Marks & Spencer tipped to drop out of FTSE 100 amid high street troubles
Marks & Spencer is poised to drop out of the FTSE 100 later this week in a market reshuffle that sheds light on the troubled retailer’s tumbling share price.
One of 28 original constituents still in the FTSE 100, M&S is expected to be relegated to the FTSE 250 on Tuesday following a sharp drop in the value of its stock after several tough years of trading on the high street.
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Centrica and Direct Line are also among the FTSE 100 companies that could be relegated, while Polymetal, Hikma and Meggitt are all tipped for automatic promotion.
The end of M&S’s long-held membership as a blue-chip stock comes after a deterioration in the firm’s share price, which has plunged by more than half to 192p over the last five years.
The retailer, which is battling fierce online competition and rising costs, has embarked on an overhaul of the business that involves a store closure plan to reduce its physical footprint.
“Marks & Spencer’s modest £3.5bn stock market valuation means it looks doomed to automatic relegation and that would end the retailer’s membership of the index, which dates right back to the launch of the FTSE 100 in 1984,” said Russ Mould, AJ Bell investment director.
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He added: “The management team of Archie Norman and Steve Rowe continue to insist that the company is changing quickly and the all of the right pieces are in now in place to halt and then reverse a steady erosion of the company’s annual profits since 2011 (or even 2007 when pre-tax profit reached £1.1 billion).”