Companies roundup: Haleon, Vistry & Brooks Macdonald

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Vistry avoids a fourth profit warning

Vistry (VTY) broke its run of profit warnings this morning, confirming that it would deliver its revised profit before tax figure of £250mn.

The housebuilder is also undergoing a restructuring, reducing reporting lines to chairman and chief executive, Greg Fitzgerald. Following the discovery of cost issues at the South Division, the company has implemented a series of “control enhancements” including a tightening of procedures around the monthly site reviews. These measures have been applied to the whole group, though the company insisted that it believed that the issues were confined to the South Division.

Last year, the company shocked the market with three profit warnings. Cost issues emerged at the South Division, resulting in a £105mn hit to profits in 2024 and £50mn in 2025. More bad news came on Christmas Eve, with the housebuilder wiping a further £50mn of its profit before tax due to sales taking longer to complete.

Vistry also reaffirmed its confidence in the partnerships model, despite registered providers facing challenging conditions. Anthony Codling, analyst at RBC, said that questions for investors still remain. “The Group is pointing to challenging market conditions and is currently restructuring the organisation, which adds execution risks,” he said. “The other unknown is the shape, scale and timing of the previously headline-grabbing £1bn shareholder return.”

Vistry’s shares rose 7.8 per cent, though they remain down 43 per cent on an annual basis. NV

Brooks Macdonald set to join the main market

Brooks Macdonald (BRK) plans to move from Aim to London’s main market to “enhance the group’s corporate profile and extend the opportunity to own its ordinary shares to a broader group of investors”. The change should take place by the end of March.

The asset manager said outflows remained elevated in the final quarter of 2024, but gross inflows improved quarter-on-quarter. The positive impact from markets was also less than expected. JS

Genus rises on strong first half performance

The market rewards a positive update from animal genetics company Genus (GNS) with a 15 per cent share price rise in morning trading, as management outlined a better-than-expected result in an update for the first half.

When currency headwinds are considered, management is now forecasting adjusted profits before tax of at least £35mn. Genus seems to have benefited from volume improvements in its pig genetics business in the US and Asia after a difficult period marked by destocking and swine flu.

Genus will announce its interim results for the six-month period from 1 Jul 2024 to 31 Dec 2024 on 27 Feb. JH

Currys lifts profit guidance

Currys (CURY) said full-year profit is likely to come in ahead of expectations after a decent Christmas trading period.

Like-for-like sales for the 10 weeks to 4 January were up 2 per cent, as “strong” sales of mobile, gaming and premium computing products offset weaker demand for TVs.

Adjusted profit before tax is therefore expected to come in at between £145mn-£155mn, or between 23-31 per cent higher than last year. Currys also expects an increase in free cash flow for the current financial year, which will allow it to offer a final dividend of 1.3p. It also highlighted the “growing visibility” of increasing cash flows in future years. The company’s shares jumped 11 per cent. MF

Fortress increases Loungers offer

The private equity firm that submitted a bid for hospitality group Loungers (LGRS) in November has upped its offer in an attempt to get the deal over the line.

Fortress Investment Group had initially offered 310p per share for Loungers, which valued the chain of 280 restaurants, bars and roadside cafes at £350mn, or 5.4 times FactSet consensus cash profit forecasts.

Although the board recommended the offer, a number of shareholders had opposed the deal. Fortress has now made an “increased and final cash offer” of 325p, which has again been recommended by the board.

The new bid is a premium of 36.6 per cent to the company’s share price on the day before the original offer was made. MF

Asos to mothball large US distribution hub

ASOS (ASC) is to take a £190mn hit to its profits after it decided to mothball the

the 1mn sq ft distribution centre it opened in Atlanta six years ago.

The company said it “remains excited about the opportunity in the US” but would serve the market primarily from its UK fulfilment centre in Barnsley, plus a smaller site in the US.

Despite the impairment, the company said that the effect on cash flow would be “broadly neutral” and that it expects an annualised benefit of £10mn-£20mn to its adjusted cash profit from 2026 onwards. The company’s shares rose by 1 per cent. MF

Pubs enjoy Christmas cheer

Pub groups Mitchells & Butlers (MAB) and Fuller, Smith and Turner (FSTA) traded well over the Christmas period. M&B reported 10.4 per cent like-for-like growth over the core three-week period and by 3.9 per cent over a longer 15-week period to 11 January, with bad weather proving a drag in recent weeks.

“Growth was particularly strong on festive key dates supported by volume growth, and with record sales on Christmas Day,” said chief executive Phil Urban.

Fullers’ chief executive Simon Emeny also pointed to a “really strong” Christmas, with like-for-like sales up 10.2 per cent over the five weeks covering the festive period.

M&B shares were up 4 per cent, while Fullers’ shares were up 1 per cent. MF

Bulk annuity business booms at Just Group

Shares in Just Group (JUST) climbed 6 per cent in early trading after the life insurer reported a surge in new business, helped by a thriving bulk annuity market.

Shareholder-funded new business sales rose by 36 per cent to £5.3bn in 2024. Analysts only thought sales would reach £5bn, but bulk purchase annuity transactions proved more abundant than expected. Just Group completed 129 such transactions during the year – “an all-time single year record for the industry”.

Analysts at Peel Hunt argue the outlook for new business sales “remains very positive” but they expect margins to slip due to increased competition. Just Group intends to publish its full-year results on 7 March. JS

Hays warns of profit at lower end of consensus

Hays (HAS) warned operating profit for the first half of its financial year is likely to be at the lower end of market expectations as difficult hiring market conditions globally persist.

The FTSE 250 recruiter said it expects pre-exceptional operating profit of £25mn for the six months to 31 December, which sits at the lower end of the analyst consensus range of £24mn to £33.2mn.

Like-for-like group net fees were 12 per cent lower year-on-year, with temporary and permanent recruitment down 7 per cent and 19 per cent, respectively. There were double-digit declines across all geographies. VM

LondonMetric shuffles portfolio

LondonMetric (LMP) announced this morning that it had sold ten non-core properties for £74.2mn, reflecting a net initial yield of 6.9 per cent.

Among the assets sold were a retail park, two offices in Coventry and an office in Yarnfield. LondonMetric has sold 65 assets for £307mn since 31 March 2024 at a 2 per cent premium to book value.

The Reit also announced that it had acquired seven properties for £50.1mn, reflecting a net initial yield of 6.5 per cent. It added that this was expected to rise to 7.2 per cent over five years. It bought four Travis Perkins trade warehouses, a Premier Inn hotel in West Thurrock, a retail property in Andover and an M&S food store. NV

Serco secures $247mn US Army contract

Serco (SRP) has been awarded a $247mn (£203mn) contract to improve the fitness of US Army soldiers. The contract starts immediately and will last eight months, with the option to extend for up to four years.

Under the deal, the outsourcing company will work with 45 US Army brigades across 15 locations in the US to improve soldier readiness, physical and non-physical performance, reduce injury rates and provide post-injury rehabilitation. VM

Frontier Developments booms on strong half-year results

Frontier Developments (FDEV) shares surged by a quarter in early trading after the Aim-traded video games developer reported its “third-highest festive sales performance” after the pandemic-supported years of 2020 and 2021 and slashed costs.

For the six months to 30 November, total revenue was flat at £47.3mn but underlying sales climbed 19 per cent. The Planet Coaster 2 game delivered more than a fifth of total sales despite its release coming less than four weeks before the end of the trading period.

The company pivoted to a pre-tax profit of £4.4mn from a loss of £33.1mn in the comparative period as it slashed adjusted research and development costs by 21 per cent and sales, marketing and admin costs by 32 per cent. CA

Gateley commits to full-year consensus

Gateley (GTLY) said its full-year results are expected to be in line with market expectations after posting a rise in group revenues and underlying profits in the first half of its financial year.

Group revenue grew by 5.3 per cent to £86.4mn in the six months to 31 October, of which 3.2 per cent was organic. Underlying pre-tax profits ticked up by 5.9 per cent to £10.6mn on broadly stable margins, as staff utilisation rose from 83 per cent to 88 per cent.

Shore Capital analyst Jamie Murray said the full-year outlook is “within reach” given profits are weighted to the second half, but noted scope for upgrades is unlikely. Analyst consensus is for the firm to generate £184mn in revenues in 2025, up 6.8 per cent from the prior year. VM

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Companies roundup: Haleon, Vistry & Brooks Macdonald

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Why it’s crucial to split business and personal finances – and how to do it