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CATEGORY: RISERS AND FALLERS

FTSE 250 movers: IMI lifted by broker note; Domino's not so tasty as CFO departs

Tue 12 Jun 2018

LONDON (SHARECAST) - (Sharecast News) - London's FTSE 250 was down 0.3% to 21,263.03 in afternoon trade on Tuesday, with the US-North Korea agreement and UK jobs data in focus.
IMI advanced as Morgan Stanley upped the engineer to 'overweight' saying that the shares have de-rated too far and pointing to potential for a 20% gain.

The de-rating has mainly been driven by concerns on power generation, with fossil fuel accounting for 12% of group EBIT but recent work by the investment bank's analysts suggesting gas markets "could be close to trough".

IMI's service business "is attractive" with a 6% sales compound annual growth rate since 2008, with Critical engineering later-cycle than some UK peers, the capex in Process engineering "should be a tailwind in 2019" and valve pricing "also improving".

Domino's Pizza shares were looking pretty unappetising after the company said chief financial officer Rachel Osborne left the group on Monday.

Liberum analyst Wayne Brown said: "Why Domino's Pizza Group cannot hold onto their finance directors is a very good and valid question. Since the departure of Lee Ginsberg, who was a long-standing and highly recognised FD, the group has churned through three since 2015 and with the announcement today that Rachel Osborne has handed in her resignation effective 11 June 2018, the group are on to their fourth.

"We question whether there is an internal cultural issue, whether she cannot see a path to maximising her remuneration scheme or other issues? Whatever the answer is, it does not look good and begs corporate governance questions."

Huosebuilders were under the cosh after Crest Nicholson posted a drop in half-year pre-tax profit and warned that margins for the year would come in towards the lower end of its guidance range, squeezed by cost pressures.

Peers Redrow, Bovis Homes and Bellway all retreated.

Superdry was also on the back foot as RBC Capital Markets slashed the price target on the 'sector perform' stock to 1,400p from 1,900p.

"Despite significant year-to-date de-rating (and mid-single digit earnings cuts), we believe Superdry will continue to face challenges relating to channel cannibalisation, which is particularly apparent in its physical retail network. We do not believe modest operating margin gains are achievable in FY19E, and remain 4% below consensus on revised profit before tax estimates."

FTSE 250 - Risers

Renishaw (RSW) 5,710.00p 2.61%
Clarkson (CKN) 2,580.00p 2.58%
CLS Holdings (CLI) 236.50p 2.16%
Polypipe Group (PLP) 395.00p 2.07%
Ultra Electronics Holdings (ULE) 1,641.00p 1.80%
IMI (IMI) 1,195.00p 1.79%
Ascential (ASCL) 433.20p 1.69%
Intermediate Capital Group (ICP) 1,159.00p 1.58%
Purecircle Limited (DI) (PURE) 388.50p 1.57%
Bakkavor Group (BAKK) 199.00p 1.53%

FTSE 250 - Fallers

Alfa Financial Software Holdings (ALFA) 190.60p -7.02%
Domino's Pizza Group (DOM) 365.90p -5.04%
Crest Nicholson Holdings (CRST) 429.20p -3.81%
Redrow (RDW) 590.11p -3.58%
Centamin (DI) (CEY) 118.75p -3.38%
Weir Group (WEIR) 2,122.00p -3.33%
Superdry (SDRY) 1,229.00p -3.30%
Bovis Homes Group (BVS) 1,232.50p -3.22%
Ocado Group (OCDO) 1,078.00p -2.97%
Bellway (BWY) 3,321.00p -2.58%
 
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