Sharecast - Shares in discoverIE (LON:DSCV) rose strongly on Tuesday after the industrial electronics group lifted its interim dividend and delivered a 7% increase in first-half underlying profits on the back of better-than-expected margins.
The company reported an underlying pre-tax profit of £25.1m for the six months to 30 September, up from £23.5m the year before, as the underlying operating margin increased to 12.9% from 11.5%.
"We are making excellent progress towards our margin targets with a 1.4ppts increase in underlying operating margin, reflecting the leverage in our technology clusters, that is enabling efficiencies and creating value from acquisitions," said chief executive Nick Jefferies.
The company is targeting an underlying operating margin of 13.5% by year ending March 2025 and 15% in the medium term.
Nevertheless, as previously reported, revenues were flat year-on-year in the first half at £222m, rising 4% at constant exchange rates (CER), against a strong comparator with last year's sales rising 23% CER.
The company ended the period with an order book of £203m, which equates to around five months of sales which is said "provides good forward visibility". However, this was down from £223m at the start of the fiscal year and below the £257m reported the year before.
The company declared an interim dividend of 3.75p, up 6% on last year.
International food and beverage travel outlet operator SSP Group (LON:SSPG) on Tuesday reinstated its dividend as it reported a near doubling of annual core profits, driven by the continued resurgence in passenger numbers and workers returning to work in offices.
The company, which was hit hard by restrictions during the Covid-19 pandemic, posted underlying core earnings of £280m, up 97%. Revenue jumped 37% to £3bn, while a final dividend of 2.5p a share was declared.
On a pre-tax basis, profits at the Upper Crust chain owner surged to £88m from £25m.
SSP said new year trading had remained strong in all key markets, with total revenue during the first eight weeks from October 1 to November 26 up 22% year on year on a constant currency basis.
“Our revenue performance is being driven by passenger recovery, a strong customer proposition and robust operational execution. In addition, revenues are benefitting from net gains as we mobilise our secured pipeline,” the company said.
“In North America, sales grew by 33% year-on-year on a constant currency basis, driven by robust domestic air passenger numbers and strong like-for-like performance. Our performance includes a sales benefit from the acquisition of the Midfield concessions business, with the transfer of units at all seven airports now complete.”
Continental European revenues grew by 14% year-on-year benefiting from an extended holiday season into the autumn, while in the UK, sales increased by 22%, reflecting a strong performance in SSP’s airports business and an ongoing improvement in rail passenger volumes as commuters continue to return to working in offices.
Asia-Pacific and Europe, Eurasia and the Middle East revenues rose by 29% on further improvements in passenger numbers across the Asia Pacific region.
Online gifts and greeting cards retailer Moonpig (LON:MOONM) backed its full-year guidance on Tuesday as it reported a jump in first-half profits.
In the six months to the end of October, reported pre-tax profit rose 107.8% to £18.9m, while adjusted pre-tax profit was up 9.7% to £20.8m. Moonpig said the latter reflects stronger trading, offset in part by higher interest charges and the amortisation of technology platform investments.
Group revenue grew 6.5% to £152.1m.
The company said its performance was underpinned by the core Moonpig brand, which saw revenue rise 4.9% year-on-year and has consistently delivered growth at a mid-single digit percentage rate in recent months.
Revenue at Greetz - the Dutch business it bought in 2018 - fell 9.8% year-on-year in the first half, meanwhile, "with a continued trajectory of improvement in trading". At Experiences, pro forma revenue was up 4.5%, albeit with lower new voucher sales.
The group highlighted "encouraging" traction with Moonpig Plus subscriptions, which are driving consistently higher customer order frequency. Greetz Plus subscriptions are scheduled for roll-out in the second half of this year.
Chief executive Nickyl Raithatha said: "We are pleased to report year-on-year growth in both revenue and profit despite the challenging macro-economic environment, marking the group's return to revenue growth. Our focus on technology is driving this growth, underpinned by our resilient, profitable and cash generative business model, leveraging our unique use of data to drive customer loyalty.
"We continue to innovate to attract and retain our loyal customers. During the period nearly 4 million customers used our innovative card creativity features such as audio and video messages, AI-generated text suggestions, stickers, flexible photos and digital gifting solutions. As the clear online leader in greetings cards, we remain well positioned to benefit from the long-term structural market shift to online."
Russ Mould, investment director at AJ Bell, said: "What will encourage investors is a material increase in the number of subscribers to its Moonpig Plus services, as this could help make its revenue profile more predictable."
Barclays (LON:BARC) downgraded Auction Technology (LON:ATG) on Tuesday to ‘equalweight’ from ‘overweight’ and slashed the price target to 600p from 880p.
The bank said that while it remains constructive on the long-term structural growth of ATG, it is now more cautious on the near-term cyclicality of the business.
"Management guidance expects no further deterioration in end-markets, but after two top-line misses in a row we prefer to see proof in the numbers," it said.
Barclays added that at 17x 2024 price-to-earnings, the valuation is not cheap.
At 0935 GMT, the shares were down 4.9% at 495.50p.
FTSE 250 - Risers
Discoverie Group (DSCV) 708.00p 17.22%
AJ Bell (AJB) 264.00p 6.02%
SSP Group (SSPG) 223.80p 5.07%
Tritax Eurobox (GBP) (EBOX) 58.50p 4.28%
Genuit Group (GEN) 345.00p 2.99%
Derwent London (DLN) 2,208.00p 2.70%
Ashmore Group (ASHM) 187.90p 2.68%
QinetiQ Group (QQ.) 300.40p 2.60%
IWG (LON:IWG) 153.70p 2.54%
Safestore Holdings (SAFE) 808.00p 2.41%
FTSE 250 - Fallers
Auction Technology Group (ATG) 499.50p -4.13%
Mobico Group (MCG) 67.50p -3.02%
North Atlantic Smaller Companies Inv Trust (NAS) 3,780.00p -2.83%
Indivior (INDV) 1,287.00p -2.43%
Moonpig Group (MOON) 172.40p -2.32%
Centamin (DI) (LON:CEY) 98.95p -2.32%
NCC Group (NCC) 115.40p -2.20%
Ferrexpo (LON:FXPO) 71.15p -2.06%
PureTech Health (PRTC) 147.80p -1.99%
easyJet (LON:EZJ) 465.40p -1.98%