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Royal Mail’s owner, International Distributions Services (IDS), experienced a boost in share prices today following a breakthrough in the company’s long-standing industrial dispute. The FTSE 250-listed stock rose to 243.4p, settling 5% higher, after threatening the 250p threshold for the first time since November.
The boost in IDS shares came after a preliminary agreement was reached with the Communication Workers Union over new pay and employment conditions, pending approval from the union’s leadership and membership. However, details of the proposed deal have yet to be disclosed. Despite this, Liberum analyst Gerald Khoo remains cautious, maintaining his “sell” recommendation and 135p target price due to the high execution and implementation risk.
Elsewhere, the FTSE 250 index rose 0.6% or 108.49 points to 19,351.18 thanks to strong mid-cap performances from IDS, Wood Group, and Network International.
Defence technology group Qinetiq saw a 4% increase in shares to 367.4p following a record high of more than £1.7 billion in order intake for the year to 31 March. The Hampshire-based company reported an “impressive” fourth-quarter performance that left annual results ahead of its previous guidance and at the upper range of City forecasts.
The FTSE 100 index also experienced gains, rising 33.79 points to stand at its highest level since early March at 7905.70. Supermarket giant Tesco saw a rise in share prices, up 4p to 272.2p, following a target price raise to 300p from analysts at UBS after last week’s results. Electronics components supplier RS Group also experienced a boost, with its shares leading the risers board at a gain of 19.6p to 868.6p due to a City upgrade.
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