FTSE 250 movers: National Express hits accelerator; Spire off colour

FTSE 250: 19,870.81 +0.05%

Shares in bus company National Express surged as it reinstated dividends and reported a surge in annual profits, driven by a rise in passengers using its services as a result of UK rail strikes.

The company on Thursday posted underlying pre-tax profit of £146m, up from £39.7m. Shareholders will get 5p a share as a dividend. Group revenue rose by a third to £2.8bn.

Shares in the public transport operator, which slumped during the pandemic as people were forced to work from home during lockdowns, rose 13% as dividend payments were resumed for the first time since 2020 due to a rebound in passenger numbers.

It has also secured increased rates for 2023 and 2024 to recover rising costs.

National Express, which owns and leases buses and trains in 12 countries including North America, Spain and the UK, said sales from UK coaches more than doubled, after more people turned to buses as UK rail workers held strikes over pay amid soaring inflation and the cost of living crisis.

More than 50,000 seats were added across the company's network to prepare for a rise in demand amid the rail disruptions. National Express's own research found that nearly 10% of the people who first used their buses during the strikes were continuing to do so even on non-strike days.

“Whilst the operating backdrop remains challenging, with inflationary pressures continuing in key markets, we expect to see that momentum continue, driven by growth in passenger numbers, mobilisation of new contracts, a continuing recovery in US School Bus and the securing of rate increases during 2023 and 2024 allowing us to recover cost increases,” said chief executive Ignacio Garat.

“Our expectations for 2023 are unchanged, and we have clear and robust actions in place to mitigate macro-economic headwinds and to reduce costs if necessary. The continued and expanding demand for public transport over the coming years will bring growth opportunities and our Evolve strategy positions us well to capitalise on them."

Industrial thread maker Coats Group posted a rise in full-year profits and revenue on Thursday and lifted its dividend as it hailed the benefits of recent acquisitions.

In the year to 31 December 2022, adjusted pre-tax profit increased to $206.8m from $181.6m a year earlier. Adjusted operating profit rose to $235m from $181m, in line with market expectations. Coats said this reflected "strong pricing and mix fully offsetting inflation, as well as part-year contribution from acquisitions and strategic projects".

Revenue grew 9% to $1.6bn and the company lifted its dividend by 15% to 2.43 cents per share.

Chief Rajiv Sharma said: "Coats produced a strong set of results in 2022, a year which was characterised by high inflation and supply chain disruption. Organic revenue growth was 10%, above our targeted medium-term growth of around 6%, and organic adjusted operating profit increased 22%.

"We made further excellent progress in transforming the group during the year, and this has made Coats a stronger, fitter and more focused group, enhancing our leading market positions in industrial thread and footwear component markets. The 2022 acquisitions of Texon and Rhenoflex have not only significantly strengthened our position in the attractive footwear market but also increased our medium-term organic growth and margin potential."

Coats said it continues to anticipate a full-year 2023 performance in line with its expectations, with a weighting to the second half.

"This performance will be underpinned by the contribution from acquisitions, in addition to associated synergies and efficiencies from strategic projects," it said.

Molten metal flow engineer Vesuvius hailed record full-year results on Thursday despite "tough" markets and inflationary pressures.

In the year to 31 December 2022, pre-tax profit rose 62% to £207m, with revenues up 25% at £2bn. Trading profit was 60% higher at £227m and the company delivered a return on sales of 11.1%, up from 8.7% a year earlier.

Vesuvius proposed a final dividend of 15.75p, taking the full year dividend to 22.25p a share, up 5%.

Chief executive Patrick Andre said: "2022 was a record year for Vesuvius despite difficult market conditions in the second half. This performance was made possible by the technological differentiation of our products and solutions, which enabled us to simultaneously compensate for all cost inflation with price increases and gain market share.

"These record results are higher than those ever achieved pre-pandemic, despite materially lower volumes, in both the steel and foundry divisions, as our end markets have not fully recovered since that period. This shows that our objective of a 12.5% return on sales is achievable in the medium-term on normalised volumes."

Despite a number of headwinds - weak steel and foundry markets, the ongoing impact of a cyber incident at the start of the year and a planned reduction in inventory - the company said it was on track to meet its expectations for 2023.

Private healthcare group Spire Healthcare returned to profit in 2022 and said it sees recent strong momentum continuing into the early months of 2023.

Spire Healthcare said revenues had risen 8.3% to £1.19bn, while adjusted operating profits surged 30.2% to £105.6m and adjusted underlying earnings increased 14.2% to £203.5m.

The FTSE 250-listed firm also said it had delivered a pre-tax profit of £3.9m, a marked improvement on the prior year's £1.9m pre-tax loss. On a per share basis, basic profits came to 2.1p per share, up from 2021's pre-tax loss of 2.4p.

Net bank debt rose 11.2% to £250.1m and adjusted free cash flow shot up from £12.0m to £28.0m.

Spire also recommended of a final dividend payment of 0.5p per share for the year, its first dividend payment since suspending payouts due to Covid-19 pandemic in April 2020.

Looking ahead, Spire expects to see strong momentum in 2022 continue into the early months of 2023, with continued growth in revenue, profit and return on capital expenditure throughout the year, as well as additional margin improvement.

Chief executive Justin Ash said: "I am encouraged by the growth in activity, revenue, earnings and return on investment of the business against a particularly challenging operating background. Momentum has continued into the new year.

"The quality of our people, the resilience of our business model and the sustained demand for healthcare mean that despite the current macroeconomic uncertainty, we remain confident in the future growth and returns prospects for Spire Healthcare."

FTSE 250 - Risers

Pets at Home Group (PETS) 392.60p 0.00%
Harbour Energy (HBR) 291.10p 0.00%
Supermarket Income Reit (SUPR) 89.60p 0.00%
QinetiQ Group (QQ.) 341.00p 0.00%
Morgan Advanced Materials (MGAM) 301.50p 0.00%
National Express Group (NEX) 142.40p 0.00%
HICL Infrastructure (HICL) 157.20p 0.00%
Capricorn Energy (CNE) 250.00p 0.00%
The Renewables Infrastructure Group Limited (TRIG) 123.80p 0.00%
Paragon Banking Group (PAG) 596.50p 0.00%

FTSE 250 - Fallers

CMC Markets (CMCX) 249.50p 0.00%
Baillie Gifford Japan Trust (BGFD) 767.00p 0.00%
Syncona Limited NPV (SYNC) 166.40p 0.00%
Auction Technology Group (ATG) 683.00p 0.00%
Petershill Partners (PHLL) 166.00p 0.00%
Intermediate Capital Group (ICP) 1,396.00p 0.00%
Urban Logistics Reit (SHED) 142.50p 0.00%
Investec (INVP) 514.00p 0.00%
JPMorgan Japanese Inv Trust (JFJ) 468.50p 0.00%
Mitie Group (MTO) 81.50p 0.00%