterday, Alexander announced positive test results from the use of its proprietary AmmLeach metallurgical process to test zinc-lead-silver oxide ore from the Torlon Deposit in Guatemala. Broker Ambrian says buy.
Home shopping group Findel edged up 0.03p to 7.75p after chief executive Roger Siddle bought 4.7m shares at 8.53p and director David Sugden 586,166 at the same price. Director Patrick Byrne's purchase of 40,000 shares at 70.5p helped struggling support services group Xchanging rally 12p to 77.75p. International Ferro Metals firmed a penny to 25.75p after director Terry Willsteed bought 100,000 shares at 23.75p.
Cancer drug discovery company Sareum was flat at 2.38p after revealing that its cancer growth inhibitor therapy had shown positive results in pre-clinical trials. Apparently, when its inhibitor was combined with chemotherapeutic drugs it had led to a greater reduction in the growth rate of colon cancer than did the drugs alone.
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