Soaring shares put ITV in pole for FTSE place
ITV will this week reclaim its place in the FTSE 100 index after 19 months languishing in the second-tier FTSE 250.
Feel-good: ITV shares have risen 72% in last year
The broadcaster fell out of the blue-chip index in 2008 as the recession squeezed its advertising revenues, but the move was also seen by some as a sign of a perhaps irreversible decline in the fortunes of terrestrial commercial TV.
The recovery in trading and profits that has helped ITV shares rise 72% in the past year is good news for chief executive Adam Crozier. As well as giving a halo effect to his ten months in office, the price gain will help him on his way to bonuses of up to £17 million if he hits key targets for four years.
While ITV has benefited from the advertising bounce in the past year, 2011 will prove tougher. Although he has run the Football Association and the Post Office, Crozier has never headed a listed company before and 2011 is likely to test his mettle.
But for the time being he can bask in last week's buoyant results, which have set the seal on the group's return to the Footsie. ITV is all but certain to rejoin the index in this week's quarterly review of its members.
The final decision will depend on Tuesday's closing share prices, but at Friday's close ITV was so clearly ahead it would take a disaster to prevent its return.
The other company likely to join will be John Wood Group, which provides services to the oil industry and which has enjoyed a strong year as the rising oil price has spurred exploration.
Heading the other way are likely to be African Barrick Gold and investment company Alliance Trust. But packaging group Bunzl is also in the relegation zone and share price moves over the next two days could be crucial.
Inside the Footsie some of the best-performing stocks last week were business services groups Serco and Capita. Serco gained 12% on the week while Capita was up seven%.
Both do significant work for the public sector. It is often said that both stand to gain from public sector spending cuts as public bodies often reduce costs by outsourcing.
Both companies argue that they, too, will face price pressures. While Serco's results last week showed rising profits, its order book had shrunk due to cancelled public sector work.
In the short term, there may be a squeeze on spending through existing contracts and even a moratorium on new contracts as cost-cutting strategies are formulated. But in the long run it is clear that huge swathes of services now carried out wholly in the public sector will be transferred to private contactors.
It is hard to see how firms like Serco and Capita would not benefit.
Most watched Money videos
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Inside the new Ferrari V12 Cilindri
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- Mercedes has finally unveiled its new electric G-Class
- Mini celebrates the release of brand new all-electric car Mini Aceman
- Skoda reveals Skoda Epiq as part of an all-electric car portfolio
- Land Rover unveil newest all-electric Range Rover SUV
- Blue Whale fund manager on the best of the Magnificent 7
- Mini Cooper SE: The British icon gets an all-electric makeover
- Volvo's Polestar releases new innovative 4 digital rearview mirror
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- Should the Bank of England have cut interest rates...
- Ikea pushes back opening of its Oxford Street store to...
- BHP boss to meet his counterpart at takeover target Anglo...
- Jaguar Land Rover posts its biggest profit since 2015...
- Households with emergency savings pots rises...
- How these four private equity trusts could help you cash...
- British Airways owner IAG set for bumper summer
- My favourite 20 new cars for under £20,000 - by the...
- Rightmove expects weaker ad revenue growth as more...
- MARKET REPORT: S4 Capital shares soar as Sir Martin...
- The government is asking motoring enthusiasts for help...
- ALEX BRUMMER: UK second to United States among G7 richest...
- Footsie hits new high as economy roars back
- SMALL CAP MOVERS: Light Science Technologies sales flourish
- BUSINESS LIVE: UK GDP grows 0.6%; IAG profits take off;...
- How criminals could use AI to scam Britons - and what can...
- BA owner IAG profits climb more than sevenfold
- Vodafone told to boost security as £15bn Three merger is...