FTSE 250 movers: Oilers burn lower, Mitchells & Butlers bubbles up
London's FTSE 250 was down 1.40% at 19,037.18 in afternoon trade on Thursday, as oil companies dragged the index down.
Oilers Premier Oil and Tullow Oil, along with oilfield services providers Wood Group and Hunting, were all moving lower as oil prices fell back following data released the day before which showed US oil output rose last week, even as concerns intensified over the US-China trade war.
Royal Mail suffered heavy losses, a day after the company said it was cutting its dividend by 10p to 15p from next year to help fund the next phase of its turnaround process, while Babcock was under the cosh for the second day in a row following its results on Wednesday, as Stifel downgraded its stance on the stock to ‘hold’.
"Market positions are strong, barriers to entry are high. But investor sentiment has been bruised by recurring disappointments with management not yet showing that they had command of their brief, to be seen in hitting or bettering guidance. The share’s valuation is undemanding, and becoming increasingly so, trading on a 2020 price ratio of 6 times earnings [...] But at this juncture we see few positive catalysts to drive a re-rating of the share," said Stifel analysts.
On the upside, Mitchells & Butlers advanced as a snow-free winter helped the pub and restaurant operator post a return to profit growth in the first half, although it did warn of “limited visibility” ahead due to Brexit uncertainty.
Serco surged as the outsourcer announced the acquisition of Alion’s Naval Systems Business Unit (NSBU), which supplies ship and submarine engineering services to the US Navy, for $225m.
Russ Mould, investment director at AJ Bell, said: "It has been a long time since Serco was in the market’s good books and today’s acquisition of a US defence business certainly reminds investors that the once-giant outsourcing business is still alive. Chief executive Rupert Soames should be very pleased with how the deal has gone down as he’s been working hard for the past five years to fix the business."
Merlin Entertainments was in the green as the Madame Tussauds owner rejected a call by one of its biggest shareholders to find a buyer to take it private, while defence technology company Qinetiq rallied as its full-year underlying pre-tax profit of £124m came in ahead of expectations of £115.1m.
Pets at Home climbed after analysts at HSBC upped their target price on the pet supplies retailer from 160p to 190p after the group's full-year results on Wednesday confirmed the successful completion of its turnaround strategy in retail and some good progress in its vet business.
Finally, automotive retailer Inchcape rose after reporting that revenues grew 3% in the first four months of the year, driven by solid performances in Asia and Europe, while fresh food maker Bakkavor crept upwards after it maintained full year guidance despite continued subdued consumer confidence and inflationary pressures.
FTSE 250 (MCX) 19,037.18 -1.40%
FTSE 250 - Risers
Mitchells & Butlers (MAB) 265.00p 9.28%
Serco Group (SRP) 130.30p 7.60%
Merlin Entertainments (MERL) 354.90p 6.74%
QinetiQ Group (QQ.) 311.80p 5.05%
Indivior (INDV) 49.18p 4.95%
Sirius Minerals (SXX) 15.50p 3.33%
Pets at Home Group (PETS) 173.90p 3.20%
Inchcape (INCH) 571.50p 2.51%
Bakkavor Group (BAKK) 124.80p 2.46%
Acacia Mining (ACA) 158.40p 2.26%
FTSE 250 - Fallers
Premier Oil (PMO) 84.42p -11.06%
Royal Mail (RMG) 198.70p -10.50%
Galliford Try (GFRD) 520.32p -7.17%
Tullow Oil (TLW) 211.50p -6.33%
Amigo Holdings (AMGO) 208.50p -5.66%
Saga (SAGA) 49.52p -5.59%
B&M European Value Retail S.A. (DI) (BME) 359.00p -5.53%
Stobart Group Ltd. (STOB) 107.00p -5.31%
Wood Group (John) (WG.) 417.90p -4.98%
Hunting (HTG) 535.00p -4.80%