FTSE 250 movers: All sunny for OnTheBeach; Gloomy days for house builders
The FTSE 250 was flat on Friday as traders headed off for the long weekend.
OnTheBeach got a lift after Berenberg upped its price target on the stock to 630p from 600p and reiterated its 'buy' rating following the company's in line trading statement and announced acquisition of Classic Collection Holidays.
It said the update was testament to both OTB’s differentiated model, which has seen it deliver strong earnings growth even against poor market backdrops and the company’s highly cash generative nature, which should allow it to continue making value-creative acquisitions over time.
It also noted that unlike other travel businesses, OTB does not take any inventory risk in that it never speculatively pre-buys hotel beds or flight seats. In addition, it has very low fixed costs, with a technology-led model and zero stores.
"As a result, in a weaker demand environment OTB: 1) is not burdened with distressed inventory being sold at a loss; 2) has low fixed overheads; and 3) sees its main cost, online marketing, automatically fall (as fewer consumer searches equals fewer paid clicks with Google).
"Backed by those advantages, OTB has consistently delivered strong earnings growth, even where revenue trends have been weaker."
Stobart Group shares rose as the company said it had appointed an interim finance chief and two directors as the infrastructure group seeks to rebuild its board after a bitter bust-up.
Michael Williamson will become interim chief financial officer on 10 September, replacing Richard Laycock who left the FTSE 250 company in July. Williamson, who had been standing in as CFO at Gama Aviation, will not join the board.
The owner of Southend airport has been looking to rebuild its board after a dispute in which former chief executive tried to depose chairman Iain Ferguson, triggering legal accusations from both sides. The dispute highlighted wider issues with Stobart’s governance.
Computacenter ticked higher as the IT infrastructure and services provider posted a 24.3% jump in first-half pre-tax profit as revenue exceeded £2bn, marking the first time this milestone has been reached in the first half.
Oil field services company Petrofac was also up as it said it was selling its interest in the North Sea's Greater Stella area to Ithaca Energy up to $292m.
House builders Bellway, Redrow and Bovis were all lower after the latest figures from UK Finance showed mortgage approvals fell in July. Mortgage approvals declined to 39,584 from 40,330 in June, versus consensus expectations for a rise to 40,700.
Meanwhile, gross mortgage lending was up around 7.6% on the year before to £24.6bn, while credit card spending was up 8.1% and personal deposits grew 1.2% in the last 12 months.
Samuel Tombs, chief economist at Pantheon Macroeconomics, said the renewed fall in mortgage approvals in July, to below their post-referendum average of 40.4k, demonstrates that the housing market still is fundamentally slowing.
"Approvals likely will languish at their current low level, given that the new buyer enquiries balance of the RICS Residential Market Survey remained close to zero in July. In addition, the number of people searching for 'mortgage' on Google - a good leading indicator of lending activity - was down 3.8% year-over-year in July. Meanwhile, the MPC’s decision to increase Bank Rate in August likely will hit lending volumes."
Market Movers
FTSE 250 (MCX) 20,686.54 0.10%
FTSE 250 - Risers
On The Beach Group (OTB) 496.50p 4.31%
Ferrexpo (FXPO) 158.25p 3.47%
Sophos Group (SOPH) 527.00p 3.23%
Stobart Group Ltd. (STOB) 244.00p 2.52%
Premier Oil (PMO) 125.60p 2.36%
Ted Baker (TED) 2,224.00p 2.21%
Kaz Minerals (KAZ) 459.30p 2.07%
Hiscox Limited (DI) (HSX) 1,693.00p 2.05%
Just Group (JUST) 93.60p 1.74%
OneSavings Bank (OSB) 423.10p 1.71%
FTSE 250 - Fallers
TalkTalk Telecom Group (TALK) 130.00p -2.99%
Greencore Group (GNC) 174.20p -2.93%
Redrow (RDW) 537.50p -2.36%
Hilton Food Group (HFG) 916.00p -2.35%
Bellway (BWY) 2,886.00p -2.24%
Crest Nicholson Holdings (CRST) 388.80p -2.21%
Bovis Homes Group (BVS) 1,116.00p -2.11%
UDG Healthcare Public Limited Company (UDG) 753.00p -2.08%
Fisher (James) & Sons (FSJ) 1,788.00p -1.87%
TBC Bank Group (TBCG) 1,628.00p -1.57%