FTSE 250 movers: No greetings for Moonpig; Paragon in the money

by | Dec 6, 2022

FTSE 250: 19,139.92, down 0.98% at 1625 GMT.
Shares in greeting card maker Moonpig plunged ahead of interim results due on Wednesday, on reports several hedge funds are shorting the stock.

Paragon Banking shares surged as the bank reported a surge in full-year profits on Tuesday as lending grew.

In the year to 30 September, operating profit before fair value items rose 16.4% to £226m, while statutory pre-tax profit surged 95.6% to £417.9m.

Total new lending was up 23.6% to £3.21bn, with mortgage landing advances 17.2% higher at £1.91bn, while commercial lending advances rose 34.3% to £1.30bn.

Paragon said trading had been strong across the group, with a combination of strong loan growth, widening net interest margins and tight cost control.

Chief executive Nigel Terrington said: “These results reflect an outstanding financial and operational performance, delivering good growth, enhanced margins and improved cost efficiency, all combining to deliver strong returns to shareholders.

“As a leading specialist banking group we are increasingly using technology to strengthen our franchises. New digital platforms introduced in the last year are already seeing tangible evidence of an enhanced customer proposition and service delivery, as well as improved cost efficiencies.

“Our cautious risk appetite, high quality loan book and extensive through-the-cycle experience ensure we are well positioned as we head into 2023 and are fully prepared to support our customers’ needs.”

Industrial thread maker Coats Group said the trustee of its UK pension scheme had purchased a £350m bulk annuity policy from Aviva.

The deal insures benefits payable under the scheme for around 3,700 pensioner and dependant members, representing roughly 20% of the scheme’s liabilities.

“The purchase of this policy sees all the scheme’s financial and demographic risks fully hedged for the covered liabilities. The scheme will receive a regular stream of income that matches the pension payments for the covered members, making it a precise liability hedging asset, thus further de-risking the scheme and reducing future balance sheet volatility,” Coats said on Tuesday.

It added that the buy-in is consistent with plans to fully insure the scheme and remove it from the group balance sheet.

“Once the scheme is fully funded and cash contributions cease, the group’s free cash generation will improve significantly allowing increased investment in growth or the return of excess capital to shareholders.”

“When the technical provisions deficit for the scheme was last formally assessed at 31 March 2021, as part of the triennial valuation cycle, it showed a £193m deficit. Updates since then indicate that the deficit had fallen closer to £55m by mid-November 2022, with a further reduction to £25m-£30m expected following the buy-in.”

Travel food outlet operator SSP Group was up after the company swung to a full year profit as passenger numbers rebounded from the Covid pandemic during the summer and said the new financial year has started well with sales strengthening further to an average of 104% of 2019 levels in the first eight weeks.

The owner of the Upper Crust baguette chain reported a pre-tax profit of £25.2m compared with a £411.2m loss. Underlying core profits were £142m for the year to September 30, compared to a loss of £108.3m last year.

“The continued improvement in our trading performance in recent months has been encouraging and has been driven by a further recovery of passenger numbers. The recovery is being led by domestic and leisure travel across both the air and rail sectors, with business and commuter travel also recovering, albeit more slowly,” the company said on Tuesday.

“As we look ahead to our 2023 and 2024 financial years, based on the current pace of the recovery of the travel sector, we are planning for a recovery in passenger numbers to between 85% and 90% of 2019 levels in 2023, and between 90% and 95% in 2024.”

SSP said revenues are expected to include the effect of accumulated inflation between 2019 and 2023 of around 12% and between 2019 and 2024 of 14%.

“In total, we are planning for revenues to be in the region of £2.9-3bn in 2023 and in the region of £3.2-3.4bn in 2024, with a corresponding EBITDA in the region of £250-£280m in 2023 and £325-£375m in 2024.”

Victoria Scholar, head of investment at Interactive Investor, said SSP had strategically increased prices to offset rising costs, which has boosted revenues without denting demand.

“SSP is optimistic about further growth to its top and bottom lines next year, despite the growing threat of recession. Investors are cheering this morning’s update with shares trading higher, but the stock is still nursing a year-to-date loss of nearly 15%,” she said.

FTSE 250 – Risers

Ferrexpo (FXPO) 161.00p 4.89%
Paragon Banking Group (PAG) 486.20p 4.69%
Coats Group (COA) 69.90p 4.64%
Bank of Georgia Group (BGEO) 2,640.00p 3.33%
SSP Group (SSPG) 221.40p 2.31%
Synthomer (SYNT) 132.70p 2.08%
Abrdn (ABDN) 202.80p 1.91%
Apax Global Alpha Limited (APAX) 184.60p 1.88%
BBGI Global Infrastructure S.A. NPV (DI) (BBGI) 160.20p 1.39%
Babcock International Group (BAB) 294.40p 1.38%

FTSE 250 – Fallers

Moonpig Group (MOON) 148.60p -8.55%
Darktrace (DARK) 327.50p -6.56%
Carnival (CCL) 676.80p -6.10%
Aston Martin Lagonda Global Holdings (AML) 132.85p -5.78%
Clarkson (CKN) 2,930.00p -5.48%
IP Group (IPO) 63.40p -4.88%
Liontrust Asset Management (LIO) 1,068.00p -4.47%
Victrex plc (VCT) 1,708.00p -4.15%
Currys (CURY) 71.75p -4.14%
Edinburgh Worldwide Inv Trust (EWI) 178.00p -3.99%

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