FTSE 250 movers: Royal Mail tumbles, Direct Line climbs

London’s FTSE 250 was down by 0.83% at 20,304.86 in afternoon trade on Thursday, with Royal Mail dragging the index lower.

Shares in the mail carrier tanked after the company said its transformation programme was behind schedule, cut its interim dividend and warned of a “challenging” outlook for the letters business in the UK.

IG analyst Chris Beauchamp said: “On the surface, the performance for the first half was actually fairly good, with revenue up and operating profit jumping to £61m from last year’s loss, but a host of problems and a need for further investment points towards a tough outlook, one not helped by an ongoing standoff between unions and management.”

NewriverREIT was also in the red after swinging to a loss following a drop in the fair value of its portfolio.

Industrial flow control equipment maker Rotork retreated after saying it expects to deliver “moderately lower” sales year-on-year in 2019 on an organic constant currency basis.

Pub owner Mitchells & Butlers fell after analysts at Morgan Stanley cut the stock from ‘overweight’ to ‘equal weight’, while B&M European Value Retail dropped as its stock went ex-dividend.

Up at the other end of the index, Direct Line climbed after the insurer pledged to slash annual costs by £50m through increased use of automation and self-service tools.

Shore Capital analysts said: “Direct Line continues to be our preferred option within the UK personal lines insurers. The ongoing pressures of pricing vs claims inflation in the UK motor market are not helpful but DLG is dealing with them better than most.”

Defence company Babcock jumped a day after it reported a jump in first-half pre-tax profit, while travel food and beverage retail specialist SSP recovered, the day after it slipped despite reporting a jump in full-year profit,

Finally, IntegraFin and AJ Bell rose after Berenberg analysts being initiated the diversified financial duo at ‘buy’ and ‘hold’ respectively.

Market Movers

FTSE 250 (MCX) 20,304.86 -0.83%