FTSE 250 movers: Biffa cleans up, Travis Perkins wobbles

(Sharecast News) - The FTSE 250 was down 0.94% at 9,890.78 at 1515 BST.

Biffa shares were in the green, after the company reported record group statutory revenue of £1.44bn - up 39% on the 2021 financial year, and up 24% on 2020.

The FTSE 250 company said that was driven by organic recovery back to pre-pandemic levels, together with the contributions of Simply Waste, Company Shop Group (CSG), Viridor and the Biffa Polymers investments.

Organic growth and acquisition growth contributed a respective 22% and 17%.

Group adjusted EBITDA rose to £195m for the 52 weeks ended 25 March - up 41% on 2021, and up 12% on 2020.

Group operating profit improved to a loss of £8.3m, narrowing from a loss of £37.6m last year, and adjusted operating profit more than doubled to £96.6m from £44.2m year-on-year.

Travis Perkins was under the cosh after the DIY retailer said its Toolstation business swung to a loss in the first half as the pandemic boost faded.

In the six months to 30 June, group revenues rose 10.3% to £2.5bn, while adjusted operating profit dipped to £163m from £164m in the same period a year earlier.

Total revenue in the merchanting division grew 13.3% to £2.2bn, with adjusted operating profit up 9% at £170m. In Toolstation, however, revenue fell 4.6% to £376m and the business slumped to an £8m loss from a profit of £10m as DIY sales declined following the pandemic.

Chief executive Nick Roberts said: "The group has delivered a good performance during the first half of the year, once again demonstrating the capability to navigate challenging market conditions.

High Street bakery chain Greggs gained after reporting a 22.4% rise in like-for-like sales for the half-year and maintained 2022 guidance , but bumped up its cost inflation guidance once again as price continued to rise.

The company, famed for its sausage rolls and other food-to-go products, on Tuesday said total sales for the 26 weeks to July 2 were up 27.1% to £694.5m.

Pre-tax profits were flat at £55.8m, as the re-introduction of business rates, an increase in VAT sales tax and rising inflation all kicked in. The company said it did not expect a rise in profits for the year.

"We have worked hard to mitigate the impact of cost inflation on customers but some further small price increases have been necessary; these appear not to have impacted transaction numbers," the company said.

Cost inflation increased significantly in the first half of the year, driven by food, packaging and energy commodities, Greggs said, adding that it now expected this figure to run at 9% for the year.

Greggs added 5p - 10p to the price of its products at the start of the year and raised prices again in May as the cost of ingredients started to spiral. The group earlier in 2022 predicted prices would rise by 5% and lifted that to 7% in March before the latest rise.

It said it had continued to extend forward purchasing cover and fixed input prices for an average of around five months of future requirements across these areas.

In the four weeks to July 30 LFL sales in company-managed shops were 13.1% above the equivalent period of 2021.

"Clearly there are considerable uncertainties in the economy as a whole, but we continue to trade in line with our plan and are making good progress against our strategic objective to become a larger, multi-channel business," said chief executive Roisin Currie.

"In a market where consumer incomes are under pressure, Greggs offers exceptional value for customers looking for food and drink on the go. We are well positioned to navigate the widely publicised challenges affecting the economy and continue to have a number of exciting growth opportunities ahead, with a clear strategy for expansion. We remain confident in Greggs' ability to deliver continued success," she added.

Hargreaves Lansdown analyst Sophie Lund-Yates said the cost inflation figure could reasonably be expected to revised upwards, "putting pressure on Greggs to shift more pastry-encased goodies".

"Its position at the lower end of the value spectrum means Greggs is well placed to capture demand from those looking for a bite to eat, while times are tough. However there comes a point when cash-strapped consumers rein in that sort of spending altogether, which would be problematic."

Lund-Yates said the group's strategy to shift away from core shopping locations and into travel hubs, like train stations, "is a strategy that's served the likes of WH Smith well, and holds real merit as a hedge against declining town-centre footfall".

"Ultimately, Greggs has a sturdy balance sheet and room to stomach disruption, but an abrupt change in consumer spending habits could see the much-needed strategy rejuvenation taken off the boil, which would have far reaching implications."

Synthomer fell after reporting a drop in interim pre-tax profit, but struck a confident note on the outlook as it said all segments had grown apart from the elastomers arm.

In the six months to 30 June, pre-tax profit fell to £114.7m from £272.4m in the same period a year earlier, with revenues up 8.6% to £1.33bn.

Earnings before interest, tax, depreciation and amortisation fell to £173.1m from £322.7m a year earlier, but were ahead of the £100.2m generated in 2020 and the £99.7m seen in 2019. Synthomer said all businesses delivered EBITDA growth apart from the performance elastomers segment, which had an "exceptional" prior year of peak demand for nitrile butadiene rubber (NBR) related to the Covid pandemic.

Shares in Domino's Pizza Group fell as the company reported lower interim profits as the rising cost of wheat started to impact sales.

he company on Tuesday said pre-tax profits fell 16% to £60m in the first six months, while system sales were down to £710.5m from £752.3m.

The war in Ukraine, which is one of the world's largest wheat growers, has hit exports of the commodity, with knock-on impacts on flour supply.

Domino's said profitability was forecast to be weighted to the second half as it maintained annual guidance.

"We will be increasing our media spend in the second half compared to the first half, amplifying our value message to customers as we head into key events such as the men's football World Cup," said chief executive Dominic Paul.

Paul will leave his post in December to join as the head of Premier Inn-owner, Whitbread.

FTSE 250 - Risers

Biffa (BIFF) 400.20p 10.92% Elementis (ELM) 118.10p 7.85% Indivior (INDV) 325.60p 3.04% Virgin Money UK (VMUK) 147.95p 2.81% Carnival (CCL) 658.40p 2.71% Baltic Classifieds Group (BCG) 164.00p 2.63% Bank of Georgia Group (BGEO) 1,580.00p 2.46% Greggs (GRG) 2,126.00p 2.31% Pennon Group (PNN) 1,025.00p 1.99% Babcock International Group (BAB) 358.20p 1.94%

FTSE 250 - Fallers

Synthomer (SYNT) 209.60p -10.81% Travis Perkins (TPK) 940.00p -8.74% Man Group (EMG) 252.90p -5.56% XP Power Ltd. (DI) (XPP) 2,450.00p -5.41% Bellway (BWY) 2,333.00p -5.32% Domino's Pizza Group (DOM) 275.60p -5.23% Watches of Switzerland Group (WOSG) 838.50p -4.93% Chrysalis Investments Limited NPV (CHRY) 97.60p -4.69% Crest Nicholson Holdings (CRST) 267.40p -4.64% IntegraFin Holding (IHP) 263.40p -4.63%