FTSE 100 reshuffle: Are Royal Mail and ITV in pole position for promotion?
Royal Mail and ITV look to be strong contenders for promotion to the index of the UK’s 100 biggest public companies during next month’s FTSE reshuffle.
ITV, which has been boosted by the return of ad revenue, is considered a strong outsider to inch back into the top flight, according to analysis from Hargreaves Lansdown.
Royal Mail, which has posted a string of positive results following a boom in online shopping, is considered the favourite for promotion.
“The FTSE reshuffle is set to be a be more of a waltz this time around, with the top flight expected to move only slightly, while there is some significant legwork going on with changes to the FTSE 250,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
Here’s a full list of contenders for promotion and relegation throughout the City’s premier leagues.
Royal Mail – prime contender for FTSE 100
Royal Mail has delivered a succession of bumper sales figures as it continues to capitalise on the e-commerce boom.
It is expected to post annual results tomorrow, showing a doubling of profits to £700m.
Momentum revved up as the group increased its capacity for parcel deliveries and the renaissance in letter writing was a bonus after declines last year.
The company is targeting a 12 per cent annual revenue growth over the next five years with only modest capital expenditure, a blueprint its domestic business can as yet only dream of emulating.
ITV – outsider for promotion to FTSE 100
ITV struggled with production problems for its pipeline of shows during the pandemic as it grappled with a tightening of advertising budgets.
Revenues plunged after its hit Love Island show was cancelled and episodes of popular soaps were scaled back.
However, marketing spend has ramped up again as vaccine rollouts fuel confidence among brands.
Investors have glimpsed the flicker of better times ahead and it has the potential to clamber back up to the top flight if momentum continues.
Renishaw – demotion to FTSE 250 looms
Renishaw made it into the FTSE 100 within a hair’s breadth after announcing its sale with impeccable timing for the last reshuffle.
Its blue-chip status has not helped it find a buyer and the company’s high price tag seemed to have put off potential suiters from clinching a deal.
Known for its precision engineering, Renishaw’s share price has been on the slide as the hunt for a new owner continues.
Its fall back into the FTSE 250 league is beginning to look like an inevitability.
Darktrace and Moonpig tipped for promotion to FTSE 250
Cyber security firm Darktrace is highly likely to creep into the FTSE 250 following its successful IPO which saw shares soar 40 per cent on listing.
Moonpig also looks set to fly into the division, after snuffing out a hefty valuation at its IPO launch.
Reviews operator Trust Pilot has also capitalised on the digital shift during the pandemic and launched on the London market as part of the IPO gold rush.
Its shares have broadly risen over the last month, giving it a market capitalisation of £1.25bn, and boosting its promotion prospects.
Provident Financial set for ejection from FTSE 250
The fortunes of Provident Financial have been on the slide and the company has now called time on its doorstep lending business.
It is all part of its bid to climb out of a financial black hole, but the downwards trajectory of its share price leaves the firm staring relegation in the face.
Jersey-based investment company Foresight could also lose its FTSE 250 status, having lost its shine amid a change in the direction of its portfolio.
Meanwhile 4imprint Group will also be looking over its shoulder after a tough year saw demand for its promotional products plummet during the pandemic.