FTSE 250 movers: Mitie slumps on downgrade; Card Factory gains on interims

London’s FTSE 250 was down 0.7% to 17,600.21 in afternoon trade.

Mitie was under the cosh after Investec downgraded it to ‘hold’ from ‘buy’ and slashed the price target to 188p from 360p as it pointed to the outsourcer’s uncertain outlook.

In the company’s trading update on 19 September, it significantly downgraded its interim and full-year outlook, without giving quantitative guidance, citing a number of headwinds.

In addition, restructuring costs of £10m are also expected to impact full-year profit, with a £15m benefit expected in the second half of next year, the brokerage said.

Mitie warned earlier this month that full-year profits would be materially lower than expected due to a drop-off in higher margin contracts in the first-half and the cost of new efficiency programmes.

On the upside, Virgin Money was in the black as Goldman Sachs reiterated its ‘neutral’ rating on the stock but lifted the price target to 350p from 280p, saying it expects the company to continue to be one of the UK’s fastest growing mortgage lenders over the next few years.

Fellow challenger bank Shawbrook also gained ground as GS reiterated its ‘neutral’ rating and upped the price target to 275p from 240p.

“In our view, developments over the last three months are likely to prove positive for the group’s net interest margin: downward movements in retail deposit pricing are positive for the group, whilst heightened economic uncertainty may ease gross yield pressure in some product lines,” Goldman said.

Card Factory racked up healthy gains after announcing a special dividend as it reported a rise in revenue and profit for the six months to the end of July.

Pre-tax profit was up 7.3% from the first half of last year to £27.6m, on revenues of £169.2m, up 4.8%.

The company upped its interim dividend by 12% to 2.8p per share and declared a special dividend of 15p per share, giving a return of £51.1m to shareholders.

This brought the total returned to shareholders via dividends since the initial public offering just over two years ago to £163.8m.

Risers

Virgin Money Holdings (UK) (VM.) 306.00p 2.48%
Card Factory (CARD) 308.50p 2.12%
Softcat (SCT) 326.90p 1.97%
CYBG (CYBG) 256.00p 1.95%
Allied Minds (ALM) 321.20p 1.74%
Ladbrokes (LAD) 139.80p 1.67%
Polypipe Group (PLP) 278.10p 1.46%
Shawbrook Group (SHAW) 239.60p 1.14%
JPMorgan Indian Investment Trust (JII) 640.00p 0.95%
Euromoney Institutional Investor (ERM) 1,106.00p 0.91%

Fallers

Hunting (HTG) 414.30p -4.25%
Aveva Group (AVV) 1,889.00p -4.02%
AA (AA.) 284.60p -3.87%
Inchcape (INCH) 634.50p -3.50%
Smurfit Kappa Group (SKG) 1,712.00p -3.27%
Sports Direct International (SPD) 274.90p -3.27%
Brown (N.) Group (BWNG) 177.90p -3.25%
Mitie Group (MTO) 179.20p -3.14%
Paragon Group Of Companies (PAG) 299.80p -3.13%
Hill & Smith Holdings (HILS) 1,123.00p -3.03%