The AA raced up the FTSE 250 after analysts predicted that its cashflow would shift up a gear. Shares in the breakdown service rose by 10½p to 243½p after Barclays initiated coverage with an “outperform” rating. “Three years into its investment programme, 2017 results were the first sign that this is starting to bear fruit,” it told clients.
The bank noted that the decline in personal roadside memberships, which triggered concern in the wake of the AA’s float three years ago, has halted. “The new underwriting arm could reverse fortunes in the AA’s insurance business,” its analysts added.
The FTSE 100 endured a flat start to the day, advancing only 13.86 points to 7,404.08.
Reckitt Benckiser rose by 130p to £79.42 after confirming the sale of its food division, which includes brands such as French’s mustard and Frank’s Red Hot sauces, to McCormick & Company, the owner of Schwartz spices, for $4.2 billion (£3.2 billion).
Ashtead, the US-focused tool hire company, jumped 20p to £16.50¾ after announcing that Sunbelt Rentals, its American business, was buying Contractors Rental Supply for about $275 million.
Advertisement
At the other end of the FTSE 100, Royal Mail slid 11¼p to 400p after Investec reduced its target price from 550p to 520p.
A blanket ban on credit and debit card surcharges, starting in January, sparked concern over airlines and takeaway outlets. Easyjet and International Airlines Group faded by 32p to £13.81 and 12½p to 608¾p respectively. Just Eat dropped 45½p to 669½p.
The FTSE 250 gave up 17.48 points, or 0.09 per cent, to 19,595.9. Qinetiq, the science and engineering group, led the fallers after reporting a slowdown in orders. Its shares lost 24p to 250½p.
Strong numbers from the packaging company RPC Group pushed its share price up 28½p to 871¼p. Revenue in the first quarter was “well ahead” of last year, it said.