M&S set for promotion back into Ftse-100 as it stages recovery

The news ends a four-year absence from Britain's main stock benchmark for the retailer

M&S shares have risen 78% this year as chief executive Stuart Machin leads a revival that was confirmed when the company unexpectedly raised its outlook last week. Picture: Gareth Fuller/PA

Marks & Spencer is set to regain its place in the Ftse-100 index, ending a four-year absence from Britain's main stock benchmark.

The retailer is one of four companies likely to be earmarked for inclusion in the gauge when index compiler Fftse Russell announces provisional changes after markets close,  according to calculations by Numis analyst Sam Murphy.

Others that stand to be promoted from the midcap Ftse-250 index are Hikma Pharmaceuticals, Dechra Pharmaceuticals, and specialty seals-maker Diploma, Mr Murphy said.

They are set to replace industrial conglomerate Johnson Matthey, asset manager Abrdn, , housebuilder Persimmon, and electronic-components maker RS Group. Final changes will be announced after European markets close on August 30. 

“These are moving all of the time, so nothing is set in stone,” said AJ Bell investment director Russ Mould. 

For M&S, regaining its Ftse-100 spot will represent the latest sign of the turnaround taking place at the UK retail bellwether. The shares have risen 78% this year as chief executive Stuart Machin leads a revival that was confirmed when the company unexpectedly raised its outlook last week.

Mr Machin’s progress is in contrast to the struggles of previous management teams, which led to the stock losing its Ftse-200 place for the first time in 2019.

Winning back its spot in the index would provide a further boost to the shares as so-called tracker funds would have to buy them in order to replicate the performance of the gauge.

For Diploma, promotion will mark the first time the 92-year-old company has gained entry to the blue-chip index.

Hikma and Dechra are both on the cusp of returning to the Ftse 100 after short absences, though Dechra’s time will likely be short-lived as the pet drug firm is being bought by private equity company EQT. 

For Persimmon, its exit from the gauge would mark the end of a decade-long stay, following a rough year which saw the company lose it’s crown as the UK’s largest listed homebuilder.

The changes will take effect at the open on September 18, according to Ftse Russell, which reviews index membership every quarter.

• Bloomberg