Interactive Investor

FTSE 250 shares round-up: train stocks and Moonpig among big losers

Politicians have caused problems for investors in a popular sector today, putting the UK’s mid-cap index under pressure. City writer Graeme Evans runs through the winners and losers.

25th April 2024 16:03

by Graeme Evans from interactive investor

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WH Smith (LSE:SMWH) and public transport operators were among today’s heavily sold mid-cap stocks as the strong recent run for the FTSE 250 index came to an abrupt halt.

This afternoon’s weak US GDP reading accelerated the sell-off to leave London’s second-tier benchmark 0.8% or 166.80 points lower at 19,552.57.

Labour’s plan to renationalise most passenger rail services in England within five years of winning a general election triggered jitters in the sector.

FirstGroup (LSE:FGP), which is the UK’s largest rail operator through the Avanti West Coast, Great Western Railway and South Western Railway contracts, fell 5.2p to 165.5p. The company also runs two open access rail services, as well as a fifth of local bus services outside London.

Trainline (LSE:TRN) shares reversed 38p to 305p, meaning the ticketing firm is back where it was prior to the start of a 26% jump for shares in early March.

National Express owner Mobico Group (LSE:MCG), which no longer runs UK rail services, fell 2.75p to 53.25p in a week when its delayed annual results showed adjusted profits down a third to £92.9 million.

Moonpig Group Ordinary Shares (LSE:MOON) shares topped the fallers board, sliding 24.2p to 153.4p after Bloomberg reported that a group of shareholders had reduced their stakes at a discount to last night’s price.

WH Smith also fell 70p to 1188p, despite slightly higher half-year profits being in line with expectations at £46 million. Travel trading profit rose by about £3 million to £50 million, with a 19% increase in the UK accompanied by strong store growth in North America.

An interim dividend of 11p a share is due to be paid on 1 August, with chief executive Carl Cowling confident that 2024 will be another year of significant progress.

He added: “The group is in its strongest-ever position as a global travel retailer. We have had a good first half and our businesses are well positioned for the peak summer trading period.”

Inchcape (LSE:INCH) led the FTSE 250 index, continuing the strong run for shares since its announcement this month that it had sold its UK retail arm to Group 1 for £346 million.

The disposal planned for the third quarter of this year will complete Inchcape’s strategic transformation into a capital light automotive distribution business, a move set to bring benefits as a cash generative and higher margin operation.

Today, the company reported a 5% rise in first-quarter revenues as it reiterated its outlook and said it expected growth to return to higher levels over the medium to long term.

The shares surged 66.5p to 785.5p but Peel Hunt sees further upside to 1,000p.

The City firm is also positive on PureTech Health (LSE:PRTC) after the biotherapeutics company said its progress continued into 2024 after a landmark year of operational and clinical progress.

It is about to return $100 million (£80 million) to shareholders, having generated significant proceeds from the Karuna schizophrenia treatment business it founded and which Bristol-Myers Squibb Co (NYSE:BMY) bought for $14 billion (£11 billion) last month.

From an initial investment of $18.5 million, PureTech generated $1.1 billion (£870 million) in cash from Karuna. The tender offer is priced at a significant premium to PureHealth’s share price, which today rose 2.5p to 215p to extend the improvement for this year to 14%.

Peel Hunt had a target price of 624p following today’s annual results, which showed a year-end cash position of $327 million (£261.9 million) before an increase to $574 million (£460 million) in March. The broker said: “PureTech continues to deliver, generating drug products and companies with a success rate about six times the industry average.

“PureTech is a conviction buy for us, with the market cap heavily discounted by the cash on the balance sheet.”

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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