FTSE 250 movers: AO, Spirent surge; Ithaca slides as it goes ex-div
By Frank Prenesti
Date: Thursday 28 Mar 2024
(Sharecast News) - FTSE 250 (MCX) 19,876.51 0.33%
Electrical retailer AO World said on Thursday that FY24 adjusted pre-tax profit was set to be "at least" at the top end of the guided range of £28m to £33m.
In an update for the year to the end of March, the company said revenues were estimated to come in at around £1.04bn. It said the core business continues to trade positively through the fourth quarter, with AO.com returning to revenue growth as expected.
At the period end, the retailer expects to have net funds on a pre IFRS16 basis of more than £30m. AO said its £80m revolving credit facility has been extended with existing lenders to April 2027 on the same terms.
Founder and chief executive John Roberts said: "I'm pleased with the clear progress that we're making after pivoting our focus to profit and cash generation during the 2023 financial year. As we expected at our half year results, we returned to revenue growth in our core business during Q4 and, as a result, we're entering the new financial year with good momentum.
"With net funds on our balance sheet and a clear plan, we remain confident in our ability to deliver on our ambition for 10-20% revenue growth in the year ahead and medium-term profit guidance of 5% adjusted PBT margin."
At 1100 GMT, the shares were up 14.6% at 103p.
Russ Mould, investment director at AJ Bell, said: "Online white goods seller AO World's life as a public company has had more ups and downs than a rollercoaster and investors will hope today's ascent for the share price does not presage a rapid descent to come.
"Like many online-based retail businesses, AO was well-placed during lockdown but subsequently its fortunes took a turn for the worse. Having returned to a more sustainable path towards profit and cash flow in its financial year to the end of March 2023 the company has now confirmed revenue guidance for the current year and flagged profit at the top end of what was previously guided.
"For the year about to start, the group still hopes to see strong revenue growth and is sticking with its medium-term margin target.
"The basics of retail are fairly simple - have the right amount and the right kind of stock, sell it a price customers will stomach but which still allows you to make a decent profit, and make sure the customer experience is such that they will buy from you again. AO World seems to be getting more of this right and that's coming through in its financial performance."
Keysight Technologies has reached a deal to buy Spirent Communications for £1.16bn, outbidding US peer Viavi Solutions which had already agreed to take over the UK telecoms group earlier this month.
Spirent said on Thursday it is now recommending a 201.5p-per-share offer from Keysight, which represents a "superior proposition" for shareholders at a 26.5p or 15% premium to Viavi's offer on 5 March.
"Accordingly, the Spirent directors have unanimously withdrawn their recommendation of the Viavi offer and intend to adjourn the Viavi offer shareholder meetings," the company said in a statement.
The acquisition value comprises 199p in cash and a 2.5p special dividend for each Spirent share.
Spirent chair Bill Thomas said the board was "pleased to recommend" Keysight's offer. "Spirent is a business with many strengths, deep customer relationships and talented people. This offer provides our shareholders with even greater value in cash for their shares at an attractive premium while at the same time protecting the fundamental character of Spirent for all stakeholders," he said.
California-based Keysight, which makes electronics test and measurement equipment and software like network analysers and oscilloscopes, views Spirent's business as a "strong fit", according to its chief executive and president Satish Dhanasekaran.
"Both companies share a common focus on empowering and accelerating high-value solutions for customers. In Keysight, Spirent will join a platform of significant customer scale with the capacity to provide the necessary capital and resources to help Spirent grow and accelerate delivery of its strategic vision," Dhanasekaran said.
Keysight, listed on the NYSE with a market cap of $28bn, reported revenues of $5.46bn for its latest financial year, compared with Spirent which generated $474m.
Ithaca Energy, Moneysupermarket.com, Travis Perkins, Primary Health Properties and Hargreaves Lansdown were all lower after trading without entitlement to a dividend payment.
FTSE 250 - Risers
AO World (AO.) 102.60p 14.19%
Spirent Communications (SPT) 200.20p 11.84%
Hipgnosis Songs Fund Limited NPV (SONG) 67.80p 6.44%
Elementis (ELM) 149.00p 6.28%
TI Fluid Systems (TIFS) 150.00p 4.75%
Close Brothers Group (CBG) 418.00p 4.19%
Diversified Energy Company (DEC) 928.50p 4.03%
WH Smith (SMWH) 1,316.00p 3.95%
Moonpig Group (MOON) 168.90p 2.93%
Mobico Group (MCG) 68.65p 2.77%
FTSE 250 - Fallers
Ithaca Energy (ITH) 134.00p -7.97%
Carnival (CCL) 1,186.00p -4.08%
Moneysupermarket.com Group (MONY) 219.00p -3.78%
W.A.G Payment Solutions (WPS) 64.00p -2.74%
Auction Technology Group (ATG) 616.00p -2.69%
SDCL Energy Efficiency Income Trust (SEIT) 58.80p -2.00%
Future (FUTR) 611.00p -1.93%
Bank of Georgia Group (BGEO) 4,970.00p -1.78%
Energean (ENOG) 1,088.00p -1.63%
Balanced Commercial Property Trust Limited (BCPT) 82.70p -1.55%
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