FTSE 250 movers: Petershill surges; Wood group slides
By Frank Prenesti
Date: Tuesday 26 Mar 2024
(Sharecast News) - FTSE 250 (MCX) 19,740.97 0.65%
Petershill Partners reported an adjusted profit after tax of $200m in its preliminary results on Monday, down from $273m year-on-year.
The FTSE 250 company said total income for 2023 amounted to $319m, down from $379m in 2022, with adjusted EBIT at $284m, compared to $336m a year earlier, maintaining an 89% margin.
Adjusted earnings per share were 17.6 cents, down from 23.7 cents a year earlier.
The board proposed a final dividend of 10.1 cents per share, resulting in a full-year dividend of 15 cents per share.
It was also considering a tender offer to repurchase up to $100m of the company's shares, with a decision set to be made by the end of April and subject to approval at the upcoming annual general meeting.
British beverages and energy drinks maker AG Barr beat its own guidance with a 16.1% jump in full-year profits in 2023 as it managed to outperform the wide soft drinks market.
The company, whose brands include Irn Bru, Rubicon and Boost, reported an adjusted pre-tax profit of £50.5m, up from £43.5m in 2022 and ahead of its own, recently upgraded guidance of £49.5m.
As expected, adjusted operating margins fell by 130 basis points to 12.3% reflecting the dilution from acquisitions of brands Boost energy drinks and MOMA oat milk during the year. The company said the production in-sourcing of Boost and Rio, also acquired last year, should help margins improve.
Revenues were up 8% on a like-for-like basis but, when including a full year contribution from the Boost portfolio, surged 25.9% to £400m, helped by strong revenue and volume growth across the soft drinks portfolio, with a standout performance from the Rubicon brand.
The wider UK soft drinks market increased in value by 8.3% during 2023 while volumes fell 2.9%, according to Circana data, as high levels of price inflation continued from 2022.
Chief executive Roger White commented: "With our business in a strong financial position, and our portfolio of differentiated brands poised for further growth, I have every confidence that our proven strategy, our results-driven teams and our well-invested asset base will continue to support long-term growth and value creation."
The board recommended a final dividend of 12.4p per share, taking the total payout for 2023 to 15.05p, up 14.9% on the previous year.
House broker Shore Capital said the results "make for pleasant reading [...] confirming an excellent strategic and financial performance". The broker lifted its forecasts for AG Barr for 2025 and 2026 by around 10%.
Shares in Wood Group slumped on Tuesday despite an upgrade to its current-year outlook, as the engineering company reported wider-than-expected losses and increased debt levels for 2023.
The company, which works in consulting and engineering across the energy and materials markets, said margin growth, improved pricing, plus $10m in benefits from its cost-cutting 'simplification' programme means that adjusted EBITDA growth will be at the "top end" of the mid-to-high single-digit target for 2024.
Iron ore pellet maker Ferrexpo said a court has prohibited the transfer of ownership and other shares-related corporate rights of the company's subsidiaries in Ukraine.
"It is understood that the restrictions are part of an ongoing series of legal proceedings against Kostyantin Zhevago relating to Bank Finance & Credit and are not related to the Ferrexpo Group," the miner said on Tuesday.
Goldman Sachs downgraded Dr Martens to 'sell' from 'neutral' on Tuesday and cut the price target to 87p from 93p.
"Given continued weakness in trading commentary from peers (VF Corp, WWW, GCO) we see a soft boots industry backdrop persisting into FY25, and a propensity to invest through the cycle driving margin pressure (GSe 8% below FY25E EBIT consensus)," it said.
Goldman noted that a key driver of Dr Martens' Dec-23 revenue downgrade to FY24 expectations was softness in the broader boots category - particularly in the US - impacting both wholesale revenues and retail like-for-like growth.
"Looking forward, we now expect this to continue into FY25, noting that boots peer Timberland believes that US inventory levels in Dec-23 remain higher than targets, with other footwear peers WWW and GCO outlining soft revenue guidance for CY24/FY25.
"Hence, we expect that a stabilisation in category trends (as seen in Google Trends data) may take some time, given that the next key wholesale stocking period is circa six months away (Sep-Q)."
Goldman said that unless there is a material change in demand for the boots category, which it will continue to monitor, it would expect wholesalers to have a relatively cautious approach to orders.
It also said that given the revenue declines now expected, and the investment required to grow the brand, it sees a risk that margins could remain under pressure from 2H24 into FY25.
The bank pointed to limited valuation upside versus history and relative to growth.
"We note while DOCs screens towards the bottom end of global footwear peer multiples, we believe this reflects the modest EPS growth outlook for the business, with faster growing businesses (VF/Crocs) trading at comparable or cheaper multiples," it said.
FTSE 250 - Risers
Petershill Partners (PHLL) 189.20p 9.62%
Barr (A.G.) (BAG) 555.00p 7.98%
TUI AG Reg Shs (DI) (TUI) 647.00p 6.33%
Close Brothers Group (CBG) 402.80p 5.78%
Softcat (SCT) 1,560.00p 4.98%
Trustpilot Group (TRST) 186.20p 4.20%
Direct Line Insurance Group (DLG) 193.00p 4.10%
Babcock International Group (BAB) 530.50p 3.21%
Wizz Air Holdings (WIZZ) 2,078.00p 3.08%
Playtech (PTEC) 469.00p 2.94%
FTSE 250 - Fallers
Wood Group (John) (WG.) 137.90p -6.95%
Ferrexpo (FXPO) 44.40p -4.72%
Mobico Group (MCG) 68.55p -3.31%
Dr. Martens (DOCS) 85.75p -2.56%
Me Group International (MEGP) 168.20p -1.98%
Foresight Solar Fund Limited (FSFL) 84.80p -1.74%
Ithaca Energy (ITH) 142.40p -1.52%
Diversified Energy Company (DEC) 863.00p -1.48%
W.A.G Payment Solutions (WPS) 69.80p -1.41%
Tyman (TYMN) 286.50p -1.38%
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