FTSE 250 movers: Close Bros slides; Babcock up on global instability

FTSE 250 (MCX) 20,363.75 -0.31%
UK weapons maker Babcock reported a sharp jump in half-year profits and held annual guidance as geopolitical tensions increased demands from governments for military hardware.

The company on Wednesday posted pre-tax profit of £172m in the six months to September 30, up from £136m a year earlier. Operating profit rose to £183.8m from £144.2m, beating the company-compiled consensus of £161m

Babcock said around 90% of full-year expected revenue was under contract at the start of October.

"We commence the second half with good momentum and are confident of making further progress against our medium-term guidance: to deliver mid-single digit average annual revenue growth and achieve underlying operating margins of at least 8% and underlying operating cash conversion of at least 80%," the company said.

"Geopolitical instability is driving growth in defence budgets. However, the pace and extent of budget growth is insufficient to match the growth in demand for military spend, making Babcock's ability to affordably add value, essential."

The company also noted a commitment from the new UK Labour government to increasing defence spending to 2.5% of gross domestic product.

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Britain's financial regulator in consulting on an extension for motor finance companies to respond to consumer complaints about commission on car loans after a court ruling last month that could see billions paid out in compensation.

Three consumers won a landmark victory against Close Brothers and FirstRand Bank in the Court of Appeal, which ruled the lenders should repay "hidden" commissions plus interest as the fees had not been disclosed when the loan deals were signed.

Both lenders have said they will appeal to the Supreme Court and the Financial Conduct Authority said its proposed complaint extension would cover "at least the period until the court decides whether to grant permission to appeal".

It added that it would ask the Supreme Court to make a quick decision "given the potential impact of any judgment on the market and the consumers who rely on it".

"Motor finance firms are likely to receive a high volume of complaints in response to the recent Court of Appeal judgment," the FCA said on Wednesday.

"Any complaint extension would allow them time to consider how these might be efficiently and effectively handled. This would help prevent disorderly, inconsistent and inefficient outcomes for consumers making complaints, motor finance firms and the market."

The original proposals are expected to be published within two weeks and, if taken forward, would mean the complaint extension is in place by mid-December 2024.

"The Court of Appeal decided it was unlawful for the brokers (car dealers) to receive a commission from the lender providing motor finance without obtaining the customer's informed consent to the payment," the FCA said.

"This required the consumer to be told all material facts, including the amount of the commission and how it was to be calculated. The judgment related to fixed commission in motor finance agreements as well as discretionary commission arrangements (DCAs), which were banned by the FCA in 2021."

FTSE 250 - Risers

Babcock International Group (BAB) 521.00p 4.37%
Chrysalis Investments Limited NPV (CHRY) 93.10p 4.02%
TI Fluid Systems (TIFS) 170.40p 3.27%
Centamin (DI) (CEY) 144.80p 2.55%
SSP Group (SSPG) 155.90p 1.90%
Baillie Gifford US Growth Trust (USA) 249.00p 1.84%
Balfour Beatty (BBY) 433.80p 1.83%
Oxford Instruments (OXIG) 2,070.00p 1.72%
4Imprint Group (FOUR) 5,080.00p 1.70%
Ninety One (N91) 159.40p 1.66%

FTSE 250 - Fallers

Close Brothers Group (CBG) 185.30p -5.46%
Spectris (SXS) 2,488.00p -3.57%
Pagegroup (PAGE) 353.40p -3.44%
Essentra (ESNT) 150.40p -3.09%
Derwent London (DLN) 2,082.00p -2.89%
Aston Martin Lagonda Global Holdings (AML) 112.40p -2.85%
Paragon Banking Group (PAG) 697.50p -2.72%
PZ Cussons (PZC) 77.50p -2.64%
PPHE Hotel Group Ltd (PPH) 1,150.00p -2.54%
Genus (GNS) 1,768.00p -2.32%