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FTSE claws back Italy losses but FirstGroup slumps

FTSE 100 continues to recover ground lost at the start of the week, but FirstGroup slumps to bottom of FTSE 250 as boss departs.

 
FTSE claws back Italy losses but FirstGroup slumps
 

The FTSE 100 has continued to claw back ground lost at the start of the week amid the sell-off sparked by Italy's political turmoil, but it was FirstGroup's (FGP) slump to the bottom of the FTSE 250 that grabbed attention.

The UK blue-chip index rose 20 points, or 0.3%, to 7,709, with Irish building materials firm CRH (CRH) leading the way, up 4.3% at £27.95 on news of plans to streamline its US and European businesses.

On the FTSE 250, FirstGroup slumped 14.5% to 94.7p as the rail and bus operator announced the departure of chief executive Tim O'Toole and lowered forecasts for the year. Full-year profits fell 4.8% to £197 million.

'If rail and buses business FirstGroup was looking for validation for its decision to rebuff a bid from US private equity firm Apollo then today's results do nothing to prove it,' said Russ Mould, investment director at AJ Bell.

'In fact, its erstwhile suitor may be thinking it dodged a bullet.'

Today's share price slump will deal a blow to those fund managers who have stuck by the stock. At the end of last month, First Group represented the top holding for Stephen Grant and Glen Nimmo, accounting for 5.4% of their £78 million S&W Revera UK Dynamic Fund.

Other high conviction backers include fellow Edinburgh fund group Aberforth Partners, with FirstGroup the top holding in both the £297 million Aberforth UK Small Companies fund and £1.3 billion Aberforth Smaller Companies (ASL ) investment trust.

Card Factory (CARDC) was another heavy faller, down 6.3% at 204.6p as the retailer reported a small fall in quarterly sales.

That will dent the portfolios of two of the company's biggest backers, Neil Woodford and Mark Barnett.

Barnett's employers Invesco own more than a quarter of the company's shares, with the bulk held in Barnett's Invesco Perpetual Income and High Income funds.

Woodford Investment Management holds 5% of the shares, with the highest conviction position in the Woodford Income Focus fund, representing 2.5% of the portfolio.

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