FTSE 250 movers: Diploma and JD lead gains

Wed 30 Aug 2017

LONDON (SHARECAST) - (ShareCast News) - London's FTSE 250 rose 0.47% on Wednesday led by a mix of solid trading updates, broker upgrades and a solid day for European stock markets.
Diploma was the top riser on the UK mid-cap list, as its year-end trading update indicated that the technical products group is on track to hit full year targets.

The shares, which had retreated about 10% over the last three months, were given cause to catch up somewhat as management expected to deliver group revenue growth of around 17%.

Retail groups JD Sports and Ocado were boosted by positive comments from analysts.

Barclays reiterated its 'overweight' rating on sportswear pedlar JD ahead of results on 12 September. The stock rose 19.1% from initiation in March and a peak of 456p in late May before declining 32%, on a variety of investor concerns, including margin pressure from currencies, read-across from Foot Locker, Amazon's partnership with Nike and the company's 29 June trading statement.

"Overall, we recognize that some of these risks may be valid in the near term (e.g. margin pressure), but we think many are exaggerated (e.g. Foot Locker read-across) and we don't expect meaningful surprises on the downside.

"More importantly, our longer-term thesis remains intact: we believe JD Sports is positioned to grow well above the market, driven by an international store rollout, strong brand relationships, benefits of scale and positive structural trends in athleisure."

Ocado was driven higher by an initiation note at 'buy' from Citi, which was bullish on the company's automated warehouse solution and the quest to sell this service to supermarkets around the globe.

Citi, which initiated coverage with a 'buy' recommendation and set a 400p price target for the shares, felt there is latent demand in the grocery market as the channel shift in retail towards digital that is well under way in other subsectors.

The bank's base scenario is that Ocado will sign one new international client per year.

Fellow retailer Dunelm was down after announcing chief executive John Browett will be stepping down with immediate effect.

The group said it has made good progress over the last two years during Browett's tenure, but added that the next phase of growth would require "different leadership".

James Fisher was lower despite interims in-line with expectations with PBT up 6% with dividend raised 10%.

The key, for analysts at N+1Singer, is that the company is seeing some improvement in the offshore oil business and in particular in the Norwegian and downhole equipment business.

"We have stronger growth in H2 in our FY forecasts driven by phasing of projects in their renewable business and the uptick in oil/gas. We will not be changing forecasts today although there are some large project opportunities in defence and renewables which could be forecast moving."

Market Movers

FTSE 100 (UKX) 7,371.33 0.46%
FTSE 250 (MCX) 19,620.47 0.47%
techMARK (TASX) 3,389.03 0.79%

FTSE 250 - Risers

Diploma (DPLM) 1,091.00p 6.13%
JD Sports Fashion (JD.) 316.20p 4.25%
Ocado Group (OCDO) 303.20p 3.98%
Evraz (EVR) 315.20p 3.86%
Bodycote (BOY) 965.00p 3.71%
Unite Group (UTG) 690.00p 3.53%
Sirius Minerals (SXX) 27.45p 3.27%
Pets at Home Group (PETS) 180.40p 3.09%
Hunting (HTG) 394.10p 3.01%
Lancashire Holdings Limited (LRE) 689.00p 2.84%

FTSE 250 - Fallers

Acacia Mining (ACA) 205.10p -4.78%
IG Group Holdings (IGG) 637.50p -4.28%
Dunelm Group (DNLM) 575.50p -3.76%
Hikma Pharmaceuticals (HIK) 1,228.00p -3.53%
Carillion (CLLN) 45.70p -3.20%
CLS Holdings (CLI) 210.00p -3.00%
Petrofac Ltd. (PFC) 410.50p -3.00%
Nostrum Oil & Gas (NOG) 373.40p -2.51%
IP Group (IPO) 112.30p -2.43%
Sanne Group (SNN) 756.00p -2.39%
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