FTSE 250 movers: Inchcape motors; Moonpig slumps
Shares in Inchcape surged on Thursday as the car dealer reiterated its annual outlook after a 5% rise in first-quarter revenues.
Sales for the first three months of the year came in at £2.3bn, with growth led by Europe and Africa, which outperformed as it unwound orders. Shares in the company were up almost 10% in London on the news.
The company recently said it was shifting its focus to distribution with the sale of its UK retail operations for £346m to Group Automotive of the US.
Inchcape said growth would return to higher levels over the medium to long term, with moderated growth expected in 2024. Key markets in the Americas were stabilising, while there was “strong momentum” in Asia-Pacific.
“Our positive start to 2024 reflects the underlying quality of our business and we have confidence in, and we have reiterated, our outlook for the year," said chief executive Duncan Tait.
“We recently announced an agreement to divest our UK Retail business. This transaction will complete our strategic transformation into a pureplay distribution business which is capital light, highly cash generative, higher margin and globally diversified.”
He added: “With our global market leadership position, digital and data capabilities to support our OEM partners, our Distribution platform is well positioned for the future, and we remain confident about the medium to long-term outlook for the group.”
Building products supplier Travis Perkins said first quarter revenue fell 3.7% as weak demand in the construction sector continued to impact trading.
The company on Thursday said it general merchant business continued to gain market share but, with trading volumes remaining subdued, sales across its merchanting segment were down by 4.4% in the three months to March 31.
Revenues at its Toolstation UK chain fell 0.9% due to weak demand in the renovation, maintenance and improvement market.
Pricing had largely stabilised but remained lower than prior year, primarily due to rollover impact of timber deflation, with this trend expected to continue through first half of year, Travis Perkins said.
Budget airline Wizz Air has said that it is "trading positively" into the summer with operating margins expected to improve this year, as it reported that annual profits for the year ended 31 March would be in line with previous guidance.
The company said it expects to deliver net income of €350-370m for year just gone, narrowing its guidance from €350-400m at the time of its third-quarter results in January.
Total revenues are tipped to be €5.05-5.10bn, up from €3.90bn the year before, reflecting stronger ticket revenue and pricing.
However, this was "partially offset by softer ancillaries in H2 as a result of the combination of network-related impacts from geopolitical events and resulting short window capacity redeployment", the company explained.
In line with previous guidance, revenues per available seat kilometre are expected to have grown at a mid-single-digit rate compared with last year.
Looking ahead, Wizz continues to expected flat year-on-year capacity growth over the current financial year, but said it is "trading positively into the summer of 2024 with selling load factors and pricing trending higher year-on-year in the first two fiscal quarters".
"Based on improved operational metrics, current trading dynamics and continuing capacity constraints in the wider market, the Company expects to expand operating margins, increase operational cash and further reduce net debt in F25," the company said.
"This year we have seen a continuation of the surge in passenger demand for air travel that began immediately after the pandemic," said chief executive József Váradi.
"While Wizz Air benefitted from this sustained demand and reported record passenger numbers throughout the year, we also mitigated new challenges, including a further wave of geopolitical unrest, the Pratt & Whitney GTF engine recall and air traffic control disruptions."
Moonpig tumbled on Thursday after a number of shareholders placed around 25m shares in the company at 160p each, which is a discount of just under 10% to the closing price a day earlier.
According to Bloomberg, the placing represented about 7.3% of Moonpig’s issued share capital.
Shares were placed by Exponent Private Equity LLP, LCP VIII Holdings, Strategic Partners VII Investments, LGT Capital Partners, GoldPointPartners, K Athena Investments No 40 Limited, Storebrand International Private Equity and Aberdeen Standard Investments prices.
Trainline shares derailed as the opposition Labour Party promised to renationalise the UK’s railway network within five years of taking office on Thursday, in a bid to address the system’s challenges without compensating its existing private operators.
Labour said it would create a publicly owned entity, Great British Railways, to take over passenger rail contracts currently held by private companies as they expire.
It would be the most significant overhaul of the railway system in decades, according to Reuters, reversing the controversial privatisation of the network initiated by John Major’s Tory government in the 1990s and continued under Tony Blair’s Labour administration.
Shares in rail ticket agency Trainline were down on the news, on the likelihood that a nationalised operator would lead to a simpler ticketing system and a single official booking platform, potentially undermining Trainline’s attractiveness to passengers.
Reuters said almost 70% of voters supported renationalisation, according to a recent YouGov poll.
The current Conservative government, led by prime minister Rishi Sunak, had also proposed establishing a new Great British Railways (GBR) company, although with a different operational framework that would still see private operators being contracted to run services.
Recent data indicated that cancellations in the final quarter of 2023 reached unprecedented levels since records began in 2018, with labour disputes and strikes contributing to some of the disruptions.
Labour proposed the establishment of a Passenger Standards Authority to oversee GBR's performance, along with introducing price guarantees for future fares to alleviate financial burdens on passengers.
WH Smith said on Thursday that it was on track to deliver on expectations for the year after a "good" first half.
In the six months to 29 February, headline group profit before tax and non-underlying items ticked up to £46m from £45m in the same period a year earlier, with total group revenue up 8% to £926m.
Revenue from the travel business was up 13%, with Travel UK revenue 15% higher year-on-year. North America saw a 13% increase, while rest of the world revenues rose 24%.
Trading profit in the travel segment increased to £50m from £47m and High Street trading profit declined to £22m from £24m.
The retailer said it continues to see strong momentum across all of its markets as it benefits from growing passenger numbers.
The pace of winning new business in the travel segment remains "strong”, it said. Across the UK, North America and Rest of World, it won 31 stores in the half and now has more than 80 stores won and due to open, of which it expects to open over 55 in the second half of the tear.
Chief executive Carl Cowling said: "Our travel divisions are trading well and I am particularly pleased with the outstanding performance from our UK Travel business which has seen a 19% increase in trading profit.
"We continue to make excellent progress in this division, growing our space and broadening our categories as we transition to a one-stop-shop for travel essentials.
"In North America, it has been a very active period where we have opened a further 13 stores. We have also now fully integrated InMotion into our core airport business. This will allow us to sell tech accessories more effectively across our North American airport estate and generate operational efficiencies."
He said the second half of the year has started well and the group is on track to deliver full year expectations.
Market Movers
FTSE 250 (MCX) 19,697.19 -0.11%
FTSE 250 - Risers
Inchcape (INCH) 789.00p 9.74%
Travis Perkins (TPK) 745.50p 4.63%
Abrdn (ABDN) 144.60p 4.07%
Wizz Air Holdings (WIZZ) 2,192.00p 3.69%
Close Brothers Group (CBG) 474.80p 3.49%
NCC Group (NCC) 131.20p 3.31%
PureTech Health (PRTC) 219.50p 3.29%
Crest Nicholson Holdings (CRST) 188.20p 2.17%
RIT Capital Partners (RCP) 1,936.00p 2.11%
Genus (GNS) 1,734.00p 2.00%
FTSE 250 - Fallers
Moonpig Group (MOON) 156.00p -12.16%
Trainline (TRN) 307.40p -10.38%
WH Smith (SMWH) 1,186.00p -5.72%
Indivior (INDV) 1,437.00p -5.09%
Mobico Group (MCG) 54.10p -3.39%
Tyman (TYMN) 380.00p -3.31%
Bakkavor Group (BAKK) 119.00p -3.25%
Greggs (GRG) 2,692.00p -3.17%
North Atlantic Smaller Companies Inv Trust (NAS) 3,680.00p -3.16%
FirstGroup (FGP) 166.00p -2.75%