FTSE 250 movers: Grafton nails it, Qinetiq lower

(Sharecast News) - FTSE 250 - 19,193.94, up 2.92% at 1518 GMT. Shares in building materials distributor and DIY retailer Grafton surged as it announced another share buyback programme on Thursday as it backed its expectations for full-year operating profit and posted a rise in revenue.

In an update for the 1 July to 31 October, the Woodie's and Chadwicks owner said that group average daily like-for-like revenue was up 1.8% versus the same period a year earlier, and 17.3% higher compared to the same period in 2019.

In the 10 months to the end of October, group revenue from continuing operations was up 9.5% at £1.93bn.

Grafton said it continued to benefit from the geographic diversity of its markets, with over half of revenue derived in Ireland, the Netherlands and Finland. It said the favourable first-half revenue trends in the distribution businesses in Ireland and the Netherlands continued amid solid underlying demand and building materials price inflation.

In the UK distribution business, however, trading conditions remained softer as households reduced discretionary spending on home improvements.

Revenue in the Finnish distribution business was ahead of a strong prior year comparator. Grafton said trading normalised in line with the prior year in the DIY, Home and Garden business in Ireland, while the UK manufacturing business continued to perform strongly.

Grafton said it continues to expect to deliver full-year adjusted operating profit consistent with current market forecasts of around £266m.

The company also said that following the completion of its £100m share buyback programme between 9 May and 12 September, it will now launch a further buyback of up to £100m, which will end no later than 30 April 2023.

Chief executive Gavin Slark said: "Grafton delivered a solid performance in the period demonstrating the benefit of its balanced spread of operations across geographic markets and sectors.

"Notwithstanding macroeconomic challenges particularly in the UK, the group is confident that it will deliver its expectations for the year. Grafton is in a very strong financial position enabling the group to increase returns to shareholders through a new share buyback programme announced today, which is our second buyback programme of 2022, whilst also retaining the financial flexibility to fund suitable acquisition opportunities."

Shares in defence technology specialist QinetiQ Group fell despite the group lifting full-year guidance on Thursday after a spike in first-half revenues and profits.

Underlying revenues for the six months to 30 September jumped 12% to £673.4m, while operating profits rose to £74.1m from £53.4m a year previously. Orders jumped 18% to £798.8m.

On a statutory basis, operating profits came in at £100.1m, against £41m a year earlier, boosted by a foreign exchange gain on the acquisition, announced in August, of US software firm Avantus Federal.

Steve Wadey, chief executive, said: "World events continue to reinforce the vital importance of a technology-advanced defence industry to society and the needs of our customers for differentiated solutions.

"Our first half results demonstrate the strong demand we continue to see from our customers for our distinctive offerings.

"Our home countries of UK, US and Australia have all achieved significant organic growth and the US has performed particularly well, delivering improved and consistent performance."

Looking to the second half, QinetiQ said it was increasing revenue guidance and remained on track to meet profit expectations.

It continued: "Given our strong growth in the first half, we will deliver high single-digit percentage organic revenue growth, with underlying profit margin at the lower end of our 11% to 12% short-term expected range, due to increase investment in our people and capabilities to enable growth."

Capital expenditure is expected to come in towards the middle of its forecast £90m to £120m range.

FTSE 250 - Risers

Grafton Group Ut (CDI) (GFTU) 801.90p 10.32% Ferrexpo (FXPO) 141.70p 9.42% IntegraFin Holding (IHP) 292.80p 7.96% Tritax Big Box Reit (BBOX) 150.20p 7.13% Kainos Group (KNOS) 1,344.00p 7.09% LondonMetric Property (LMP) 196.10p 6.92% Bridgepoint Group (Reg S) (BPT) 236.40p 6.87% Molten Ventures (GROW) 403.40p 6.78% Liontrust Asset Management (LIO) 1,074.00p 6.76% Watches of Switzerland Group (WOSG) 978.50p 6.71%

FTSE 250 - Fallers

FirstGroup (FGP) 91.80p -4.67% Wood Group (John) (WG.) 150.80p -2.84% Petrofac Ltd. (PFC) 112.10p -2.10% 888 Holdings (DI) (888) 97.70p -2.01% Elementis (ELM) 101.30p -1.84% Schroder Oriental Income Fund Ltd. (SOI) 245.50p -1.80% ContourGlobal (GLO) 250.00p -1.57% QinetiQ Group (QQ.) 357.20p -1.27% Beazley (BEZ) 656.00p -0.76% VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 401.00p -0.74%