ASOS and British Land drop out of FTSE 100 and 250 as their shares fall

By

Nigel TAYLOR

Published
Jun 4, 2023

In a dramatic fall from financial grace, ASOS shares have been relegated from the UK’s mid-tier FTSE 250 index. The digital fashion retailer moves into the FTSE SmallCap index from 16 June, reflecting its major decline in fortunes in recent years. Just over two years ago, the company was valued at over £7 billion but is now worth closer to £420 million.

And as ASOS moves down a fiscal division, the latest shake-up of the London markets saw UK property giant British Land also relegated, this time from the FTSE 100 blue-chip index into the FTSE 250. The move sees the group, which operates the Meadowhall mall, ending its 21-year presence on the lead index. Its share price has dropped by 13% so far this year.

Meanwhile, a resurgent M&S has just missed out on a return to the FTSE 100. The share price now sits at 187.2p, a 15-month high, with analysts and commentators saying M&S might climb further to take it back into the UK lead index. Last month it reported buoyant sales and profit figures that showed its recovery is squarely on track.

While the index that a firm’s shares are listed on doesn’t have a direct impact on its business, being part of the prestigious FTSE 100 and FTSE 250 can have a positive effect.

A healthy share price reflects investors’ views of a firm’s ability to grow its profits in the future. A higher share price can also help with raising finance and creditors tend to look more positively on companies in the top indexes.

ASOS’s downward move comes after its shares fell to a 12-month low, down 35% in 2023. Its shares languished at 352.8p late Friday morning, albeit 3% up on Thursday’s close.

The firm’s continuing woes include supply chain issues, high product returns, increased competition and a cost-of-living crisis. Earlier this month it posted a first-half loss of £87.4 million.

The retailer is also paying high rates of interest on its newly agreed debt. In May It told investors it has entered into a £200 million senior term loan and a £75 million revolving facility.

British Land has also been hit by rising interest rates and the disruption caused by last autumn’s mini-budget. The shift towards home working has also had an impact on the commercial property sector. Last month, the business swung to an annual pre-tax loss of £1.04 billion versus a profit of £965 million a year earlier.