CRH (CRH), Cranswick (CWK), AO World (AO.) Big Yellow (BYG), Workspace (WKP), Capita (CPI), UK Commercial Property Reit (UKCM), Knights (KGH), Videndum (VID), Schroder Reit (SREI), Accsys Technologies (AXS), Eckoh (ECK) and Avon Protection (AVON)
Building materials group CRH (CRH) is spending $2.1bn to buy a cement plant, port terminals and 20 concrete plants in Texas from Martin Marietta Materials (US:MLM).
The Dublin-based company, which recently moved its primary listing to the US, said the plants served markets around Austin and San Antonio and would add around $170mn to this year’s cash profits. The company also reported an 8 per cent increase in third quarter sales to $26.3bn and a 14 per cent increase in cash profit to $4.8bn. It plans to increase its dividend for 2023 by 5 per cent to $1.33 per share. The shares rose by 2 per cent in early trading. MF
Cranswick raises profit forecast after strong half
Food producer Cranswick (CWK) expects its full-year adjusted profits to come in at the upper end of the market consensus range of £153mn-£161mn, after it delivered a robust performance in the 26 weeks to 23 September and pointed to continuing strong demand as it looks ahead to Christmas trading.
Interim revenues were up 12.3 per cent to £1.25bn on the back of higher prices at key divisions, with sales at the core UK business rising 16.1 per cent on last year and volumes 2.7 per cent higher. Operating profits rose 42 per cent to £90.8mn, while the interim dividend was increased by over 10 per cent to 22.7p per share. The shares rose by 2 per cent in early trading. CA
The valuation bump in Big Yellow’s (BYG) results for the six months to 30 September flatter it somewhat. The £67.2mn gain in the value of the self-storage landlord’s properties reversed the valuation drop caused by last year’s interest rate spike. The result is a big swing in IFRS pre-tax profit from £6.75mn to £120mn.
Meanwhile, on an EPRA basis, things are less spectacular. Earnings per share, which strips out valuation changes, fell slightly because of increased costs and more issued shares. The rise in empty units is also beginning to look questionable. Though 81.4 per cent occupancy is in line with its peers, investors should note that the figure has fallen gradually from 85.2 per cent on 31 March 2021 and that the story is similar for its rival Safestore (SAFE). Shares rose 3 per cent in early trading. ML
Capita plans sweeping job cuts
Shares in outsourcing group Capita (CPI) rose by 9 per cent this morning, following the announcement of up to 900 redundancies. The group said the job cuts, which will primarily impact indirect support function and overhead roles, will deliver cost savings of £60mn on an annualised basis from the first quarter of 2024. Capita was previously targeting £40mn of cost savings a year in a bid to double its operating margin to 6 per cent.
The redundancies are expected to have a one-off cost impact of £27mn in 2023, but the cash impact will not be felt until 2024. JS
Knights reassures the market
Legal services firm Knights (KGH) is on track to hit its profit forecasts despite a “challenging backdrop in the housing and M&A markets”. The group returned to low single-digit organic growth in the six months to 31 October, fueling a 28 per cent rise in adjusted profit before tax to £11.5mn. Knights’ debt is still rising, however, up 31 per cent since the end of last year at £38.8mn. JS
Schroder Reit’s shares fall as NAV sinks
Schroder Reit’s (SREI) share price dropped 5 per cent in early trading after the commercial property landlord’s value continued to fall due to high interest rates. Net asset value (NAV) slid 19.1 per cent to 60.5p on 30 September from 74.8p last year.
However, net rental income increased due to “new tenant demand” across its portfolio of warehouses, offices, and retail assets. The company said it was “a time of continued uncertainty for the UK real estate market due to elevated inflation and interest rates, together with further geopolitical instability”. ML
Risings costs cause Eckoh’s earnings slump
Eckoh’s (ECK) pre-tax profit halved in its results for six months to 30 September after a rise in costs slashed its already thin margins. The payment security provider also posted a 4 per cent drop in revenue. though its North American arm fared better, with a 22 per cent increase in annual recurring revenue.
Chief executive Nik Philpot said it had made “excellent progress with our strategic goals”. “North America is our most significant target market,” it added. ML
Severfield firms up bottom line
Structural steel specialist Severfield (SFR) reported an 8 per cent increase in pre-tax profit to £11mn for the six months to 23 September, despite an 8 per cent slide in revenue to £215mn. Contributions from its recently-acquired Dutch business, Voortman Steel, helped to underpin its bottom line. The company said market conditions remain challenging, with many clients delaying prospective projects until the economic outlook picks up. It maintained full-year guidance, though. Severfield’s shares slipped by 3 per cent. MF