Investegate's Across the Markets, 27th February 2025
The company best known as an outsourcer of government contracts published full year results this morning.? Revenues were in line with guidance and efficiency gains have resulted in modest margin improvements, too. Debt is lower than had been previously forecast and although there will be some downside pressure on revenues owing to the loss of immigration contracts in the UK and Australia, efficiency gains plus a sloid order book are expected to offset any headwinds from underlying operating profits. The Serco share price was just over 4% higher in early trade.
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The FTSE-250 listed building supplies company Howden saw its share price under pressure on Thursday morning after the publication of full year results. That’s despite the declaration of a ￡100m share buyback, with investors instead left looking at management claims that the market will see pressures in 2025, from both sales and rising cost. The company also benefitted from an additional two trading days in H1 FY24 which will not be seen this year. With gross margins also 80bps higher the market reaction may look a bit overdone but the Howden share price is down around 6% shortly after the open.
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Shares in the aerospace and defence company Rolls Royce surged this morning following the publication of full year results that included news of dividends being reinstated, a ￡1bn share buy back and guidance being upped. Underlying operating profit targets which had been set for 2027 are now set to be achieved in 2025, with the strong momentum forecast to continue in the mid-term. The Rolls Royce share price was up 15% by 8.30am.
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