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FTSE 250 movers: WH Smith and Merlin impress; RPC melts
Tatty-carpeted stationery and snacks retailer WH Smith shares topped the FTSE 250 leaderboard on Wednesday as the company impressed with stronger sales growth in the third quarter of its trading year, where like-for-like sales rose 1% compared to last year, reversing the 1% decline in the previous six months.
Outsourcer Serco got a boost after winning of a US health insurance eligibility support contract worth up to $900m.
Merlin Entertainments jumped higher after analysts returned from a group trip to the company's new Bear Grylls Adventure attraction in Birmingham for a seminar on new theme park brands, including the launch of Peppa Pig World of Play in five locations in China and the US by the end of 2019.
Barclays said: "We think the IP and concepts are well targeted to a modern and millennial audience that desires increasingly immersive, interactive, adventure or family-based experiences. With Peppa Pig and Bear Grylls, Merlin are also leveraging strong IP." Morgan Stanley, meanwhile, sees potential for more than 100 new sites and a 60% boost to Merlin's Midway attractions business in the long term, which would lift group operating earnings by circa 30%.
RPC Group continued to melt lower amid market worries about the crackdown on plastic waste and analyst suspicions about its numbers.
Despite a successful year turning plastic into dividends, with management trumpeting the "unprecedented" opportunities for growth in the market, analysts at Northern Trust Capital Markets highlighted adjusted profits slightly short of consensus, free cash flow that ''looks low" and organic growth "not flowing through into profits", with continued "questions about underlying growth".
Workspace fell despite reporting profit before tax more than doubled to £170.4m after "significant" increases in both trading profit and property valuation. The serviced office outfit said it saw strong growth in net rental income of 21% to £95.6m, resulting in 20% growth in adjusted trading profit after interest to £60.7m.
Train companies were again under pressure, with led by Stagecoach and FirstGroup this time after MPs launched an inquiry earlier in the week into the chaos on UK rail services and Liberum Capital cut its target price on Stagecoach to 145p from 185p but reaffirmed its 'hold' rating.
Hammerson and British Land were down as Credit Suisse downgraded the real estate investment trusts to 'underperform', with respective share price target cuts to 540p and 695p, though upgraded Shaftesbury to 'neutral' and lifted its target to 1,015p from 860p.
Market Movers
FTSE 100 (UKX) 7,699.06 0.16%
FTSE 250 (MCX) 21,154.21 0.49%
techMARK (TASX) 3,542.62 0.10%
FTSE 250 - Risers
WH Smith (SMWH) 2,101.90p 6.37%
Alfa Financial Software Holdings (ALFA) 170.56p 5.67%
Contour Global (GLO) 224.00p 4.67%
Euromoney Institutional Investor (ERM) 1,420.00p 4.41%
Serco Group (SRP) 100.40p 4.10%
Stobart Group Ltd. (STOB) 247.50p 3.99%
Merlin Entertainments (MERL) 381.60p 3.64%
Kaz Minerals (KAZ) 1,058.39p 3.31%
Travis Perkins (TPK) 1,468.00p 2.95%
JD Sports Fashion (JD.) 398.50p 2.84%
FTSE 250 - Fallers
RPC Group (RPC) 685.00p -11.50%
Workspace Group (WKP) 1,110.00p -4.72%
BTG (BTG) 560.00p -4.36%
Stagecoach Group (SGC) 137.60p -3.57%
esure Group (ESUR) 223.00p -1.68%
Provident Financial (PFG) 646.00p -1.52%
Clarkson (CKN) 2,685.00p -1.47%
Petrofac Ltd. (PFC) 576.40p -1.44%
FirstGroup (FGP) 91.10p -1.30%
NewRiver REIT (NRR) 290.50p -1.19%