World Markets

G4S and Morrisons ejected from FTSE 100

Gill Plimmer
A G4S private security guard stands at the perimeter fence of the International Convention Center ahead of the Conservative party conference in Birmingham, England.
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The world's biggest security company, G4S, has been ejected from the FTSE 100 along with supermarket group Wm Morrisons, in the latest shake-up of the blue-chip index.

In a sign of the rise of alternatives to traditional banks, their replacements include Provident Financial, the doorstep lender, whose shares have risen 25 per cent since the last review, and Worldpay, the global payments processor, which floated in October.

G4S, which entered the FTSE 100 in 2007, has been given the boot as a result of a 13 per cent fall in its share price over the past quarter, in part because of a slowdown in growth in emerging markets.

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Ashley Almanza, G4S's chief executive, has been rebuilding the business, which is still suffering reputational damage in the UK for botched contracts. These included the electronic tagging scandal, in which the company overcharged the Ministry of Justice for monitoring offenders, including some who had died.

Morrisons' relegation comes after a difficult year for the supermarket chain, still the fourth biggest in Britain. It has struggled to fend off competition from discounters Aldi and Lidl, and price cutting by bigger rivals Asda, Sainsbury's and Tesco.

Both G4S and Morrisons will join the mid-cap FTSE 250 index on Friday. G4S's relegation follows that of rival outsourcer Serco, which was pushed into the FTSE 250 index almost two years ago.

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The FTSE 100 is calculated purely on valuation unlike the New York Stock Exchange, which selects large and well-known US companies from a balance of different industries.

Provident Financial has benefited from a period of rapid growth by offering loans and credit cards to riskier and credit-impaired borrowers, many of whom would be rejected by the big high-street banks.

More from the Financial Times:

G4S slides on balance sheet worries
G4S jumps on security rival boost
G4S looks to US for sales security

Worldpay floated last month in the UK's largest IPO this year. It has a market capitalisation of about £5.9bn, operates in 146 countries and has 400,000 customers worldwide.

Also among those joining the FTSE 100 is the little-known Irish support services company DCC, whose market cap has doubled in the past 10 months to about £5.2bn.

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DCC started life as a venture capital company but its operations range from running unmanned petrol stations across Europe, to manufacturing Body Shop body butters and Molton Brown lotions, as well as delivering the Xbox to more than 15,000 retailers including Argos, John Lewis and Amazon.

Its energy division accounts for more than 65 per cent of revenues after two big purchases including Esso's French petrol station network and Butagaz, Shell's LPG business in France.

Meggitt, the aerospace engineer whose shares have recovered only partly from a profit warning and subsequent 20 per cent fall at the end of October, has also been forced out.

Graham Spooner, investment analyst at The Share Centre, said the joiners and leavers this quarter "have more to do with the continually evolving nature of the FTSE than a particular trend".