FTSE 250 record high Morgan Sindall RS Group ASOS, Digi Mart USA News (London, United Kingdom): The FTSE 250 reached a record high above 25,000 on Friday, helped by strong moves in Morgan Sindall Group, RS Group and ASOS, before a hawkish interest rate decision dampened the mid-cap mood.
The index peaked at 25,176 in early dealings but faded to as low as 25,043 after some members of the Bank of England’s nine-strong monetary policy committee signaled that another rate hike may soon be needed. The Bank raised its base rate by 0.25% to 4% today.
Peel Hunt said markets currently price in a 51% chance of a further hike in December. The debate among economists is whether the next increase comes next month or in February, with the course of the war in the Middle East and its impact on energy prices a key factor.
Morgan Sindall led the risers for much of the session after the construction, fit-out and partnerships housebuilder extended its run of profit upgrades to at least 14 in the past decade. Shares rose 262p to 4,402p as the company said profits would be slightly ahead of management expectations and announced a £75 million share buyback.
The shares have underperformed the subsector, with a year-to-date fall of 11% through the previous evening and a 25% drop since the February record high of 5,530p. The company trades on about 12.3 times Peel Hunt’s forecast 2027 earnings, even as strong trading in its fit-out and construction arms offsets challenging conditions in partnership housing.
RS Group, formerly known as Electrocomponents, traded above 800p for the first time in two years after shares rallied 42p on interim results that came in ahead of expectations, aided partly by easier comparatives. The distributor of 875,000 industrial and specialist products from more than 2,500 suppliers reported like-for-like revenue growth of 7%, an improved margin of 9.2% and 17% growth in adjusted profit to £133 million.
The interim dividend rose 2% to 8.9p a share.
Chief executive Simon Pryce said manufacturing sentiment remained positive and that customer-facing investments contributed to momentum in all three trading regions. He reiterated medium-term targets of revenue growth at twice the market rate, mid-teen adjusted operating margins, cash conversion above 80% and return on capital employed above 20%.
“Our first-half outperformance reflects the exciting opportunities ahead,” he said. Berenberg recently raised its price target to 900p, noting continued expansion in lead indicators such as industrial production and purchasing managers’ indices.
Online fashion retailer ASOS traded as much as 6% higher at 449p after full-year results showed adjusted earnings rose 29% to the upper end of guidance, at £170 million, supported by a 340-basis-point improvement in gross margin to 50.5%. Gross merchandise value returned to growth in the fourth quarter for the first time since 2022 and was broadly flat in the opening weeks of the new financial year, despite the impact of a recent cyber incident.
Chief executive José Antonio Ramos Calamonte said the company was encouraged by its progress and expected fiscal 2027 to mark its first full year of growth since completing the transformation of its business model. The shares, which have traded this year between April’s 206p and September’s 508p, later drifted back to 418p.
Berenberg kept its price target at 750p, while Shore Capital continues to see 23% upside to 520p, citing significant balance sheet progress that has materially reduced liquidity and refinancing concerns.
