FTSE 250 movers: Cheer for M&B, Safestore falls on cautious outlook
FTSE 250 (MCX) 18,840.23 -1.84%
Harvester, Toby Carvery and All Bar One owner Mitchells & Butlers said it expects full-year results to be at the "top end" of expectations after a solid first-quarter performance with sales rising strongly over the key festive period.
Total like-for-like sales in the 15 weeks to 13 January were up 7.7% over the year before, with 7.2% growth in the first eight weeks of the period followed by 8.2% growth in the latter seven weeks.
Notably, LFL sales over the "five key festive days" were up 10.1% on last year, the company said.
"We are delighted by the strong trading performance over the festive season, with very strong performances across our brands portfolio thanks to the hard work of our teams," said chief executive Phil Urban.
"Growth was particularly strong on key dates, with record sales for Christmas day based on 229,000 meals served, supported by strong trading in the run up to Christmas, with the return of work parties and festive gatherings driving sales."
In a brief trading update to shareholders on Wednesday, M&B was optimistic about its outlook. Despite a 9.8% increase in the National Living Wage from April onwards, the company said that overall costs pressures are starting to ease.
"We remain mindful of uncertainties ahead but, based on the strong performance of the business so far this year we now believe that the full-year outturn will be towards the top end of current consensus expectations," the company said.
Geotechnical engineering firm Keller said on Wednesday that 2023 underlying operating profit was set to be "significantly ahead" of market expectations of £150m after a particularly strong end to the year.
In a post-close trading update for the year to the end of December, the company said the positive trading momentum and strong operational performance seen in the first nine of months had continued in the fourth quarter.
The group also said that the underlying operating profit margin for the year was expected to be "significantly ahead" of recent years.
In North America, management actions to improve performance in the foundations business in the second half of 2022 generated "a material and sustainable" improvement, it said, with a resultant uplift in operating margin.
In Europe, however, the macroeconomic environment remained challenging in H2, with weak demand and competitive pricing denting profitability.
Chief executive Michael Speakman said: "We are very encouraged by the group's strong progress in 2023. The combination of management actions to improve operational performance in project execution, commercial agility in the face of a dynamic market, and the one-off benefits in North America will result in Keller delivering a record performance in 2023 that has significantly exceeded our original expectations.
"The fundamental strengths of the business, together with the continued positive outlook and our strong order book, give us confidence in further progress in 2024."
Shares in Safestore declined on Wednesday despite the self-storage space provider appearing to beat market expectations with its annual results, as it pointed to a softening of conditions in the UK in the new financial year.
The company, which is Europe's second-largest self-storage group with operations across the UK, France, the Netherlands, Belgium and Spain, said group revenues were up 5.5% in the 12 months to 31 October at £224m.
A 5.1% increase in maximum lettable area to 8.09m square foot was able to offset a fall in closing occupancy to 77% from 82.1% the previous year.
"Resilient performances in the UK and Paris were complemented by new store driven growth in Spain and the annualisation of our ownership of the Netherlands and Belgium businesses," the company said.
Underlying EBITDA rose 5.3% to £142m, while adjusted diluted earnings per share were more or less unchanged on the previous year at 47.9p, slightly ahead of Peel Hunt's forecasts of 47.4p.
However, the statutory operating profit more than halved to £230.4m, down from £514.5m previously, as a result of gains on investment properties falling to just £93.8m from £381.6m.
Meanwhile, the dividend was increased by 1% to 30.1p which it said was in line with its progressive payout policy.
Looking ahead, the company reported a 0.6% LFL revenue decline for the first two months of the new financial year, with "modest" falls in the UK. It also said that "limited" promotional activity results in an improvement in LFL occupancy in the UK and Paris.
"The immediate impact on rates is expected to gradually reduce over the next few months, particularly as the group will annualise the discounting activity that took place later last year in spring," it said.
Commenting on the outlook statement, analysts at Peel Hunt said that there were downside risks to their forecasts. "Depending on how the rest of the year pans out, our 2024E EPS forecast of 46.7p may prove too optimistic; and removing all LFL growth this year would reduce our estimate by c.4% to c.45p," they said in a research note.
Market Movers
FTSE 250 - Risers
Mitchells & Butlers (MAB) 263.20p 3.30%
Trustpilot Group (TRST) 161.10p 1.32%
Keller Group (KLR) 839.00p 1.08%
Abrdn Private Equity Opportunities Trust (APEO) 468.50p 0.97%
BH Macro Ltd. GBP Shares (BHMG) 361.00p 0.84%
Oxford Instruments (OXIG) 2,135.00p 0.71%
Harbour Energy (HBR) 316.90p 0.60%
Clarkson (CKN) 3,500.00p 0.43%
Hilton Food Group (HFG) 788.00p 0.38%
Bytes Technology Group (BYIT) 612.50p 0.25%
FTSE 250 - Fallers
Safestore Holdings (SAFE) 788.00p -7.29%
Drax Group (DRX) 497.90p -5.56%
Diversified Energy Company (DEC) 971.00p -5.36%
OSB Group (OSB) 413.00p -5.19%
Close Brothers Group (CBG) 599.50p -4.99%
Jupiter Fund Management (JUP) 73.80p -4.84%
LondonMetric Property (LMP) 183.20p -4.73%
LXI Reit (LXI) 102.20p -4.58%
Mobico Group (MCG) 85.15p -4.54%
Investec (INVP) 511.40p -4.52%