FTSE 250 movers: Tasty Premier Foods, Spirent slumps

FTSE 250: 20,088.96, +0.12% at 1419 GMT.

Mr Kipling owner Premier Foods upgraded its full-year profit expectations on Tuesday as it pointed to a continued strong performance.

The company said it has continued to trade strongly in recent weeks, bringing the momentum it delivered in the third quarter into the final quarter of the year. As a result, it now expects fourth-quarter revenue to be at least 10% ahead of the prior year.

Premier said the grocery division continues to lead the way, with broad based growth and further market share gains, while the sweet treats business has demonstrated "an improving trend". The international segment will deliver another quarter of strong sales growth, it added.

The company - which also owns Bisto and Oxo, among other brands - said trading profit and adjusted pre-tax profit for this year are set to be ahead of the board's initial expectations at around £155m and £135m respectively. This equates to growth of around 10% on the previous year.

Net debt is forecast to be broadly in line with last year and the board's expectations.

Just Group posted a strong rise in full-year profits and announced that it had achieved a record start to the year.

Underlying operating profits were ahead by 19% to £249m.

That was thanks in part to Retirement Income sales being up by 17% to £3.1bn, driven by a 33% surge in Defined Benefit De-risking sales.

Commenting on the firm's results, chief executive officer David Richardson highlighted how over the past four years Just Group's performance had exceeded the commitments made.

"Our positioning in the exciting DB and improving retail markets underpin our confidence to deliver 15% growth in underlying operating profit per annum, on average over the medium term," he added.

First quarter momentum was also "strong" with Just closing a £513m DB transaction - its largest ever - alongside a strong start to 2023 for its retail business.

The company also improved its capital coverage ratio from 164% to 199%, of which 30 percentage points of the increase was the result of interest rate increases and the remainder of organic capital generation.

Serviced offices provider IWG said on Tuesday that pre-tax losses had narrowed in the twelve months ended 31 December amid strong demand and also stated it was "cautiously optimistic" for 2023.

IWG said it had delivered its highest-ever revenue performance in its 34-year history, with both system-wide and revenue growth of 24% at actual currency to £3.08bn and £2.74bn, respectively, reflecting both increased demand for flexible working and higher pricing.

All three geographic regions reported good year-on-year revenue growth, with IWG's largest region of Europe, the Middle East and Africa seeing strong revenue growth of 17% to £1.199bn, while revenues from the Americas rose 8% at constant currency to £1.02bn. IG noted that Asia still had "significant Covid-19 restrictions" throughout much of 2022, particularly in China, and therefore revenue growth was just 2% to £248.0m.

As a result, pre-tax losses from continuing operations narrowed from £259.0m to £105.0m, while gross profits surged 124% at constant currency to £575.0m and underlying earnings rose 22% to £1.33bn.

While overheads increased from £328.0m to £427.0m, cash flow from business activities turned positive and printed at £151.0m, up from the prior year's outflows of £219.0m.

Going forward, IWG said demand for hybrid working solutions continued to grow and stated that whilst macroeconomic headwinds around global growth remained, which can impact demand, plus challenges for the group from inflation and interest rates impacting costs, it remains "cautiously optimistic" about the outlook for 2023.

"We are confident that EBITDA will be in line with management's expectations with net debt falling during the year. However, it should be noted that the group is operationally leveraged, resulting in profitability moving up and down with relatively small changes in revenue," said IWG.

Spirent Communications posted a rise in full-year profit and revenue on Tuesday as the order book grew, but cautioned over a more challenging first half of 2023.

In the year to the end of December 2022, adjusted pre-tax profit was ahead 11% at $131.4m, with revenue up 5% to $607.5m. Revenue was driven by renewed strength in high-speed Ethernet from market demand and new product launches, offsetting some customer timing impacts in the lifecycle service assurance segment.

The order book rose 7% to $288.1m, with 30% for delivery beyond the next 12 months, which Spirent said was a record and "adds to future revenue visibility".

The dividend per share was lifted 12% to 7.57 cents a share.

Chief executive Eric Updyke said: "2022 saw another year of strategic execution, delivering strong growth in profit before tax for the sixth year in succession.

"Since the fourth quarter of 2022 we have seen delays to some of our customers' decision making and whilst we expect a more challenging first half of 2023, our business drivers remain intact, and we are very well placed to deliver for our customers as they invest in technologies such as 5G in order to maintain their own competitive advantages.

"Spirent operates in markets underpinned by resilient structural growth characteristics and, which together with our broad and deep portfolio and our enhanced customer proximity position us strongly to continue executing on our strategy in the medium and long-term."

Geotechnical engineering company Keller Group on Tuesday reported a fall in full-year earnings as inflation, higher costs and the war in Ukraine took their toll.

The company reported pre-tax profit of £56.3m for the year to December 31, down 17%. On an underlying basis profit rose 17% to £93.5m

Group revenue was £2.94bn, up 24% on the prior year on a constant currency basis.

“Whilst markets generally began to recover in volume terms, the residual pandemic-related labour and supply chain shortages were compounded by more localised effects of the war in Ukraine, resulting in increased supply chain issues and stronger inflationary pressures than the global economy has seen for some time,” the company said.

“Against this uneven macroeconomic backdrop, construction demand has reacted variably across geographies and sectors and almost all our businesses faced the challenge of serving increased market demand with a decreasing and more expensive supply base.”

Keller said that higher interest rates would increase interest expenses in 2023, but noted that the company had started the new financial year with increased momentum, a more solid operational base and was “well placed” for major contract awards.

FTSE 250 - Risers

Premier Foods (PFD) 131.60p 14.43%
Wood Group (John) (WG.) 221.00p 13.86%
Just Group (JUST) 90.30p 10.26%
Aston Martin Lagonda Global Holdings (AML) 299.00p 8.29%
IWG (IWG) 195.90p 4.06%
Mitchells & Butlers (MAB) 168.10p 3.70%
Jupiter Fund Management (JUP) 154.70p 2.93%
Moneysupermarket.com Group (MONY) 243.80p 2.87%
Darktrace (DARK) 269.70p 2.51%
Hikma Pharmaceuticals (HIK) 1,821.00p 2.45%

FTSE 250 - Fallers

Spirent Communications (SPT) 181.80p -13.84%
Keller Group (KLR) 763.00p -5.80%
Future (FUTR) 1,274.00p -5.35%
Clarkson (CKN) 3,205.00p -4.75%
Ferrexpo (FXPO) 141.70p -3.80%
Rathbones Group (RAT) 2,015.00p -2.66%
Baltic Classifieds Group (BCG) 154.80p -2.27%
Centamin (DI) (CEY) 101.40p -2.27%
Network International Holdings (NETW) 280.00p -2.23%
BlackRock World Mining Trust (BRWM) 718.00p -2.18%