Shares round-up: results boost optimism at these winners

Turnaround progress by Renishaw (LSE:RSW), NCC Group (LSE:NCC) and the dividend-paying Kier Group (LSE:KIE) today put their shares in the spotlight alongside a rejuvenated Trainline (LSE:TRN).

The FTSE 250 index rose 1%, led by the online rail ticketing firm’s jump of 26.2p to 326.4p after it revealed the benefit of increased competition between rail carriers in Europe.

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Net ticket sales hit £3 billion in the six months to the end of August, an underlying increase of 14% that beat its full-year guidance range for growth of between 8% to 12%.

UK sales were £2 billion, 15% higher as industry e-ticket penetration reached 51% and it saw a reduced strike impact. In Spain, the company has tripled net ticket sales in the last two years as overall revenues rose 16% to £229 million.

Shore Capital had a price target of 450p before today’s update, noting Trainline’s unmatched presence in the UK market and the increasing digitisation of the industry.

The broker said: “Additionally, there is a market share opportunity developing from Europe and inbound foreign travel. This is driven by increased carrier competition and complexity.”

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Trainline was joined on the FTSE 250 index risers board by Polar Capital Technology Ord (LSE:PCT) Trust after the shares of leading portfolio company NVIDIA Corp (NASDAQ:NVDA) surged 8% last night.

The trust’s AGM also approved a 10 for 1 share split, a move intended to assist regular savers and those who are looking to invest small amounts. Shareholders will receive 10 new shares for every existing share held, which means the price for each share will drop from around £29 to £2.90.

Renishaw shares have lost a fifth of their value in the past six months, part of a de-rating from their peak above 6,000p in 2021.

They moved 95p higher to 3,395p after today’s annual results as the precision engineering firm highlighted continued improvement in demand for its encoder products from the semiconductor manufacturing sector.

This and the pursuit of growth opportunities in metrology and additive manufacturing systems means the Gloucestershire-based company expects to achieve solid revenue growth in the new financial year.

Revenues rose 0.4% to a record £691.3 million in the year to 30 June but adjusted profit fell 13% to £122.6 million, within previous guidance but short of the City consensus of £127 million amid currency moves and higher staff costs.

Inflationary pressures are a near-term headwind, but it reiterated longer-term ambitions for high single-digit revenue growth through the cycle and for margins to improve from today’s 15.7% to above 20%.

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Peel Hunt believes the company’s targets are achievable as it reiterated its Buy recommendation and left its price target of 5,000p unchanged.

NCC shares are also sharply down on where they were in 2021, although the past year has shown improvement as the cyber and software resilience business works on a plan to simplify operations and align with the needs of its customers.

The former FTSE 250 company surged another 17.8p to 169.4p in today’s session as it said operating profit will be £6 million in the four months to 30 September, up from its previous guidance of £3.5 million.

NCC has seen strong demand for its cyber security capabilities during what’s typically a quiet period for sales, while its restructuring efforts have boosted the margin.

Shore Capital reiterated its Buy recommendation and 190p price target ahead of carrying out a fuller review of its forecasts. The broker said: “We are encouraged by today’s update and the overall turnaround/growth prospects.

“Our view remains that chief executive Mike Maddison and chief financial officer Guy Ellis appear to be a stroke of luck for long-time NCC shareholders, sorting out issues that have historically hamstrung the business and stepping up the pace of execution."

One company whose turnaround is well advanced is FTSE 250-listed Kier, having grown its order book by 40% over the past three years and exceeded its medium-term 3.5% margin target in today’s annual results.

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Revenues rose 17% to £4 billion as the infrastructure services and construction firm benefited from its focus on contracts with the UK government, regulated industries and blue-chip customers. Adjusted profits rose 13% to £118.1 million and earnings per share by 7% to 20.6p.

With 90% of 2025 revenues already secured, the company backed up its confidence by announcing plans to pay a dividend of 3.48p on 29 November. It restored payments earlier this year with an interim award of 1.67p.

Chief executive Andrew Davies, who was appointed in 2019, said: "The past three years have seen the group achieve significant operational and financial progress.”

He backed Kier to benefit from UK government infrastructure spending commitments, adding that he expected a continuation of the strong cash generation seen over the last two years.

Shares opened higher but later retreated to stand 9.6p lower at 140.6p. They have risen 60% in the past year, but Panmure Liberum values the shares at 250p amid the strong order pipeline and supportive political environment.