FTSE 250 movers: Playtech plunge cancels out Vedanta gains
London's FTSE 250 index started the month of July on the back foot, as a profit warning from Playtech combined with declines in the oil and gas sector.
Playtech plunged 26% after the gambling software company said the current sales run rate in Asia was "materially" below the average in the second half of last year and what was expected for the second half of this year. If its continues at current levels, revenue from Asia is expected to be around €70m lower than original expectations, meaning adjusted EBITDA for 2018 is expected to come in at €320-360m, versus €322m a year earlier.
Several oil producers, including Premier Oil and Tullow Oil, were in the red as crude oil prices fell. Brent crude was down 1.6% to $77.93.
"WTI and Brent Crude oil are lower today after President Trump suggested that Saudi Arabia should increase its oil output," said market analyst David Madden at CMC Markets. "The relatively high oil price is hurting business due to higher costs. The US and Saudi Arabia have a close relationship and traders are selling oil as the Saudi’s might boost output to keep the US onside. "
Serco shares fell again after lowering its full-year revenue outlook at the end of last week.
BBA Aviation fell despite the aviation support and aftermarket service provider receiving final governmental and regulatory approvals to complete its acquisition of EPIC Aviation, the provider of fuel and fuel-related services.
Sirius Minerals fell despite an update that its North Yorkshire Moors project remained “on track” to deliver first polyhalite and commercial production in 2021 and that the company will close the key Stage 2 debt financing process by the end of this year. With the initial bank due diligence underway, with some "positive" early responses and further ones due over the coming weeks that will allow the company to progress discussions with potential lenders and the Infrastructure & Projects Authority (IPA) to finalise the financing.
House broker Shore Capital noted that the company needs 6.5Mtpa of binding take-or-pay offtake agreements to gain the Stage 2 approval, with the current contracted sales currently standing at 4.7Mtpa. "To close this gap, the company’s current priority is to conclude agreements in Western Europe and Brazil, with commercial discussions = reported to be 'well advanced' with multiple customers in each of these key markets. That said, opportunities in other regions also continue to be progressed."
The biggest riser was diversified miner Vedanta which revealed that a possible £778m all-cash takeover offer had been put forward by founder and major shareholder Anil Agarwal, which comes amid a share slump after several protestors were killed by police at protests against the expansion of the company's Tuticorin copper smelter in India. The proposed offer from Agarwal's Volcan vehicle, which already owns 66.53% of the FTSE 250 company's shares, will be made for a cash price of 825p, plus shareholders will be entitled to receive the previously announced final dividend of $0.41 per share. Independent directors indicated they would be prepared to recommend the deal.
Analysts at Liberum said it was a "curious action" given that Agarwal's widely ambitious plans. "Minority shareholders may hold out for more, but given the wild ride of the Vedanta share price, they may be keen on an easy exit."
Meggitt was hoisted higher after the engineer increased its revenue guidance for the year and announced a divisional restructure. Following a stronger-than-expected second quarter across its civil aftermarket, military and energy market segments, the now expects total organic revenue growth in 2018 of 4% to 6%, up from previous guidance of 2% to 4%.
A downbeat note was that a slower-than-expected recovery at the company’s polymers and composites business means operating margins are now expected to be towards the lower end of the guidance range of 17.7% to 18.0%.
Stagecoach was attracting buyers after falling more than 12% in June.
Market Movers
FTSE 100 (UKX) 7,563.10 -0.97%
FTSE 250 (MCX) 20,634.16 -0.94%
techMARK (TASX) 3,500.99 -0.60%
FTSE 250 - Risers
Vedanta Resources (VED) 818.60p 26.56%
Meggitt (MGGT) 524.60p 6.35%
Stagecoach Group (SGC) 148.80p 5.08%
Virgin Money Holdings (UK) (VM.) 381.40p 3.95%
Superdry (SDRY) 1,164.00p 3.74%
TI Fluid Systems (TIFS) 257.00p 3.63%
CYBG (CYBG) 328.40p 3.40%
Stobart Group Ltd. (STOB) 237.00p 3.04%
Fisher (James) & Sons (FSJ) 1,800.00p 2.97%
CLS Holdings (CLI) 235.00p 2.84%
FTSE 250 - Fallers
Playtech (PTEC) 559.40p -25.71%
Premier Oil (PMO) 119.70p -6.99%
Serco Group (SRP) 92.90p -6.11%
Equiniti Group (EQN) 232.08p -6.04%
Hochschild Mining (HOC) 180.70p -5.14%
Hikma Pharmaceuticals (HIK) 1,437.00p -4.26%
Tullow Oil (TLW) 235.88p -3.72%
Babcock International Group (BAB) 789.80p -3.42%
RPC Group (RPC) 723.40p -3.31%
Elementis (ELM) 244.80p -3.16%