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FTSE 250 movers: Ocado soars on US tech deal; Hill & Smith under the cosh

By Michele Maatouk

Date: Thursday 17 May 2018

FTSE 250 movers: Ocado soars on US tech deal; Hill & Smith under the cosh

(Sharecast News) - London's FTSE 250 was up 0.8% to 20,995.41 in afternoon trade on Thursday amid a flurry a corporate news.
Ocado rocketed as it won a contract with US grocery giant Kroger to exclusively provide its online grocery expertise across multiple distribution warehouses across America, while Just Group racked up healthy gains after hailing a strong start to the year.

Cyber security firm Sophos rallied after saying that full-year billings rose 22% thanks to growth in its integrated cloud-based management platform, although pre-tax losses widened due to currency movements. In the year to the end of March 2018, billings rose to $768.6m from $632.1m in 2017, while revenue was up 21% to $640.7m and adjusted operating profit was 20% higher at $46.1m.

Retirement services company Just Group gained as it reported a jump in first-quarter sales thanks to a strong performance in defined benefit de-risking, while Cairn Energy gushed higher on the back of a rating upgrade from Goldman Sachs.

GVC Holdings was in the black, recovering from earlier losses after the government said it would cut the maximum stake on fixed-odds betting terminals (FOBTs) to £2.

George Salmon, equity analyst at Hargreaves Lansdown, said: "The change will impact profits at the big high street bookmakers, but the US Supreme Court's decision to open up the sports betting market over the pond means shares in the sector are still likely to end the week higher.

"The potential in the US is enormous. Around $150bn is already wagered on the underground market every year, and this will surely rise as barriers to betting are removed. For the UK bookies, the chance to tap into this huge potential could mean lost machine revenues are more than replaced. What's likely to follow is something of a land grab. First out of the blocks is Paddy Power Betfair, which is already in discussions about a new US partnership."

On the downside, Softcat was under the cosh as Jefferies cut the stock to 'hold' from 'buy' following recent share price strength. The bank noted the shares are up 37% year-to-date versus a flat FTSE 250 and 62% in the past 12 months, versus a 5% gain for the FTSE 250, making the valuation less attractive.

Hill & Smith was under pressure after saying that the stronger pound against the dollar meant that revenue at the start of the year fell versus the same period in 2017, while Thomas Cook retreated after posting a narrowing of first-half losses but saying that the UK remains a drag.

Budget airline Wizz Air flew lower even as Deutsche Bank initiated coverage of the stock at 'buy', calling it "an exciting opportunity".

"Management has demonstrated a cost base similar to Ryanair and margins are already better than easyJet," it said, adding that the company's route network is focused primarily on Central and Eastern Europe where it sees a significant opportunity to land grab markets.

Saga and Inchcape were weaker as their stock went ex-dividend.

FTSE 250 - Risers

Ocado Group (OCDO) 799.35p 44.81%
Sophos Group (SOPH) 590.00p 7.27%
Just Group (JUST) 148.60p 5.84%
Inmarsat (ISAT) 391.00p 4.10%
Capita (CPI) 132.00p 3.73%
Tullow Oil (TLW) 263.90p 3.69%
Cairn Energy (CNE) 260.00p 3.42%
GVC Holdings (GVC) 946.50p 3.39%
BCA Marketplace (BCA) 190.20p 3.37%
Hikma Pharmaceuticals (HIK) 1,457.00p 3.22%

FTSE 250 - Fallers

Petrofac Ltd. (PFC) 611.00p -5.86%
On The Beach Group (OTB) 492.50p -5.65%
Hill & Smith Holdings (HILS) 1,397.00p -4.97%
Softcat (SCT) 669.00p -4.29%
SSP Group (SSPG) 619.50p -4.25%
Saga (SAGA) 128.60p -4.17%
Thomas Cook Group (TCG) 141.10p -3.42%
Ferrexpo (FXPO) 231.70p -3.14%
Wizz Air Holdings (WIZZ) 3,073.00p -2.38%
Inchcape (INCH) 737.50p -2.12%

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