FTSE 250 big movers: Greggs, Elementis, Synthomer, Coats, Travis Perkins

There are some significant share price moves today. City expert Graeme Evans rounds them up here and explains what’s going on and why.

Mid-cap results tested the foundations of July’s 8% rebound for the FTSE 250 index today as Travis Perkins (LSE:TPK) and polymers firm Synthomer (LSE:SYNT) were among stocks to fall sharply.

The FTSE 250 lost 1%, but there was cheer for investors of Greggs (LSE:GRG) and speciality chemicals firm Elementis (LSE:ELM) as their updates helped to consolidate recent share price improvements.

Greggs rose 46p to 2,124p and is up by 16% over the past fortnight after the food-on-the-go chain posted “encouraging” interim results, including sales ahead of pre-pandemic levels. It also absorbed the previously flagged headwinds of business rates reintroduction, a VAT increase and cost inflation to keep profits unchanged at £55.8 million.

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Its expectations for the rest of the year are untouched, with like-for-like sales in company-managed shops currently up 13.1% in the four weeks to 30 July as the company offsets inflation in the region of 9%.

Analysts at Jefferies have a price target of 3,250p, a level last seen for the shares at the start of this year. They said: “This is a robust update, with the strong like-for-like rate being carried into H2, price increases sticking, and inflation being managed successfully. We are encouraged to see forecasts being held and Greggs remains a top pick.”

The bank is also positive on Elementis after the maker of performance-driven additives highlighted the success of its recent pricing actions in offsetting “rapid” cost inflation.

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Interim results were ahead of expectations, with a strong performance in personal care and record figures in coatings helping pre-tax profits up 34% to $53 million (£43.4 million). Guidance for the full year was also towards the upper end of City expectations.

Shares jumped 7.7p to 117.2p, their highest level since early June, but still a long way short of the 146p seen in January. Jefferies has a price target of 140p, adding that it views an ongoing strategic review of the company's chromium business as a “key catalyst for aiding deleveraging and improving overall earnings quality”. Numis upped its target by 5p to 165p.

Synthomer, which was known as Yule Catto until 2012, endured a much tougher session as shares returned to their March 2020 pandemic low with a fall of 23.8p to 211.2p.

Underlying earnings of £173.1 million were significantly higher than both 2020 and 2019 levels, but that compared with the £322.7 million of the previous year when demand for nitrile rubber gloves surged during the pandemic.

Synthomer’s other units showed year-on-year growth but hopes of a return to normal levels of growth in the performance elastomers unit have been delayed because glove industry stock levels are still high. The lower earnings also mean the dividend of 4p for payment on 4 November has been reduced from 8.7p seen a year earlier.

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Shares in industrial threads business Coats Group (LSE:COA) have rebounded in recent sessions, but further progress failed to materialise despite an upgrade to full-year forecasts.

Chief executive Rajiv Sharma hailed an “outstanding” performance in the first six months of the year, which included progress in “accelerating profitable sales growth and transforming the portfolio to improve margins”. Adjusted operating profit of $125 million (£102.3 million) reflected margins up by 180 basis points to 15.6% and well above 2019 levels.

Shares fell 6% and were later 1.8p cheaper at 72.8p, although Jefferies has a target of 100p after noting the first half figures beat its forecasts by 10%.

Other stocks on the FTSE 250 fallers board included Travis Perkins, which dropped 85.8p to 944.2p as it said continued good demand in its Merchanting business had been offset by a softening DIY backdrop at its Toolstation arm.

Investment in new branches and significant increases in salary and utility costs contributed to Toolstation’s UK adjusted operating profit falling to £7 million. The overall group-wide figure of £163 million was flat on last year, but the company remains optimistic that it will deliver a full-year performance broadly in line with expectations.