MARKET REPORT: Mitie soars as it launches £50m share buyback plan
MARKET REPORT: Mitie rises as it announces earnings to be higher than expected and launches £50m share buyback plan
Mitie shares soared after it said earnings were higher than expected and it launched a share buyback program.
In an unscheduled update, the FTSE 250 cleaning group said it has shifted its business away from short-term Covid-related contracts.
The outsourcing company said revenue for the year to March 31 was “slightly higher” than the previous 12 months when it brought in £4 billion.
As a result, Mitie said annual profit was about £10m higher than expected, £155m or more.
Shares rose 13.5 percent, or 11 pence, to 92.5 pence. The group praised a strong end to the fiscal year, with sales in the fourth quarter up about 10% compared to the same period 12 months ago.
Profits up: In an unscheduled update, FTSE 250 cleaning group Mitie said it has shifted its business away from short-term Covid-related contracts
Mitie also secured a string of contract wins and renewals from the Ministry of Defense and Eurostar, among others.
The group also launched a £50 million share buyback program yesterday.
It will be split into two parts, with an initial £25 million buyback scheme to start immediately. The timing of the second tranche will depend on M&A opportunities, the company added.
The FTSE 100 rose 0.4 percent, or 29.93 points, to 7909.44 and the FTSE 250 rose 0.05 percent, or 9.42 points, to 19296.32.
There were new signs of China’s recovery from Covid after the economy grew 4.5 percent in the first quarter. Mining stocks moved higher on higher metal prices.
And upgrades from investment bank UBS drove Fresnillo up 3.2 percent, or 24.8 pence, to 801 pence, and Antofagasta added 1.8 percent, or 29 pence, to 1,637 pence.
Abrdn fell 0.7 percent, or 1.4 pence, to 201.2 pence amid reports the investment group is cutting about a fifth of its multi-asset team.
Stock watch – Volex
Volex chairman Nat Rothschild hailed annual results that exceeded City’s expectations.
The company, which makes power cords and charging plugs for electric cars, said it had earned at least £572 million in revenue in the year to April 2.
This was more than the £558 million analysts had expected and about 15.5 per cent higher than the year before. Profits of at least £53 million were also above forecasts.
Rothschild is the largest shareholder with nearly 25 percent.
Shares rose 19.9 percent, or 42 pence, to 252.5 pence.
According to the Financial Times, fund managers and investment specialists are among the 27 positions that will be given the opportunity to resign voluntarily.
Wealth managers have had to contend with rising costs and clients withdrawing their money from funds.
Moneysupermarket cashed in on people looking for auto and travel insurance.
The comparison website’s turnover rose 15 per cent to £106.3 million in the three months to March 31.
Shares rose 0.6 percent, or 1.6 pence, to 249.8 pence.
Network International’s boss hailed a “solid start” to 2023 after the payments company’s revenue rose 13 percent in the first quarter.
Shares rose 0.2 percent, or 0.8p, to 364p.
It came a day after private equity giants CVC Advisers and Francisco Partners made a bid worth £2.1bn.
Money transfer group Wise dipped into the red as high borrowing costs and inflation caused customers to cut back on moving larger payments for buying or selling real estate and investments.
The company said its average volume per customer (VPC) was down 7 percent year-on-year amid a slowdown in customers moving volumes over £10,000.
Shares fell 7.8 percent, or 45.4 pence, to 540 pence.
Halfords told investors that sales and earnings should grow over the medium term. Speaking on part of its Capital Markets Day, the bike and car retailer said its expected turnover of around £1.6bn for this financial year should rise to £1.9bn.
And profits between £50m and £60m should be around £90m and £110m. Shares rose 9.3 percent, or 16.4 pence, to 193 pence.
Traders sprinted for Crest Nicholson despite mixed reports from a broker. JP Morgan raised the homebuilder’s target price from 180 pence to 210 pence.
But the investment bank reiterated its “underweight” rating on Crest Nicholson, saying the stock had one of the “biggest downsides according to 2023 estimates.”
Shares rose 8.9 percent, or 22.2 pence, to 272.2 pence.