Interactive Investor

FTSE 250 welcomes cybersecurity firm and venture capitalist in

2nd September 2021 13:10

Graeme Evans from interactive investor

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Our equities expert rounds up the changes to the UK’s second index as the cards are shuffled once again.

Mid-cap investors have some new names to follow in the FTSE 250 index after recently listed Darktrace (LSE:DARK), Bridgepoint (LSE:BPT) and Baltic Classifieds Group (LSE:BCG) were added in the latest reshuffle.

There's also a second-tier debut for Draper Esprit (LSE:GROW), the venture capital firm well known to AIM followers following a 285% surge for shares since March 2020.

Mining engineer Weir (LSE:WEIR) drops down from the FTSE 100 after six months as a blue-chip company, while BlackRock Throgmorton Trust (LSE:THRG) and Endeavour Mining (TSE:EDV) are the other new names for investors to track when the changes come into force on 20 September.

The refreshed line-up, which is based on Tuesday's closing prices, will no longer include aerospace engineer Meggitt (LSE:MGGT) and supermarket Morrisons (LSE:MRW) after takeover developments put them on course for a brief stay in the FTSE 100.

Avon Protection (LSE:AVON), the maker of body armour and breathing apparatus, has paid the price for recent order disruption with the loss of its FTSE 250 status.

It had been one of the best-performing stocks of 2020, but the valuation has slumped to £570 million as recent profit warnings caused the shares to fall 60% from last December to 1,886p today.

The other stocks heading out of the FTSE 250 index are Tullow Oil (LSE:TLW), Civitas Social Housing (LSE:CSH), Temple Bar (LSE:TMPL) investment trust and Wickes Group (LSE:WIX), which has lost value since being spun out of Travis Perkins earlier this year.

The FTSE 250 index overall is up by 18% in 2021, comfortably outperforming the FTSE 100 thanks to recent takeover activity and strong contributions from the likes of Howden Joinery (LSE:HWDN) and digital publisher Future (LSE:FUTR).

Darktrace is among the highest profile new additions to the FTSE 250, having seen its shares more than double from their April opening price of 250p. Its valuation will be tested on 15 September when the Cambridge-based company publishes maiden annual results.

A recent trading update showed Darktrace ended the financial year with 5,600 customers, representing annual growth of 42% as demand for its self-learning AI solutions is boosted by a backdrop of increasingly sophisticated cyber-attacks.

The arrival of Bridgepoint improves the private equity exposure of the FTSE 250 index, with the European mid-market specialist now worth 40% more than when it made its stock market debut at a price of 350p and valuation of £2.9 billion.

Draper Esprit will also be closely watched thanks to investments that include New York's recently listed online car marketplace Cazoo (NYSE:CZOO) and the banking business Revolut.

There were 67 companies worth £984 million in the portfolio at the end of the last financial year, including many that were backed by Draper at the time of its 2016 flotation on AIM. That initial listing was worth £120 million, whereas the business is now valued at £1.7 billion.

Draper transferred to the main market in July, a move enabling pension funds and now index trackers to gain access to Draper's high-growth, privately owned technology companies.

One company many mid-cap investors might not know is Baltic Classifieds Group, which runs 12 online portals in Lithuania, Estonia and Latvia and attracts the equivalent of 11.5 visits per month for each person in the Baltics. Its shares made their debut in early July at 165p for a market valuation of £825 million, but are now at 244p.

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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