FTSE 250 round-up: Keller Group, Kier, WH Smith, FirstGroup
There’s plenty for mid-cap investors to digest today, with one high-flyer's shares slumping. City writer Graeme Evans runs through the key announcements.
14th November 2024 15:48
by Graeme Evans from interactive investor
High-flying Keller Group (LSE:KLR) shares were today brought back to earth in a session when mid-cap investors also focused on updates by Kier Group, FirstGroup, WH Smith and Premier Foods.
Ground engineer Keller has been one of this year’s top FTSE 250 stocks, rising by more than 90% to last night’s 1,638p amid the strength of its North American exposure.
The material step-up in operational and financial performance seen in 2023 and into the first half continued in today’s trading update, underpinned by a record order book.
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The performance prompted broker Peel Hunt to roll its price target to 1,980p, but investors had other ideas after taking the opportunity to lock in profits as the company said activity levels remained weak in the European residential and commercial sectors.
Shares slumped to the bottom of the FTSE 250 index, down 174p to 1462p.
They were joined on the fallers board by WH Smith (LSE:SMWH), which fell 68p to 1233p even though annual results included a 16% rise in total dividend for the year to 31 August.
This includes a final dividend of 22.6p worth about £30 million, which is due to be paid on 6 February. The move follows a £50 million share buyback announced in September,
Chief executive Carl Cowling said the new financial year had started well, having grown headline profits by 16% to £166 million in 2023-24.
A strong peak season meant the UK travel division’s trading profit rose 20% to £122 million, while the North America figure rose by £5 million to £54 million as WH Smith continues to expand its offer in airports including Dallas, Denver and Washington Dulles.
Having touched their high for this year in late September, the shares have fallen from 1,497p to today’s 1,232p.
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Premier Foods (LSE:PFD) shares have experienced a strong year, rising 40% as stronger cash flow helps the Mr Kipling and Ambrosia firm to invest in the business and to make acquisitions.
It continues to report volumes and value market share gains, with today’s results showing headline revenues up 4.6% to £498.7 million and adjusted profits 8.9% higher at £61 million.
The shares were broadly unchanged at 188p today but Peel Hunt analysts believe the shares offer good value on 14 times forecast earnings. They increased their price target to 230p.
On the FTSE 250 risers board, FirstGroup (LSE:FGP) accelerated after a tough year for the UK-based bus and rail operator’s shares. Today’s half-year results showed a robust performance, with adjusted operating profit of £100.8 million ahead of expectations and a year earlier.
It is planning a £10 million dividend for payment on New Year’s Eve, representing a 13% rise to 1.7p a share alongside an additional £50 million buyback of shares.
Current trading is slightly ahead of forecast, with the company still expecting a First Bus margin of 10% later this year as it manages the transition from the £2 fare cap to £3 in January and the impact of the increases in employers’ national insurance.
The shares of infrastructure services firm Kier Group (LSE:KIE) also surged in the FTSE 250 index after it eased any fears of UK election disruption by reporting a current order book worth £10.9 billion.
This is slightly higher than the June year-end, providing a higher degree of certainty for the group at about 95% of forecast 2025 revenue.
Chief executive Andrew Davies told shareholders: “We are well positioned to benefit from UK government infrastructure spending plans into areas where Kier offers market-leading services.
“These strong structural drivers and further investments will allow us to further generate shareholder returns.”
Having restored payments earlier this year, the group is scheduled to pay a full-year dividend of 3.48p on 29 November. The award follows three years of operational and financial progress, with shares now up 150% in the period since November 2022.
They rose 10.8p to 150p after today’s update, but Panmure Liberum has a target of 250p after noting a valuation still at a 50% discount to peers on six times forecast earnings. It said: “Kier’s AGM update provides further evidence that the business is in good shape.”
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