The FTSE 250 gained ground on Wednesday, led by the likes of JD Sports and Telecom Plus.
JD Sports was higher a day after it completed the acquisition of US chain The Finish Line, with UK rival Sports Direct revealing on Wednesday morning that it sold its Finish Line stake.
As JD executive chairman Peter Cowgill said a day earlier, the acquisition "marks a momentous step in JD's global expansion and represents an exciting opportunity to bring our market leading, multi-brand retail proposition to the world's largest athleisure market, both online and in stores". JD is entering the US market for the first time and the deal will be important in strengthening relationships with key US sportswear brand Nike.
Telecom Plus was up a day after its final results. Analysts at JP Morgan Cazenove reviewed the year of "modest, but steady, growth" with profits 1% above its estimates even though it was a lower rate of growth than in previous years.
"The gap between the cheapest energy tariffs available in the UK and the SVTs of the Big 6 energy providers, with which Telecom Plus's cost base is linked, continues to impact the price-competitiveness of the company's bundled product. In our opinion, Telecom Plus has done what it can in this unfavourable environment, receiving independent recognition for the quality of its customer service, reducing member churn, and broadening its portfolio of services." Until there is some clarity on the proposed energy price cap, analysts said "it is hard to see the shares
re-rating" though the 1,200p price target was still suggesting some upside for investors.
Sirius Minerals shares were given a boost as the company signed a binding offtake agreement to supply its polyhalite fertiliser to a Dubai-based trading group, ITL Trading, that specialises in supplying Nigeria and West Africa. The supply agreement is a seven-year agreement from first production, for volumes of POLY4 increasing to 350,000 tonnes per annum in year four and provides for exclusive marketing rights into Nigeria.
House broker Shore Capital observed that Sirius had been looking for around 2Mtpa of incremental agreements this year, of which the ITL agreement represents 17.5% of that. "Another three or four similar-sized deals would take Sirius into the 6-7Mtpa target range to support the Stage 2 debt financing (for which Sirius hopes to obtain initial lender commitments in mid-2018, towards execution in late 2018)."
Among the fallers, McCarthy & Stone was hurting as several brokers updated with their opinions on the stock a day after the retirement housebuilder's profit warning.
An droll take was from Jefferies, alongside downgrading its rating and slashing its price target to 116p from 267p. Analysts noted that McCarthy's business took a hit from the Brexit vote in 2016 and was still feeling the aftershocks almost two years later. "The older generation voted to leave and the younger generation to remain. Silver Surfers 1, Digital Natives Nil. However, whilst First Time Buyers are still keen to climb up the housing ladder, it seems that Last Time Buyers are now less likely to want to climb down. Perhaps that first goal should with hindsight be disallowed."
Capita, having gained 21% since the start of the month, was down on Wednesday. It cannot have been helped by a note from analysts at Deutsche Bank, who said their long run view was that the outsourcing group "remains a relatively disparate collection of businesses with limited revenue synergies. We don't believe the company will be successful in becoming a digitally enabled BPO business. Any upside will have to come from disposals and breaking the business up not from organic growth, in our view."
FTSE 100 (UKX) 7,643.60 0.52%
FTSE 250 (MCX) 20,944.76 0.52%
FTSE 250 - Risers
JD Sports Fashion (JD.) 430.30p 5.91%
Contour Global (GLO) 226.00p 4.63%
Premier Oil (PMO) 113.20p 4.43%
Wizz Air Holdings (WIZZ) 3,783.00p 3.45%
Telecom Plus (TEP) 1,078.00p 3.06%
Coats Group (COA) 79.00p 3.00%
Polymetal International (POLY) 660.40p 2.96%
Euromoney Institutional Investor (ERM) 1,402.00p 2.79%
SSP Group (SSPG) 666.50p 2.70%
Sophos Group (SOPH) 596.50p 2.32%
FTSE 250 - Fallers
Alfa Financial Software Holdings (ALFA) 180.98p -3.53%
McCarthy & Stone (MCS) 104.90p -3.05%
Safestore Holdings (SAFE) 532.92p -2.66%
Dixons Carphone (DC.) 192.05p -2.51%
Capita (CPI) 160.90p -1.86%
Bellway (BWY) 3,172.00p -1.67%
Dairy Crest Group (DCG) 488.60p -1.49%
Galliford Try (GFRD) 947.00p -1.15%
Ultra Electronics Holdings (ULE) 1,652.00p -1.08%
Serco Group (SRP) 95.15p -1.04%