Retirement housebuilder McCarthy & Stone PLC (LON:MCS) looks set to fall out of the FTSE 250 after the results of the next FTSE quarterly reshuffle is confirmed on Wednesday.
Shares in McCarthy & Stone fell to the lowest levels since the company floated on the London stock market in 2015 after announcing a profit warning and the resignation of chief executive Clive Fenton in June.
READ: McCarthy & Stone's chief executive, Clive Fenton, off to his retirement home after profit warning
Since then, shares have recovered slightly but the company has lost a third of its value in the past year.
The group’s troubles stem from a slowdown in reservation rates amid uncertainty caused by Brexit and weaker property prices. The company also expects to take a hit from the government’s decision to force developers to cut controversial ground rents to zero for new homes.
Investors are now waiting to hear who will take Fenton’s place as chief executive to help lead a turnaround of the business.
The FTSE Russell, which operates the FTSE indices, said McCarthy & Stone is eligible for demotion to the FTSE Small Cap Index based on Friday’s closing price.
Other FTSE 250 constituents facing the chop
Other companies facing the chop from the FTSE 250 include waste management firm Renewi PLC (LON:RWI), property investor RDI REIT PLC (LON:RDI) and software group Alfa Financial Software Holdings (LON:ALFA).
New entrants to the FTSE 250 could include cybersecurity firm Avast PLC (LON:AVST), online trading group Plus500 (LON:PLUS), petroleum company Vivo Energy PLC (LON:VVO) and newly-listed loans provider Amigo Holdings PLC (LON:AMGO).
No changes to FTSE expected
The FTSE 100 is expected to remain unchanged.
“The absence of any promotions or relegations from the FTSE 100 paints a picture of a relatively peaceful summer on the markets, since the index was last reviewed in June,” said Laith Khalaf, senior analyst at Hargreaves Lansdown.
“There are some high profile names which are low hanging fruit in the blue chip index though. Rightmove, Royal Mail and M&S aren’t in the automatic drop zone as things stand, but are running the gauntlet of being pushed out of the FTSE 100 by companies breaking into the index. As it happens, this time around it looks like no contenders are going to challenge the position of these incumbents though.”
The outcome of the FTSE UK Index Series review will be confirmed on Wednesday, using Tuesday closing prices.