FTSE 250 movers: Housebuilders and retailers climb on Brexit optimism
By Duncan Ferris
Date: Tuesday 26 Feb 2019
Builders' merchant Travis Perkins saw its shares surge as full-year profit topped expectations thanks in part to cost-cutting.
Russ Mould, investment director at AJ Bell, said: "The stars appear to be aligning for Travis Perkins. The builders’ merchant is simplifying its structure, reinvesting cash in the best parts of the business, trading is picking up in its consumer-facing brand Wickes, and operating profit improved in the second half of the year after a difficult first half. This progress will go down well with the market as many had feared that Travis had lost its way over the past few years."
Aston Martin followed close behind ahead of the Thursday release of its first financial results since the luxury car manufacturer's underwhelming stock market float in October.
Housebuilders Galliford Try, Bellway and Bovis Homes all made solid gains after FTSE 100-listed contemporary Persimmon reported that its profits topped £1bn last year.
They, and other domestically focused sectors including retailers were all on the front foot after Theresa May offered parliament a vote to take no-deal off the table. The likes of Halfords, Dixons Carphone, JD Sports, WH Smith, Sports Direct and Card Factory were all 2% or 3% higher.
Marine services company James Fisher rose after stating that full-year pre-tax profits rose 17% to £55m due to solid performances from its marine support unit and growth in services provided to the UK renewables industry.
IG Group crept upward after being initiated at 'outperform' by RBC Capital Markets, with analysts stating that while the company's previously robust growth trajectory had been interrupted by EU regulatory measures, adverse scenarios are now "more than reflected" in the share price.
"As the disorder and uncertainty surrounding the implementation of new UK/EU regulation have now begun to resolve, we would argue that the advantages afforded by IG Group’s leading competitive position within the CFD arena, as well as its ability to innovate and diversify (partially related to its ability to invest, and repurpose group resources), will become increasingly evident," said RBC analysts.
On the downside, engineering services provider Babcock was under the cosh after saying Brexit would result in a one-off tax cost of £10m as it restructures its aerial emergency services businesses to comply with European operating requirements.
Analysts at Shore Capital Markets said: "The short term performance of Babcock remains frustrating for investors, in our view, with additional charges and some revenue weakness from changing structure impacting operations. The long term positioning still remains sound, in our view, we expect stronger growth to resume in due course. On an undemanding valuation, we retain a 'buy' stance."
Ascential dropped after Goldman Sachs cut its target price for the stock from 545p to 530p a day after its results, while the JPMorgan Indian Investment Trust dropped as a Reuters poll showed the nation's economy grew at its slowest rate in over a year in the quarter ended 31 December as rural incomes weakened and softer urban demand weighed on consumption.
Market Movers
FTSE 250 (MCX) 19,304.47 0.30%
FTSE 250 - Risers
Travis Perkins (TPK) 1,407.50p 10.83%
Aston Martin Lagonda Global Holdings (AML) 1,353.60p 7.89%
Galliford Try (GFRD) 732.31p 4.69%
Grafton Group Units (GFTU) 803.00p 4.49%
Bellway (BWY) 2,979.00p 4.05%
Balfour Beatty (BBY) 289.90p 3.76%
Halfords Group (HFD) 243.40p 3.31%
Bovis Homes Group (BVS) 1,044.00p 3.11%
Fisher (James) & Sons (FSJ) 1,866.00p 3.09%
IG Group Holdings (IGG) 568.00p 3.09%
FTSE 250 - Fallers
Babcock International Group (BAB) 552.00p -4.27%
TI Fluid Systems (TIFS) 181.40p -4.22%
Dechra Pharmaceuticals (DPH) 2,434.00p -3.87%
Ascential (ASCL) 364.00p -3.45%
Sophos Group (SOPH) 334.20p -3.13%
Tate & Lyle (TATE) 699.80p -2.62%
Pantheon International (PIN) 2,128.00p -2.39%
Inmarsat (ISAT) 389.50p -2.36%
JPMorgan Indian Investment Trust (JII) 650.00p -1.81%
HarbourVest Global Private Equity Limited A Shs (HVPE) 1,434.00p -1.78%
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