Just Eat shares were down five per cent this morning as the company took stock from being demoted from the FTSE 100 yesterday.
The food delivery company, which has come under siege in recent years from competitors Deliveroo and Uber Eats, dropped out of the top tier index as FTSE Russell announced the winners and losers of the stock market reshuffle at Wednesday’s close.
The relegation follows a difficult six months in which Just Eat’s share value fell by nearly 40 per cent from 883.4p in July to a November low of 533.8p, amid profit warnings after continued investment in updating its delivery services.
Just Eat was replaced by engineering firm Spirax-Sarco, which makes steam management systems.
AJ Bell analyst Russ Mould said the promotion was the mark of “a British engineering success story”.
Spirax has “a competitive edge in a niche area”, and gradually but consistent rising dividend has driven continued investment in the company, he added.
Meanwhile, Aston Martin followed through on expectations of breaking into the FTSE 250, even after its share price dropped following its float on the stock market earlier this year.
As expected, troubled outsourcer Kier Group, however, was relegated from the FTSE 250 to the FTSE Small Cap index, after a rights issue last week saw profits plummet.
The building company’s recent fortunes have matched that of the wider outsourcing sector, which has seen share prices fall amid the continued turmoil after Carillion’s collapse at the start of the year.
Royal Mail did not offer a surprise either, as it tumbled out of the top index into the FTSE 250, after its share price more than halved since its peak in May. It remains well below its 2013 initial public offering (IPO) price of 330p.
Just last week, communications watchdog Ofcom voice its concerns about the company’s long-term sustainability after Royal Mail admitted to a fall in deliveries and lower-than-planned efficiency.
Thomas Cook also got the chop from the second tier of the FTSE index, with shares nose diving more than 50 per cent after last week’s £30m profit warning. The beleaguered package holiday provider blamed its troubles on the summer heatwave hitting its main trading period.
But it was better news for Hiscox, winner of insurance company of the year at last month’s City A.M. awards, which benefitted from Royal Mail’s woes as it rose into the FTSE 100.
The insurer's share price has more than doubled in the past five years and has ridden out a difficult period for insurers, who have been hit by several expensive claims after a series of hurricanes and typhoons struck globally.