Despite a strong couple of weeks, the mid-cap index has struggled this session, but a trio of popular companies have attracted buyers. Our City writer names them here.
The better-than-expected second quarter performance helped shares add another 12.8p to 353p, having doubled in value this year as investors appear increasingly confident that the turnaround led by executive chair Lawrence Stroll has staying power.
The outlook has been boosted by expectations that medium-term financial targets such as £2 billion of revenues and £500 million of adjusted earnings should be within grasp by 2024 and beaten in 2025 as long as there’s continued trading momentum.
Balance sheet concerns are also easing as positive free cash flow from next year is expected to reduce the net debt to earnings ratio to 1.5 times by 2024-25.
Operational highlights have included the debut of DB12, which is sold out for the rest of the year after its launch at May’s Cannes Film Festival as the first of the company’s next generation sports cars.
The profile of the brand has been given a significant boost by the success of the Aston Martin Aramco Cognizant F1 team, which is currently third in the constructors’ standings.
Stroll said: “Although we may only be halfway through the year, 2023 has already proven to be a remarkable year in which Aston Martin has shone brighter than ever. ”
- ii view: Rolls-Royce shares rocket 20% after blockbuster update
- Stockwatch: a share with 45% potential upside and yielding over 4%
- Daily Trading Flash: 10 most-traded shares 26 July 2023
In today’s results, half-year revenues rose 25% to £677.4 million as a 14% increase in average selling price to £212,000 was accompanied by higher volumes of the DBX707 in the ultra-luxury SUV segment. Geographically, the Americas was the strongest and largest region after accounting for 36% of wholesale volumes.
Adjusted earnings rose 38% year-on-year to £81 million, while the half-year loss narrowed to £142 million from £285 million due to lower year-on-year net financing charges.
Guidance for the rest of this year is unchanged, including for an significant increase in fourth-quarter adjusted earnings to reflect the timing and contribution of new product launches.
Today’s share price compares with 103p in September’s heavily discounted £650 million rights issue and the 1,900p in Aston Martin’s £4.3 billion stock market debut in October 2018.
Elsewhere in the FTSE 250, shares in Egypt-based gold miner Centamin (LSE:CEY) rose 4.1p to 97.65p after second-quarter production exceeded City forecasts with 8% quarter-on-quarter growth.
The company, whose Sukari mine has produced over five million ounces of gold since 2009, benefited from a 3% rise in the average realised price to $1,936 an ounce as half-year revenues lifted 11% to $425.6 million (£329.6 million).
With unit costs down by more than expected, pre-tax profits rose 35% to $114 million (£88.3 million) in the first six months of 2023.
Chief executive Martin Horgan said the results marked Centamin's third consecutive six-month period of improved underlying earnings. He added that a stronger balance sheet put the company in a robust position for the next stage of its growth, including further optimisation at Sukari and continued development of the Doropo project in Côte d'Ivoire.
Peel Hunt, which has a price target of 135p, said the results showed 2023 as the year that recent investments in Sukari start to bear fruit.
- Sector Screener: plenty of good reasons to buy these unloved stocks
- UK bank sector results preview Q2 2023
- Dividend news keeps Games Workshop shares on track to hit record high
One of the least surprising developments in today’s session concerned Primary Health Properties (LSE:PHP) after a robust performance by the GP surgeries landlord.
Primary is liked by income investors due to the predictable cash flows that underpin its progressive dividend policy, which is now in its 27th year of growth after distributing 3.35p a share in the first six months of the year.
This is equivalent to 6.7p on an annualised basis, an increase of 3.1% on 2022. A third quarterly interim dividend of 1.675p is due to be paid on 18 August.
Most of Primary’s facilities are GP surgeries, with other properties let to NHS organisations, HSE in Ireland, pharmacies and dentists. This means about 90% of rent is funded by the UK and Irish governments.
The value of the property portfolio remains broadly unchanged at just under £2.8 billion across 513 assets, with a rent roll of £147.4 million. Reviews during the period saw an annualised uplift of 4.4%, generating about 1.5% rental growth in the period.
Shares rose 2.8p to 97.4p but Peel Hunt has a price target of 115p, noting a dividend yield of 7.1%. It highlights that one of the sector’s most secure revenue streams is complemented by a debt book that is 97% hedged with an average maturity of almost seven years.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.