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FTSE 250 movers: Ocado and Crest lead risers
London's mid-cap index was on the up on Monday, led by Ocado and Crest Nicholson.
Ocado's chief executive Tim Steiner was all over the weekend newspapers after last week's landmark deal with US grocery group Kroger and the shares were given a boost on Monday by BofA Merrill Lynch as analysts lifted their target price on the online grocer to 1,020p and reiterated their 'buy' recommendation. "By selling its online grocery solution, Ocado proved it developed a credible and profitable alternative to Amazon's threat," said Merrill. "With almost no competition, we see further potential for Ocado Smart Platform solution."
This was in contrast to the Inside the City investment column in the Sunday Times, however, which felt Ocado's big deal "may not deliver" and said it was "time to take profits". Elsewhere, it was noted that Ocado has moved into the top 100 largest companies in the FTSE 350 in market cap terms, overtaking Marks & Spencer among others.
After its profit warning last week, Crest Nicholson was rebuilding. Broker Shore Capital said the impact of cost pressures for Crest was a reduction in EPS and DPS of circa 12% across all forecast periods, which has been broadly equal to the drop in the share price.
"In hindsight, we see that the Crest share price had been discounting a negative event (reflected in a year of share price weakness) and we have long been concerned about the impact of weak pricing on sector profitability. Now that bad news has crystallised and believing the issues will spread to the whole sector, we can see no reason for so large a discount to the peer group," ShoreCap analysts said, lowering fair value to 505p from 540p and retaining its 'buy' stance.
Cranswick shares were lifted a day ahead of final results from the meat packing group. Broker Numis forecast sales growth of 17.5% to £1463m, ahead of the consensus forecast of £1447m, driven by new business wins.
Analysts at Numis anticipate the fall in pig price during the second half and ongoing operational efficiencies will have contributed to a 17 basis point improvement in adjusted operating margins to 6.28%, driving a 21% increase in adjusted PBT to £91.4m and 20% EPS growth to 144.5p versus the consensus 141.7p.
"We expect the focus of questions to be on the progress of its current investments, and in particular the new Continental Products site in Bury, Lancs and the new poultry operations in Suffolk. In addition, we expect there will be some discussion of the potential opportunities and threats being created by consolidation in UK grocery retail."
FTSE 250 - Risers
Ocado Group (OCDO) 873.80p 9.23%
Crest Nicholson Holdings (CRST) 443.60p 5.22%
Herald Investment Trust (HRI) 1,330.00p 3.91%
Ascential (ASCL) 424.40p 3.56%
Computacenter (CCC) 1,350.00p 3.37%
Cranswick (CWK) 3,154.00p 2.74%
Sirius Minerals (SXX) 33.82p 2.68%
Purecircle Limited (DI) (PURE) 351.00p 2.63%
Hochschild Mining (HOC) 218.90p 2.53%
Indivior (INDV) 469.60p 2.47%
FTSE 250 - Fallers
Sophos Group (SOPH) 575.00p -3.60%
Rank Group (RNK) 156.38p -3.23%
Thomas Cook Group (TCG) 125.00p -3.03%
Telecom Plus (TEP) 1,036.00p -3.00%
Capita (CPI) 136.65p -2.67%
Babcock International Group (BAB) 753.40p -2.46%
Daejan Holdings (DJAN) 6,000.00p -2.12%
McCarthy & Stone (MCS) 131.80p -2.01%
Petrofac Ltd. (PFC) 589.00p -2.00%
Softcat (SCT) 658.00p -1.79%