FTSE 250 round-up: Aston Martin, takeovers, multi-year highs
There’s been plenty of action in the mid-cap space, with some decent gains among a number of players. City writer Graeme Evans runs through the highlights.
24th July 2024 15:43
by Graeme Evans from interactive investor
A “pivotal moment” for Aston Martin Lagonda (LSE:AML), the takeover of Cannes Lions firm Ascential (LSE:ASCL), and further progress by Greencore (LSE:GNC) and Volution (LSE:FAN) today fired up FTSE 250 buyers.
The Warwickshire-based luxury car maker rose 14.1p to 164.1p after executive chair Lawrence Stroll said full-year and medium-term turnaround targets remained in place, fuelled by second-quarter figures showing growth in average selling price and gross margin.
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He hailed progress on the company’s “immense” product transformation, which has seen the end of core models and the ramp up in production of the new Vantage, upgraded DBX707 and upcoming V12 flagship sports car.
Half-year losses widened to £216.7 million but the performance was better than City forecasts as Stroll also stuck by expectations for positive free cash flow before the year end.
Other recent developments have included a £1.15 billion refinancing on new five-year terms, while existing lenders have shown their support through an upsized revolving credit facility.
Stroll said: “As we commence an exciting second half of 2024, Aston Martin is at a pivotal moment in its journey.”
Despite today’s improvement, the shares are still down by 25% this year and far short of the 385p seen last summer.
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Ascential shares led the FTSE 250 risers board after its board backed a 568p a share takeover offer from FTSE 100-listed business information group Informa.
The £1.2 billion swoop for the host of fintech events under the Money20/20 brand is priced at a 53% premium to Monday’s price and a multiple of 16 times forecast 2025 earnings.
Broker Peel Hunt said: “We believe this is a strong offer, limiting the likelihood of competitors entering the fray.” The deal brings more market-leading brands under the ownership of Informa, which operates four divisions including in academic publishing through Taylor & Francis.
The strong run for Volution shares continued after the building ventilation products business said earnings for the year to 31 July will be slightly ahead of current market forecasts.
It continues to benefit from strong demand in UK residential due to the ongoing heightened awareness of the health risks associated with mould and condensation.
New build revenues have also benefited from regulations driving housebuilders towards adopting more sophisticated low-carbon and energy-efficient ventilation solutions.
Volution, which this year marks a decade on the stock market, also reported strong cash generation and ample headroom to continue its record of earnings-accretive acquisitions.
Shares rose 15p to 523p to prices not seen since early 2022, extending gains for this year to more than 20% after Volution also reported a sharp half-year improvement in European revenues growth.
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Greencore lifted another 4.8p to 184.6p, continuing the recovery that has seen its shares almost double in value this year to a post-pandemic high.
The latest improvement came as the food-to-go firm upgraded full-year guidance on the back of third-quarter results, which showed a 1.4% rise in like-for-like sales against strong comparatives.
Having completed the return of £50 million to shareholders in a two-year buyback programme, the group is planning to announce its first dividend in more than four years when it posts year-end results in November.
Greencore supplies all the major supermarkets through 16 manufacturing sites, making 779 million sandwiches and other food-to-go items in the last financial year. It is also the market leader in Italian ready meals and own-label ambient cooking sauces.
Praising the strategic thinking and execution of a management team led by former Morrisons’ boss Dalton Philips, Shore Capital said the Greencore equity story “has the ingredients to become bigger, better and more rewarding” for its shareholders.
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