By Samuel Indyk
Investing.com – Cyber security firm Darktrace (LON:DARK) and chemicals firm Johnson Matthey (LON:JMAT) are the two latest companies to be kicked out of the FTSE 100 following the quarterly rebalancing. The two companies will be relegated to the FTSE 250 index.
Gaining promotion from the mid-cap index is Dechra Pharmaceuticals (LON:DPH) and Electrocomponents (LON:ECM).
Dechra has seen strong demand from the pandemic-led boom in pet ownership throughout the UK.
“With so many more people working from home, it’s been an ideal opportunity to settle in a new furry friend and Dechra is in the business of keeping them healthy throughout their lifetimes,” said Hargreaves Lansdown (LON:HRGV) Senior Investment and Market Analyst Susannah Streeter. “Demand for the pharmaceutical company’s veterinary products has been strong, with full year results showing pre-tax profits almost doubling.”
Electrocomponents makes industrial and electrical products and appears to have managed the global supply chain and labour market issues with relative success.
“The sparky performance by Electrocomponents, with adjusted pre-tax profits up 91% for the first half of the year, has led to a surge in its share price,” Streeter added. “Although there are likely to be further cost pressures ahead, Electrocomponents appears in a robust position, particularly given that demand for electrical parts shows little sign of waning.”
Relegation from the FTSE 250
Dropping out of the FTSE 250 altogether are AO World (LON:AO) and the Restaurant Group (LON:RTN).
Online electronics retailer AO World has seen its share price decline over 75% in 2021 as the pandemic induced increase in sales was not able to be sustained.
The Restaurant Group has shown signs of a recovery since the pandemic forced the UK restaurant industry to temporarily close down but the company’s airport concessions unit is still struggling to recover to pre-pandemic levels.
Petershill Partners (LON:PHLL) and Provident Financial (LON:PFG) will replace AO World and the Restaurant Group in the FTSE 250.