This FTSE 100 trio have something for everyone

Whichever type of investor you are, today’s crop of company updates should be of interest. 

Growth, recovery and income investors were well served in the FTSE 100 today after updates from JD Sports Fashion (LSE:JD.), Compass Group (LSE:CPG) and Barratt Developments (LSE:BDEV) triggered share price rises.

The momentum of JD Sports was sustained by a successful share placing in which it added £464 million to its acquisitions war chest in readiness for more overseas expansion. Shares rose to 819.2p, but there are those in the City who see JD hitting £10 for the first time.

Catering giant Compass, whose shares had fallen 53% between February and the end of October, boosted its recovery today with more signs of margin improvement. The stock rallied 4% even though continued lockdown restrictions mean revenues are a third lower. 

Barratt Developments

Meanwhile, Barratt Developments shares rose 2% to 688p on the back of confirmation that it will give shareholders their first dividend in a year with the payment of 7.5p a share on 10 May. The housebuilder was also optimistic about current trading, which should come as relief for income investors who recall the 7% yield seen before the pandemic.

The company, which is targeting a full-year dividend based on earnings cover of 2.5 times, is already 95% forward sold for the financial year to June. The end of the Chancellor's stamp duty holiday on 31 March is a potential threat to progress, but there was encouragement that 11,588 homes in a forward sales book totalling £3.4 billion have been made for after that date.

• Shares for the future: four firms re-scored
• The shares a small-company star investor has been buying and selling
• Shareholder voting: how you can make a real difference

A record 9,077 home completions were recorded in the six months to 31 December, leading to a 10.1% rise in revenues and 1.5% improvement in earnings per share to 34.3p. Barratt ended the period with net cash of £1.1 billion, which is double the same period a year ago.

Chief executive David Thomas said: “Whilst we are mindful of the continued economic uncertainties, the housing market fundamentals remain attractive and our outlook for the full year remains in line with expectations.”

Compass

The focal point for Compass investors at a time of further restrictions has been on the operating margin, which improved to 2.7% in today's first quarter update from 0.6% previously.

Compass said it was making progress towards a more flexible cost base, including through contract renegotiations and resizing of the business. It has been encouraged by the level of new business wins in defensive sectors such as healthcare and said it expects to rebuild the group margin back above 7% even before it returns to pre-Covid volumes.

Shares rose 55.5p to 1,405p, which is close to the price target set by UBS analyst Bilal Aziz. He described today's update as reassuring: “While the market remains challenging Compass continues to execute on costs to support margins.”

JD Sports

The growth ambitions of JD Sports were in evidence again after last night's successful placing of new shares was completed at 795p, a 2% discount to Wednesday's closing price.

It is boosting its firepower at a time of significant disruption in the retail market, with the company eyeing a number of potentially attractive acquisition opportunities.

The group's global expansion has been a major factor in its underlying profits increasing from £100 million in 2015 to £439 million in the year to February 2020.

• Share Sleuth: this share has become too hot to handle
• What the GameStop saga means for markets
• Take control of your retirement planning with our award-winning, low-cost Self-Invested Personal Pension (SIPP)

The most recent deal came earlier this week when it struck an agreement to buy Baltimore-based shoe chain DTLR Villa for $495 million (£362.5 million). Other US acquisition have included Shoe Palace in December and The Finish Line in June 2018.

Peel Hunt analyst Jonathan Pritchard thinks the Manchester-based company may look to target new overseas markets, as well as bolster existing positions. He added: “The balance sheet is strong anyway, but some deals need acquirers to move quickly and the bigger the war chest the better.”

Pritchard has a price target of 1,000p and said the current price did not reflect the long-term opportunity.