FTSE 250 movers: Keller surges on outlook; Redde Northgate skids despite FY record

by | Jul 5, 2023

(Sharecast News) – Keller Group upped its full-year earnings outlook on Wednesday, on the back of strong first half trading and a “robust” order book.
The specialist geotechnical contractor said it expected to deliver a “record” first half performance. Combined with a “robust” order book, it now expects full-year underlying operating profits to be “materially” ahead of market expectations, although the increase in earnings was likely to tempered moderately by interest rate rises.

Keller also confirmed it would increase the interim dividend by 5%, to 13.9p per share.

In North America, Keller said it had seen a strong recovery in the operating margin during the six months. It added that while production volumes at its Suncoast unit had fallen, it had actively managed margins to deliver an improved performance year-on-year.

In Europe, Keller benefited from stabilising cost inflation and easing supply chain issues. However, it noted that the “recessionary backdrop” had caused some challenges, and that large projects – such as HS2 in the UK – made for stiff comparators.

Chief executive Michael Speakman said: “The actions we have taken to improve operational execution have resulted in an increased operating margin and a record performance in the first half of the year.

“This significant progress, together with the increased momentum and our robust order book, gives us the confidence to increase our expectations for the year.”

Vehicle hire company Redde Northgate posted a strong rise in annual profit, driven by higher demand for vans.

The company on Wednesday posted a 34.7% rise in pre-tax profit to £178.7m. Revenue grew by a fifth to £1.49bn and the full-year dividend was lifted by 3p a share to 24p. Despite the bumper earnings, shares in the company were down more than 7%.

“The group fleet is over 130,000 vehicles and multi-year insurer contracts are now at full run-rate. Together with our strong pipeline of new business including an additional large leasing company multi-service contract due to go live in the autumn, we are confident in continuing to deliver further stakeholder value,” said chief executive Martin Ward.

“We continue to enjoy robust demand as we start FY2024 and our recent signing of a further multi-service outsourcing contract for Redde reflects our healthy new business pipeline.”

However, Ward also warned the supply of vans might not catch up to demand for two years, while it could take even longer for prices to fall.

The business said supply challenges are easing as it upped its fleet to 130,000 vehicles, but added there was still a “scarcity” of vans in the UK.

“Supply for vans still remains problematic,” Ward told the London Evening Standard newspaper, adding that expected the challenges to remain for up to two years.

The impact on leasing prices could potentially last longer. Ward said supply in Spain has caught up, but prices had held up. “It’s hard to say if there’s read-across to the UK there,” he said.

FTSE 250 – Risers

Keller Group (KLR) 786.00p 11.65%
Plus500 Ltd (DI) (PLUS) 1,502.00p 2.11%
Molten Ventures (GROW) 266.40p 1.76%
C&C Group (CDI) (CCR) 131.80p 1.70%
Great Portland Estates (GPE) 433.20p 1.55%
Spire Healthcare Group (SPI) 218.50p 1.39%
FDM Group (Holdings) (FDM) 600.00p 1.35%
Senior (SNR) 171.20p 1.30%
CLS Holdings (CLI) 141.40p 1.29%
Fidelity Emerging Markets Limited Ptg NPV (FEML) 598.00p 1.08%

FTSE 250 – Fallers

Redde Northgate (REDD) 349.50p -7.54%
Jupiter Fund Management (JUP) 103.20p -4.80%
Elementis (ELM) 103.40p -3.72%
Watches of Switzerland Group (WOSG) 625.00p -3.10%
Travis Perkins (TPK) 800.00p -3.08%
Helios Towers (HTWS) 87.45p -3.05%
Savills (SVS) 832.50p -2.80%
Pennon Group (PNN) 681.00p -2.71%
IP Group (IPO) 54.00p -2.70%
Genuit Group (GEN) 285.50p -2.56%

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