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BHP (BHP), Cranswick (CWK), QinetiQ (QQ.), Abrdn (ABDN), Elementis (ELM), Premier Foods (PFD), 4imprint (FOUR), Marston’s (MARS), Shoe Zone (SHOE) and XP Power (XPP)
BHP (BHP) has reported better production from the world’s largest copper mine, Escondida, and consistent output from the iron ore division in a first-half operational update. The miner has now guided to the “upper half” of guidance for the full financial year, ending 30 June, for iron ore. This would be up to 265.5mn tonnes, compared to 260mn tonnes the previous year.
Copper guidance remains at 1.8mn-2mn tonnes, as output from Escondida rose by 22 per cent but production fell elsewhere. RBC Capital Markets analyst Kaan Peker said lower metals prices would likely bring on reductions in full-year earnings forecasts. “Overall, [this was] a good operational performance despite key assets being impacted by wet weather, power outage and strike,” he said. Australian iron ore and coal mines were hit by wet weather, while Escondida’s better production came despite a strike. AH
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Cranswick buys pig genetics business
Cranswick (CWK) reported an in-line third quarter trading update and the acquisition of a pig genetics company in East Yorkshire, JSR Genetics, for an undisclosed sum.
The pork and poultry producer also said that its processing site in Norfolk has had its export licence to China reinstated after a four-year hiatus.
Analysts at RBC Capital Markets said Cranswick has good long-term growth opportunities but that these “are already reflected in its current valuation”. MF
Read more: Is Cranswick a 'goldilocks' stock?
QinetiQ hit by UK fiscal volatility
QinetiQ (QQ.) shares tumbled 12 per cent in early trading after the defence technology specialist blamed “the fiscal environment” for a slower-than-expected order intake in the UK.
The company has had to reassess capabilities at its UK intelligence arm, though trading in its domestic defence business has been strong. Despite challenges in the US market, QinetiQ said that “order intake remains robust with stable revenue” at its global solutions business.
Management maintained both annual and medium-term guidance. The board expects organic revenue growth in the high single digits this year, along with a stable margin and high cash conversion. Further out, guidance is for £2.4bn of organic revenue at a 12 per cent margin by 2027. CA
Flows turn positive at Abrdn
Customer inflows have returned at Abrdn (ABDN), causing shares to climb by more than 5 per cent in early trading.
The FTSE 250 asset manager achieved a net inflow of £1.2bn in the final quarter of 2024, compared with a net outflow of £5.7bn in the final quarter of 2023. This was driven by a pick-up in investment demand – particularly for alternatives, quantitative strategies and liquidity funds. Equities are still struggling, however. Management blamed this on the popularity of passive strategies and “challenging” conditions in Asia.
Assets under management and administration sat at £511bn at the end of 2024, compared with £495bn at the end of 2023. This was 1 per cent better than analysts expected.
Abrdn said adjusted operating profit for 2024 is still expected to be in line with market expectations at £248mn – roughly in line with last year. JS
Elementis upgrades its profits outlook
A strong fourth quarter for specialty chemicals company Elementis (ELM) meant the company upped its full year profit expectations range to $126-128mn (£104-106mn), an approximately 4 per cent upgrade. The market responded by bidding up the shares 6 per cent in early trading.
A combination of higher volumes and easing price inflation in its supply chains meant the company’s operating margin came in at a much higher 17 per cent (2023:14.6 per cent). Management also noted that its net debt has fallen below $160mn, which translates into an operational gearing of 1 times cash profits, down from 1.5 times at this point last year.
Elementis will announce its full year 2024 results on 6 Mar. JH
Outlook improves for Premier Foods
Premier Foods (PFD) expects trading profit to be “at the upper end” of analysts’ expectations after a solid third quarter in which sales exceeded expectations. Group sales were up 3.1 per cent, but sales of branded products were up 4.6 per cent on volume growth of 7 per cent, which it attributed to market share gains.
Chief executive Alex Whitehouse said Christmas sales were helped by a 20 per cent uplift in Mr Kipling-branded mince pies.
Joint house broker Peel Hunt nudged up its earnings forecast from 13.1p to 13.4p. The shares rose by 6 per cent in early trading to 189p. MF
4imprint eyes 2024 profit consensus beat
Shares at 4imprint (FOUR) rose more than 4 per cent this morning after the promotional goods company said 2024 profits were likely to sit above the upper end of analysts’ expectations.
Unaudited pre-tax profit for the year to 28 December is expected to be at least $153mn (£125mn), while there was a 3 per cent rise year-on-year on group revenues of $1.37bn.
Total order count and average order value for the year were both 2 per cent higher as existing customer orders rose 5 per cent. New customer orders fell 9 per cent, however, which the company attributed to ongoing economic uncertainty.
The gross profit margin was broadly stable at around 32 per cent, with the operating profit margin reaching double-digit levels. Cash levels at year-end were $148mn, up from $105mn a year earlier, despite a $20mn investment to expand its Oshkosh distribution centre. VM
Marston’s strong Christmas buffeted by bad weather
Pub operator Marston’s (MARS) reported like-for-like sales growth of 2 per cent for the four months to 18 January, with strong trading over Christmas offset by poor weather either side of the festive period.
In the five key trading days encompassing Christmas Eve to Boxing Day, and New Year’s Eve and New Year’s Day, like-for-like sales were up 11 per cent. The company said it was still on track to meet full-year expectations, with the analysts’ consensus for underlying pre-tax profit this year standing at £68.3mn.
The shares fell by 3 per cent. MF
Find out why we’re bullish on Marston’s
Shoe Zone slashes dividend payout
Shoe Zone (SHOE) reported a 38 per cent fall in pre-tax profit to £10.1mn for its September year-end.
The drop was down to a “challenging second half trading environment”, which it blamed on bad weather, higher shipping and energy prices and higher wage costs. Depreciation costs were also higher given the ongoing restructuring of its store estate, which saw 27 new stores opened, 28 refitted and 53 closed.
The dividend was slashed to just 2.5p a share, from 17.4p a year earlier, which the company deemed “prudent” as net cash fell from £16.4mn to £3.6mn at year end. The shares fell by 6 per cent. MF
XP Power’s revenue struggles
XP Power (XPP) shares fell 8 per cent in early trading after the electronics power control components manufacturer disclosed that fourth quarter revenue came in flat against the previous three months and flagged lower orders from the semiconductor manufacturing equipment sector.
The company said in a full-year update that its annual revenue was down by 22 per cent and by 26 per cent in the fourth quarter, year-on-year. Management highlighted continued destocking in the industrial technology and healthcare sectors, and slower-than-expected demand from Asia.
The board expects its 2024 adjusted operating profit to be in line with the company-compiled analyst consensus of £25.1mn-£27.6mn, a downturn from the £38.1mn posted in 2023 and weaker than previous guidance. CA
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