Share Prices & Company Research


02 March 2018

Royal Mail back in post

A red-letter day has been announced for Royal Mail as the organisation will re-join the FTSE 100 in the index’s March reshuffle.

The postal and courier service dropped out of the top-flight index and into the FTSE 250 last September after a fall in its letter deliveries, and an industrial dispute around its pension scheme. However, a deal was reached with the Communications Workers Union on proposals over pensions, pay and working conditions last month. Since floating on the London Stock Exchange to great fanfare in 2013, its share price has seen a number of ups and downs, reaching a low of 367.80p in November 2017 – but it has since rallied and closed at 550.00p on 1st March 2018.

However, the ongoing troubles faced by bricks-and-mortar retailers have hit property developer and investor Hammerson, as it has been relegated to the FTSE 250. This is despite its announcement in December of a £3.4bn merger with rival Intu Properties

The FTSE reshuffle announcement came during a week of bad news within retail, with Toys R Us and Maplins both going into administration on Wednesday 28th February. High street conditions remain tough, with retail sales coming sharply lower than expected during January, up 0.1% compared to estimates of 0.5% as shoppers tightened their belts in the New Year. Roy Kaitcer, investment manager, said: “British households have remained under pressure as inflation has outpaced wage growth.”

Entering the FTSE 250 in March is Bakkavor Group, following its London Stock Exchange debut in November 2017. Chief executive Agust Gudmundsson said the company, which supplies food to UK supermarkets, has had “an historic year” after reporting a 5.4% increase in like-for-like revenue, despite the costs of the initial public offering eating into its pre-tax profits.

Also joining the mid-cap index is the Baillie Gifford Japan Trust, which aims to gain long-term capital growth through investing in medium to smaller-sized Japanese companies; specialist mortgage bank Charter Court Financial Services Group; renewable energy company ContourGlobal; wargaming manufacturer Games Workshop Group; online holiday retailer On The Beach Group; and global private equity investor Pantheon International.

The AA Group, however, has lost its place in the FTSE 250, after the roadside assistance organisation failed to recover from an announcement it had cut its profit expectations in February. Chief executive Simon Breakwell said the group was putting money into new technologies and rolling out more breakdown vans. While the investment drive would reduce short-term profitability, Mr Breakwell said it was vital to the firm’s long-term success.  

Also exiting the mid-cap index are gold miner Acacia Mining, online fashion retailer Brown (N.) Group, funeral service provider Dignity, industrial property investment company Hansteen Holdings, facilities management and professional services company MITIE Group and pharmaceutical business Vectura Group.
Changes to the index come into effect on Monday 19th March 2018.

Please note, past performance and forecasts are not reliable indicators of future results or performance.
Please note that this article is for information only and does not constitute a recommendation to buy or sell the shares of the companies mentioned.
Royal Mail back in post
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