Leisure group relegated from FTSE 100
Merlin Entertainments’ relegation from the FTSE 100 has been confirmed as the leisure group pays the price for a 33% fall in its share price from its summer peak.
In the quarterly review of companies in the index of largest stock market-listed companies, the owner of Alton Towers dropped into the FTSE 250, along with ConvaTec Group and Babcock International. They will be replaced by Just Eat, DS Smith and Halma.
Last night’s closing price of 356p represents a 34% fall from its summer peak, in a period when the FTSE 100 is down just 2%.
The share price values Merlin at £3.6bn – ranking it around 120th in the list of most valuable companies on the FTSE.
It is the result of poor trading performance leading to weakening investor confidence.
Last month its chief executive Nick Varney warned it had “experienced unprecedented levels of demand volatility in recent periods”.
However it slipped throughout the summer before plunging 16% when it blamed terrorism and bad weather for poor trading. Only a strong performance by its Legoland parks had kept its like-for-like growth positive.
The companies in the FTSE 100 are subject to quarterly reviews. To earn promotion, companies that are outside the FTSE 100 must have a value that places them in the top 90 companies.
The changes will take effect on Monday 18 December.
