FTSE 250 movers: Inchcape motors ahead; Capricorn falling

Bermuda-domiciled insurer Lancashire reported a 22.7% increase in first-quarter gross premiums written compared to the same period last year on Thursday, reaching $586.2m.

The FTSE 150 company said its group renewal price index (RPI) was 117% in the three months ended 31 March, indicating an increase in insurance premiums across the board.

Its IFRS 17 insurance revenue also increased, by 31.6% year-on-year, totalling $338.7m.

The firm’s total net investment return, including unrealised gains and losses, was reported to be 1.5%.

Its regulatory ECR ratio, which measures a company's ability to meet its insurance liabilities, was reported to be approximately 308% as at 31 December.

“I am pleased to report that Lancashire has continued to execute its strategy to take advantage of the significantly improved market conditions,” said group chief executive officer Alex Maloney.

“In the first three months of 2023 we maintained the momentum we built during 2022, with an increase in gross premiums written [to] the highest the group has delivered in a first quarter.

“Strong rate rises in a number of our product lines have persisted, particularly in property catastrophe business where the supply and demand gap for capacity which we saw at the 1 January renewals remains.”

Maloney said that for most other lines, 2023 was the sixth year of consecutive rate increases, adding that Lancashire would continue to grow “where it makes sense” in the current, positive underwriting environment.

“As for our investments, they delivered a positive total net investment return for the quarter of 1.5%.

“Our track record of navigating the insurance cycle through disciplined risk selection and capital management gives us confidence in delivering on our strategic priorities for the remainder of 2023.

“We look forward to making the most of these exciting underwriting opportunities supported by our robust capital position and talented teams.”

Automotive distributor Inchcape reported a positive start to the year in a first-quarter update on Thursday, with its full-year results set to be in line with published market consensus.

The FTSE 250 company said group revenue for the three months ended 31 March totalled £2.7bn - up 50% on a reported basis.

It put the growth down to the benefit of mergers and acquisitions, including Derco, and organic growth of 13%, with growth across all regions.

Derco's revenue and profit contribution was in line with expectations, with the delivery of the integration plan said to be progressing well, including synergy targets.

The company said it had prioritised aligning inventory management practices with those employed across Inchcape.

It reiterated its operating margin expectation towards the top-end of a typical distribution business, at between 5% and 7% pre-synergies.

Inchcape said it was also expanding its distribution footprint in the Asia-Pacific region, having agreed to purchase Mercedes-Benz's distribution operations in Indonesia, which has an annualised revenue of around £200m, and CATS in the Philippines, with an annualised revenue of about £120m.

The completion of the purchase was expected in the second half of the year.

Additionally, Inchcape said it had been appointed as the distributor of Tata commercial vehicles in Thailand.

“Inchcape has made an excellent start to 2023 - our first quarter results show a continuation of the trends we experienced at the end of last year, with organic growth underpinned by the improvement in vehicle supply,” said group chief executive officer Duncan Tait.

“Growth in the distribution segment was further accelerated by the significant contribution from new businesses in the Americas, with Derco, Simpson Motors and Ditec all contributing positively.

“I am especially pleased with our progress in integrating Derco, and we remain firmly on track with our plans.”

Tait said that during the quarter, Inchcape continued to shift its portfolio towards distribution, expanding its footprint in the Asia-Pacific region.

“This included Mercedes-Benz's operations in Indonesia and an agreement to acquire CATS, the leading distributor of luxury vehicles in the Philippines - another new and exciting high growth market for the group.

“The combination of our broad market footprint, strong OEM relationships, our digital and data capabilities and our robust financial position continues to make Inchcape the natural consolidator in a highly fragmented industry.”

Duncan Tait described Inchcape as a business with “great” momentum and an “exciting” future.

“With a clear and proven strategy, we are well-positioned to capitalise on further opportunities for organic growth and market consolidation, and I am confident we will continue to deliver sustainable growth and long-term value for all our stakeholders.”

Venture capital firm Molten Ventures said on Thursday that both its gross portfolio and net asset values had fallen in the 12 months ended 31 March but said its portfolio companies continued to maintain "strong revenue growth momentum".

Molten Ventures, formerly known as Draper Esprit, said its gross portfolio value was expected to be roughly £1.37bn, down from £1.53bn a year earlier, while net asset value per share was seen dropping from 929.0p to 775.0p.

The FTSE 250-listed group stated its underlying gross portfolio decrease in fair value was approximately 19% at constant currency, reflecting stabilisation in markets during the second half, and said its core portfolio remained "well funded", focused on capital efficiency, and trading "strongly".

Molten added that realisations generated cash proceeds for Molten in the year of £48.0m, down from £126.0m twelve months prior, with realisations exceeding new investments in the second half of the year.

Chief executive Martin Davis said: "Our focus for the year has been on adaptation for our business and active management of the portfolio. The strength of our model and expertise of Molten's people has enabled us to do this, providing relative resilience throughout a period of challenging macroeconomic conditions.

"While economic uncertainties persist, we are beginning to see signs of stabilisation. Molten is well positioned to manage through a recovery and capitalise on any opportunities presented and in doing so deliver for shareholders."

Opioid addiction treatment maker Indivior lifted its full-year revenue guidance on Thursday but trimmed its outlook for operating profit due to costs related to the acquisition of Opiant Pharmaceuticals, as it posted a jump in first-quarter profit and revenue.

In the quarter to the end of March, pre-tax profit rose to $58m from $48m in the same period a year earlier, while adjusted operating profit was up 31% at $71m. Net revenue ticked up 22% to $253m.

Net revenue for Sublocade was 55% higher at $132m. Indivior said this reflects strong growth in the Organized Health Systems (OHS) channel and continued new US patient enrolments. Meanwhile, net revenue for Perseris extended-release injection rose 60% on the first quarter of 2022 to $8m.

The company lifted its full-year net revenue guidance to between $970m and $1.04bn, from previous guidance of $950m to $1.02bn. However, its outlook for adjusted operating profit was reduced to "slightly below" FY 2022's adjusted operating income of $212m, as a result of the additional operating expenses associated with the Opiant acquisition.

Previously, Indivior had said that adjusted operating profit would be higher than in 2022.

Chief executive Mark Crossley said: "Sublocade (buprenorphine extended-release) injection continues to power our growth as we drive greater depth of prescribing across Organized Health Systems (OHS) in the treatment of moderate-to-severe opioid use disorder (OUD).

"Within the quarter, we also completed the acquisition of Opiant Pharmaceuticals, Inc. This important strategic step strengthens our addiction portfolio through the addition of OPNT003 (nalmefene nasal spray), a new potential option for opioid overdose reversal which we expect to launch in the US in the fourth quarter, subject to regulatory approval."

Troubled oil and gas producer Capricorn Energy is planning to give shareholders $575m in payouts after a failed merger, boardroom clearout and radical cut in operations.

The company on Thursday said it would pay a $450m special dividend next month, with a further $100m in the fourth quarter and a share buyback of at least $25m

The final-quarter payout will depend on revenue from its Egyptian assets, the central plank of its new plan, and the outcome of negotiations over its Egyptian licences as well as movements in oil and gas prices this year.

Capricorn has already started selling its UK interests in the Catcher and Kraken fields as the company offloads or reduces non-Egyptian assets, including licences in Mexico, Mauritania and Suriname.

Capricorn also announced the appointment of Randy Neely, who headed up Egypt-focused oil and gas producer TransGlobe, as new chief executive from June 1.

The company was thrown into turmoil earlier this year after a shareholder revolt over its plans to merge with Israeli gas producer NewMed Energy that resulted in a new board mostly comprising members proposed by activist investor Palliser.

Palliser and some of Capricorn's biggest shareholders had publicly opposed the merger, and major shareholder advisory groups had also recommended rejecting the plan.

Last month it announced plans to fire 75% of UK staff as part of the new strategy.

Capricorn announced a planned merger with Israeli gas company NewMed in September, valuing Capricorn shares at 271 pence, including a $620m, a 13% premium over the previous day's price. Capricorn shares plunged more than 10% to 217p each on Thursday.

In February it abandoned the deal after opposition from shareholders, including Palliser Capital, saying the merger with NewMed was "another one-sided deal that does not reflect the company’s intrinsic value" and urging the company "to recognise that it need not be a forced seller".

Multi-utility supplier Telecom Plus said on Thursday that it had delivered a "record year of growth", with almost 160,000 further households signing up with the business.

Telecom Plus, which trades as Utility Warehouse, still expects full-year profits to be in line with expectations, partly due to ongoing "strong interest" in its income opportunity as cost of living pressures continue.

The FTSE 250-listed group said full-year adjusted pre-tax profits were pegged to be slightly above £95.0m and also confirmed its intention to pay a total dividend for the year of 80.0p, up from 57.0p per share a year earlier.

Telecom Plus added that falling wholesale prices were expected to feed through into lower energy bills later in the year, albeit remaining at "elevated levels". At the same time, it acknowledged that there was "considerable upward pressure on household budgets", with continued price inflation across the broadband, mobile, and insurance markets.

Co-chief executives Andrew Lindsay and Stuart Burnett said: "The business has delivered an exceptional performance over the last 12 months, with record results on virtually all metrics.

"As the UK's only multi-service utility provider, UW remains uniquely positioned to help families not only save on their household bills but also to earn a much-needed additional income. This gives us confidence in our ability to deliver another year of double-digit organic customer growth and to make further progress towards our target of welcoming an additional one million customers in the next four-five years."

Morgan Sindall fell as the stock went ex-dividend.

FTSE 250 - Risers

W.A.G Payment Solutions (WPS) 104.50p +9.31%

Bodycote (BOY) 685.50p +4.58%

Inchcape (INCH) 799.00p +4.51%

Lancashire Holdings Limited (LRE) 600.00p +4.44%

Molten Ventures (GROW) 278.20p +4.27%

Indivior (INDV) 1,523.00p +3.61%

Bakkavor Group (BAKK) 99.00p +3.34%

Wetherspoon (J.D.) (JDW) 711.50p +3.27%

Mitchells & Butlers (MAB) 172.80p +3.23%

Watches of Switzerland Group (WOSG) 832.00p +3.23%

FTSE 250 - Fallers

Capricorn Energy (CNE) 220.00p -9.32%

Morgan Sindall Group (MGNS) 1,706.00p -3.83%

Crest Nicholson Holdings (CRST) 260.20p -3.63%

Derwent London (DLN) 2,364.00p -2.88%

Ascential (ASCL) 251.40p -2.78%

Hammerson (HMSO) 27.48p -2.62%

Marshalls (MSLH) 298.40p -2.48%

Telecom Plus (TEP) 1,892.00p -2.47%

Aston Martin Lagonda Global Holdings (AML) 222.80p -2.28%

Hunting (HTG) 225.00p -2.17%