Babcock ‘momentum’ | easyJet | SSE | Kier
Engineering group Babcock which is building frigates on the Clyde, said statutory operating profit for the year to the end of June fell to £45.5 million from £226.8m last time due to a loss on disposal and related items and the £100.1 million Type 31 loss, announced in the April trading update.
Revenue is up 8% to £4,438.6 million, up 10% organically, with growth across all sectors
David Lockwood, chief executive, said:”We’ve made excellent progress this year, with better-than-expected cash generation, margin expansion and double-digit revenue growth.
“When we started our transformation, my first goal was to stabilise and strengthen the balance sheet and I’m delighted to say that work is complete. Babcock is now a higher-quality, lower-risk and more predictable business, with a clear focus on execution.
“In a world of significant instability, national security has never been more important. With defence making up two-thirds of the Group, the combination of capability, availability and affordability we offer is increasingly relevant.
“I’m excited by the momentum building across the business, and that confidence is reflected in our expectation of continuing cash-backed profitable growth, and reintroducing a dividend in FY24.”
EasyJet posted a pretax profit of £203 million for its third quarter as ticket yields soared 22% year-on-year on the back of an ongoing rebound in summer travel demand.
It said it expected to report record pretax profit for the July to end of September period, as costs per seat flattened with oil prices stabilising.
However, chief executive Johan Lundgren warned about the potential impact of limited airspace availability and air traffic control strikes in Europe.
“We are absolutely focused on mitigating the impact of the challenging external environment on our customers and flying them on their well-earned holidays,” he said in a statement.
Energy firm SSE said renewables performance in Q1 was lower than planned, reflecting dry and still weather patterns well below the long-term average, equating to a 5% shortfall on planned renewables output for the year.
However, the key months in SSE’s financial year are still to come and the first few weeks of Q2 have so far seen a return to more normal weather.
SSE therefore continues to expect to report full-year 2023/24 adjusted earnings per share of more than 150p, on the basis of a return to more normalised weather, and plant performance and market conditions continuing in line with expectations.
Construction firm Kier said its year end order book continues to be above £10bn and revenue and profit are expected to be in line with expectations.
It has seen a strong operational performance despite inflationary pressure. The company remains confident it can continue to mitigate these pressures going forward.
Andrew Davies, chief executive, said: “The group has delivered another year of strong operational and cash performance. We have now completed the second year of our medium-term value creation plan.
“This plan has embedded bidding discipline and risk management into the business and is allowing us to maximise value and convert the many high quality and profitable opportunities in our chosen markets, which remain favourable.
“We have also strengthened our balance sheet and grown our order book despite the uncertainty in the wider economy. These factors give the Board confidence in the continued success of the group.”
Battery manufacturer AMTE Power is facing administration and its shareholders losing their investments unless it can secure additional funding in the next few days.
The FTSE 100 climbed 57.85 points, or 0.8% to a two-month high of 7,646.05 on the back of a rally among commodity-focused stocks.
Support from stronger metal prices, strengthened on news that China’s government was looking at further measures to prop up its property market, lifted Glencore 19p, or 4.2%, to 472.5p and Antofagasta by 39.5p, or 2.7%, to 15.26p.
Other Asia-focused stocks were higher, including Burberry, which closed up 44p, or 2% at 2238p, while HSBC put on 11.25p, or 1.8%, to 640p and Prudential rose 11.5p, or 1.1%, to 1076p.
Whisky and Guinness group Diageo suffered a loss of 47p, or 1.4%, to 3400p as Morgan Stanley’s concerns that the company will face weaker than expected sales in the United States prompted its analysts to issue an “underweight” rating.
Baillie Gifford owned Scottish Mortgage Investment Trust slipped 15.5p, or 2.2%, to 696.5p as Netflix and Tesla, in which it has stakes, posted underwhelming second-quarter results.