FTSE 250 movers: Sports Direct dives, Superdry bounces
By Duncan Ferris
Date: Thursday 13 Dec 2018
(Sharecast News) - London's FTSE 250 was down 0.53% at 17,894.21 in afternoon trade on Thursday, led lower by Sports Direct, Spire Healthcare and Ultra Electronics.
Mike Ashley's Sports Direct was the top faller as it posted a 27% drop in underlying interim profit weighed by losses at August acquisition House of Fraser. Underlying earnings before interest, taxes, depreciation and amortisation excluding HoF were up 15.5%.
Broker Peel Hunt downgraded its view on the stock, saying the figures were solid given the circumstances but it has run out of patience with the lack of visibility on strategy. Investors want "chapter and verse on the plans for House of Fraser, as opposed to an extremely optimistic pledge for it to break even next year".
Meanwhile, Spire Healthcare was also a big loser as JPMorgan cut its price target on the stock to 146p from 256p, with a note from the broker stating that analysts found it "difficult to construct a positive near-term outlook, other than the shares are cheap".
In more broker action, Ultra Electronics slumped on the back of a Barclays downgrade to 'underweight' with a lower target price of 1,120p, even as it said in an update that full-year results should be in line with expectations and that it continues to experience strong order inflow. Analysts criticised a "general lack of clarity" regarding acquisition and disposal-related payments.
Imperial Leather maker PZ Cussons fell after saying it expects consumers to remain under pressure in all of its markets as its Nigerian operations were hit by a weaker economy and currency, while property landlord Grainger dropped as its stock went ex-dividend.
Superdry was the top riser, recovering from the free-fall of Wednesday that came after the fashion retailer warned on profits, pinning the blame on unseasonably warm weather again as it posted a 49% drop in underlying interim pre-tax profit.
Security services firm G4S surged after saying it was reviewing its options to separate its cash solutions division. Broker Stifel agreed that shareholder value can be created: "The two businesses have a very distinct proposition with few synergies from having them under the same roof."
Serco racked up strong gains as the outsourcer reiterated its recently-upgraded expectations for 2018 and benefited from an upgrade to 'hold' from 'sell' at Liberum. "We maintain a degree of caution given the negative sentiment in the sector, weak new order intake and lack of positive catalysts. However, the business is turning around," said a note from the broker.
Finally, speciality chemicals company Elementis fell after HSBC cut its rating from 'buy' to 'hold' and slashed its target price from 330p to 200p, with analysts citing a combination of issues including the chromium outage in the US following hurricane-related disruption, as well as weaker trading conditions.
"We have also cut our 2019-20 estimates based on our expectations of continued raw material pressure in the core business, lower demand assumptions and tougher trading conditions," said the bank.
Market Movers
FTSE 250 (MCX) 17,894.21 -0.53%
FTSE 250 - Risers
Superdry (SDRY) 393.40p 10.75%
Serco Group (SRP) 98.65p 10.35%
G4S (GFS) 199.20p 8.64%
AA (AA.) 82.90p 4.22%
Centamin (DI) (CEY) 106.65p 3.90%
Saga (SAGA) 103.00p 2.90%
RHI Magnesita N.V. (DI) (RHIM) 3,548.00p 2.66%
Playtech (PTEC) 418.60p 2.37%
FDM Group (Holdings) (FDM) 824.00p 2.36%
Thomas Cook Group (TCG) 30.08p 2.17%
FTSE 250 - Fallers
Sports Direct International (SPD) 230.10p -16.72%
Spire Healthcare Group (SPI) 104.10p -9.64%
Ultra Electronics Holdings (ULE) 1,289.00p -6.66%
PZ Cussons (PZC) 210.60p -6.23%
Cairn Energy (CNE) 154.60p -4.69%
Grainger (GRI) 209.40p -4.30%
Elementis (ELM) 172.40p -4.17%
Metro Bank (MTRO) 1,849.00p -3.95%
Rank Group (RNK) 137.20p -3.79%
Stobart Group Ltd. (STOB) 159.80p -3.73%
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