Broadcaster ITV and Carphone Warehouse are to be evicted from the FTSE 100 Index after the latest quarterly reshuffle, it was confirmed today.
The FTSE 100 Index Series Committee gave its final decision on the blue chips to be relegated to the second tier in the Footsie overhaul, which takes place later this month.
ITV and Carphone are among four firms that will be booted out, with the UK’s second biggest pubs group, Enterprise Inns and Ukrainian miner Ferrexpo also down for demotion to the FTSE 250.
ITV shares raced ahead by nearly 7% today on speculation of a renewed bid from Virgin Media after news that former ITV boss Charles Allen had joined the cable group.
But the rise came too late to help ITV retain its place in the Footsie.
The group’s relegation will also leave the number of media companies in the FTSE 100 at its lowest level for more than 10 years, according to research from accountants BDO Stoy Hayward.
Based on yesterday’s closing price, top tier firms Carphone Warehouse, ITV, Enterprise Inns and Ferrexpo lay outside the UK’s top 100 companies ranked by market capitalisation and therefore face ejection.
On the flip-side, FTSE 250 companies Inmarsat, which operates satellite equipment, software firm Autonomy and bus and trains group Stagecoach were inside the top 100 are therefore in line for promotion.
Fresnillo, which is the owner of the world’s largest silver mine in Mexico and listed in London in June, was also a top 100 firm and will gain a meteoric rise to the top flight.
The quarterly reshuffle changes will now be implemented from the end of trading on Friday September 19.
ITV’s demotion is a blow for boss Michael Grade, who returned to the broadcaster at the end of 2006 to lead a turnaround.
While ratings have crept up during his tenure, the worsening economy has taken its toll on the group’s all-important advertising revenue.
The firm, which has been a FTSE 100 member since being created from the merger of Granada and Carlton in 2004, recently said it expected market revenues to be 8% down during the second half of this year compared to 2007. ITV’s share price has more than halved over the past year.
And when it is kicked out of the premier tier, only 5% of the FTSE 100 will be media companies, with other companies in the sector having recently been evicted including Yell Group and Daily Mail & General Trust.
Only a handful of media companies would remain, including British Sky Broadcasting and marketing and communications giant WPP.
Carphone Warehouse, which is the UK’s third largest broadband provider behind BT and Virgin Media, has meanwhile seen broadband business slow in tandem with the housing market. The firm’s share price has nearly halved since it entered the top flight in September last year.
And pubs group Enterprise Inns has suffered a series of blows along with other members of the industry, including from a consumer spending slowdown, alcohol duty hikes and a smoking ban. Its share price has also more than halved over the past year.
By contrast, Perth-based transport firm Stagecoach, which operates rail firms South West Trains and East Midlands Trains, has seen an upswing in fortunes as more passengers leave cars at home and opt for public transport.
The quarterly Footsie rejig will see a number of FTSE 250 firms lose their place in the FTSE 350, with construction group Morgan Sindall and tool hire group Speedy Hire among those to be relegated to the FTSE SmallCap.