FTSE 350 quarterly reshuffle: ITV makes a comeback and online commerce triumphs

FTSE 350 quarterly reshuffle: ITV makes a comeback and online commerce triumphs

FTSE Russell, the global index provider, announced its latest quarterly review on 2 June 2021, which saw one change to the FTSE 100, and five changes to the FTSE 250.

Nine months after its fall into the FTSE 250, ITV has made its way back into the FTSE 100 in the latest reshuffle. As previously reported, ITV struggled with a fall in advertising revenue, cancellation of shows and disruption to filming production due to the pandemic. Q3 2020 saw ITV’s shares trading as low as £0.57, but the share price has since more than doubled. ITV reported a rebound its latest trading statement, with the roll out of the COVID-19 vaccine resulting in increased market confidence and a recovery to advertising spend (with an expected 85%-90% increase in advertising revenue in June 2021) and the return of productions such as Love Island and the Euros. 

Last quarter, with the announcement of its formal sale process (FSP) a day prior to the reshuffle, Renishaw was promoted to the FTSE 100 but it has not been able to sustain this momentum. Share prices have slipped back down to levels similar to those before the announcement of its FSP and after only three months, it has dropped back into the FTSE 250. The engineering company reported a strong balance sheet, with a 165% increase in pre-tax profit for the first three quarters of its financial year end (up to 31 March 2021) compared to the same period in 2020 and reinstated its dividend at £0.14 per share. Despite this, its FSP has failed to attract investors and it remains for sale. With the increased trend toward P2P transactions, Renishaw may have found itself a private equity suitor but Renishaw’s founders have made it clear that they will be unlikely to sell their 53% shareholding to a traditional private equity investor, declaring that they will be looking for a new owner ‘who will respect the unique heritage and culture of the business, its commitment to the local communities …and who will enable the Company to continue to prosper in the long-term’

The success of the digital commerce market during the pandemic has seen Moonpig, Trustpilot and Auction Technology (all of which were admitted to the Main Market in Q1 2021) promoted to the FTSE 250. 

Perhaps unsurprisingly, with a 60% market share in the UK amongst the online card sector, Moonpig announced its strongest trading week ever in the group’s history ahead of Valentine’s Day in its February 2021 trading update and reported that it expected revenue to approximately double in comparison to the previous financial year. Moonpig’s share price closed on 1 June 2021 (one day prior to the reshuffle announcement) 35.6% above its IPO price, giving a market capitalisation of £1.62bn. For more on this story, see Moonpig sets the bar high for 2021 IPOs.

Auction Technology, a marketplace operator for online auctions, reported strong performance for H1 2021, exceeding the board’s expectations with £34.5m in revenue, representing a 431% increase in revenue in comparison to H1 2020. Its share price has done well since the flotation price of £6.00, closing at £11.48 on 1 June 2021 (a 91% increase). Speaking of the success of the company, John-Paul Savant, CEO of Auction Technology, commented:

'ATG has been well-positioned amidst the uncertainties created by the pandemic, which has accelerated the auction industry's ongoing structural shift from offline to online. Investment in our technology, people and brand has made us the channel of choice for auctioneers and bidders in all of our respective verticals and geographies and enabled us to attract great talent, particularly in our engineering team.'

Spire Healthcare, one of the UK’s largest private hospital groups, announced a recommended cash offer by Australian provider Ramsay Health Care on 26 May 2021. The company’s shares have been on the rise since the offer was announced, increasing 27% between 25 May and 1 June 2021, closing at £2.45 per share. For more details on the takeover bid, see Foreign bidders snap up the FTSE Main Market.

Whilst a shift in consumer habits may have resulted in winners for the FTSE 250 promotions above, Provident Financial did not fare so well and has slipped into the FTSE 250. The group suffered from the COVID-19 pandemic, stating a £113.5m pre-tax loss in its annual report owed to changes in the group’s consumer demands for credit and an increase in unemployment rates. The shift in preferences and regulatory dynamics for consumer credit also resulted in Provident Financial withdrawing from doorstep lending after 140 years in the market.

The car insurance market was hit by reduced road travel and a lack of new drivers entering the market due to lockdown restrictions over the course of the year. Though Sabre Insurance reported robust financial results, with a pre-tax profit of £49.1m, it has been squeezed out of the FTSE 250. The company noted the lag in volume due to reduced car sales and new drivers entering the market and increased competition from competitors keeping pressure on prices.  

All changes will be implemented at the close of business on Friday, 18 June 2021 and take effect from the start of trading on Monday, 21 June 2021.

FTSE 100 entrants FTSE 100 exits
ITVRenishaw

FTSE 250 entrants FTSE 250 exits
Auction Technology Group  Foresight Solar Fund
Moonpig Group Sabre Insurance Group
Spire Healthcare Group  JLEN Environmental Assets Group 
Trustpilot Provident Financial 
Renishaw (down from FTSE 100) ITV (promoted to FTSE 100)

 

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