MARKET REPORT: ITV loses the plot as it drops out of FTSE 100 after advertising slump sends share price into free fall
ITV will lose its place in London’s most prestigious stock market index after a slump in advertising this year sent its share price into free fall.
The Love Island and I’m A Celebrity broadcaster, which is also celebrating its 65th birthday, will be relegated from the FTSE 100 to the FTSE 250 in a reshuffle later this month after its stock closed down 6 per cent, or 3.66p, to 57.06p – valuing it at £2.3billion.
Shares have fallen by more than 62 per cent this year as cash-strapped companies have reined in their marketing budgets, slashing advertising and wiping out a huge chunk of ITV’s income stream.
ITV, which makes hit show I’m a Celebrity Get Me Out Of Here with presenters Ant and Dec (pictured), will be relegated from the FTSE 100 to the FTSE 250 in a reshuffle later this month
Adding more pressure, the pandemic has also disrupted the production of programmes.
The decision by FTSE Russell about which companies will be included in the FTSE 100 and 250 indices is based on closing share prices last night.
In ITV’s place, discount retailer B&M (up 0.5 per cent, or 2.2p, to 473.8p) will enter the blue-chip index after sales boomed during lockdown, according to analysis by AJ Bell based on SharePad data.
Beleaguered shopping centre-owner Hammerson (down 7.1 per cent, or 3.43p, to 45p) will slide out of the mid-cap index, as will bus operator Go-Ahead Group (up 0.7 per cent, or 4.5p, to 663.5p).
Stock Watch – Bluerock Diamonds
Mining minnow Bluerock Diamonds has found its fifth diamond worth more than $100,000 (£74,400).
The AIM-listed group mined the 12.12 carat stone at its Kareevlei site in the diamond-rich region of Kimberley, in the Northern Cape province of South Africa.
It reckons there will be more big diamonds on the way because of the type of rock it is now mining in.
Shares in the miner rose 3.1 per cent, or 1.5p, to 50p.
Hammerson’s rival shopping centre-owner British Land (down 4.1pc, or 15.1p, to 350.6p) could also be on the brink – but it is FTSE Russell data tonight that will confirm that either way.
But other companies such as trading platform CMC Markets (down 0.2 per cent, or 0.5p, to, 319.5p) and Mr Kipling-maker Premier Foods (up 1.2 per cent, or 1p, to 86p) will be cracking out the champagne, as they will be promoted from the small-caps.
Another company in the mood for celebrating last night was over-50s insurance and cruise operator Saga.
Investors cheered the news that former boss Roger De Haan will return to the company to steer it through the Covid crisis and oversee a £150million fundraising to help bolster its books.
De Haan, who was chief executive before the company was sold to private equity group Charterhouse in 2004, has promised to invest £100million out of the £150million it is seeking to raise.
Shares surged by 32 per cent, or 4.35p, to 17.96p on the double-whammy of good news.
The wider Footsie started the week on the back foot, falling 1.7 per cent, or 101.52 points, to 5862.05 points after the Bank Holiday weekend – despite notching up its best August since 2014.
The FTSE 250 fell 1 per cent, or 183.73 points, to 17604.6. Meanwhile, the blue chip Footsie index was held back by a rise in the value of the pound, which climbed above $1.34 for the first time since December.
The dollar has been lagging for several weeks, partly as traders bet that the US recovery from the pandemic will be slower than that of the global economy.
When the pound grows stronger it weighs on the dollar-denominated earnings of overseas multinational companies that are listed on the Footsie.
Elsewhere, data showed British factories have begun to claw back some of the ground lost during lockdown.
The manufacturing purchasing managers’ index in August rose when compared with July, with companies reporting demand has picked up from customers in the UK and overseas.
Shares in breakdown group the AA went into reverse – falling 5.8 per cent, or 2p, to 32.7p – after it was granted an extension for potential takeover offers until September 29 by regulators.
It has been approached by a clutch of private equity firms, including Warburg Pincus and Towerbrook Capital Partners, about a deal to take it private.