FTSE 250 movers: WoS tanks after Rolex deal; Aston Martin accelerates

by | Aug 25, 2023

(Sharecast News) – Shares in Watches of Switzerland slumped by a fifth after news that Rolex had bought jeweller Bucherer AG.
The luxury watch seller tried to reassure investors concerns that the deal would not hit sales.

“There will be no change in the Rolex processes of product allocation or distribution developments as a consequence of this acquisition,” the company said.

Rolex announced the surprise move to buy Bucherer, one of the world’s biggest watch retailers yesterday.

“Investors seem to fear the tie-up will mean Bucherer gets preferential treatment including better access to the watches that consumers are desperate to buy,” Russ Mould, investment director at AJ Bell, said.

“Watches of Switzerland’s efforts to reassure the market that there will be no change in how Rolex allocates stock have fallen on deaf ears. This is what Rolex might have promised now, but that could easily change in the future.”

“It’s worth noting that Watches of Switzerland has been a favourite stock among many mid-cap fund managers. They will have to look hard at the Bucherer announcement and decide if it radically changes the investment case.”

Financial trading platform CMC Markets said annual net operating income would be lower than last year as revenues continued to fall in a “challenging” environment.

The company on Friday said subdued market conditions had continued through August with trading and investing net revenues trending 20% lower year-on-year. The news saw investors take flight as the stock plunged almost 8% in London trade.

“August in particular has seen a more challenging environment with markedly lower monetisation of client trading activity due to a higher proportion of lower margin institutional volume,” CMC said.

“Should year-to-date market conditions continue for the remainder of full-year 2024 then it is expected that net operating income will be between £250 and £280m,” it added, lower than the £288m reported last year.

The company said key indicators, including client money, assets under administration, and active clients across both the trading and investing businesses “remain robust with no material change seen through recent weeks”.

Operating cost guidance was left unchanged at £240m.

Aston Martin Lagonda rallied on Friday after Jefferies lifted its stance on the shares to ‘buy’ from ‘hold’ and hiked the price target to 420p from 300p.

The bank said it sees potential for the luxury car maker to build on the re-positioning started by Chairman Lawrence Stroll.

It said three capital raises in as many months have helped AML to deal with its balance sheet liquidity.

In addition, the operating outlook appears “more encouraging than ever”, with a focus on front-engine cars and average selling price upgrades.

Jefferies also said it sees room to grow volume and refinance debt, and that operating earnings are likely to improve gradually.

Market Movers

FTSE 250 (MCX) 18,189.13 -0.03%

FTSE 250 – Risers

Aston Martin Lagonda Global Holdings (AML) 339.80p 5.92%
Quilter (QLT) 82.30p 2.17%
SDCL Energy Efficiency Income Trust (SEIT) 75.60p 2.16%
Hays (HAS) 105.50p 2.13%
Tyman (TYMN) 290.50p 2.11%
FirstGroup (FGP) 143.60p 1.99%
Chemring Group (CHG) 291.00p 1.93%
3i Infrastructure (3IN) 299.00p 1.87%
Senior (SNR) 176.00p 1.73%
Me Group International (MEGP) 155.00p 1.57%

FTSE 250 – Fallers

Watches of Switzerland Group (WOSG) 548.00p -20.98%
CMC Markets (CMCX) 113.20p -7.21%
Coats Group (COA) 72.50p -3.33%
TUI AG Reg Shs (DI) (TUI) 470.80p -2.57%
WH Smith (SMWH) 1,421.00p -2.40%
easyJet (EZJ) 413.90p -2.38%
Ascential (ASCL) 192.20p -2.04%
Indivior (INDV) 1,737.00p -2.03%
Direct Line Insurance Group (DLG) 158.60p -2.01%
Synthomer (SYNT) 63.75p -2.00%

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