FTSE 250 movers: Wood Group surges on bid rejection

(Sharecast News) - FTSE 250: 19,862.11, +0.92% at 1320 GMT.

Wood Group said on Wednesday that it has rejected three unsolicited, preliminary and conditional takeover proposals from Apollo Global Management.

The most recent approach, on 26 January, was at 230p per share in cash.

"The board carefully considered each of the proposals, together with its financial advisers, and has engaged on a limited basis with Apollo," it said.

"The board unanimously rejected each of the proposals, having concluded that they significantly undervalued the repositioned group's prospects."

Animal genetics company Genus said chief executive Stephen Wilson has decided to retire as the company also posted a 14% rise in annual profits as it hoped for a price rebound this summer.

The company on Thursday said pre-tax profits rose £42.2m. Sales were up by a quarter to £350m.

"The group achieved a good performance during the first half of the year, despite challenging market conditions for producers in several markets," Wilson said

"The China porcine market has been on a path to recovery since June 2022, but continues to be volatile. Since December the changes in China's Covid-19 polices and outbreaks of ASF have caused imbalances in supply and demand."

"Industry projections suggest prices will recover in Spring/Summer of 2023, with consumer demand expected to improve following the reduction of Covid-19 restrictions and supply expected to reduce. However, there is still uncertainty as to the shape and strength of this recovery."

Wilson has been with Genus for 10 years, the last four as CEO and has committed to remain until the end of September in order to achieve a smooth transition to a successor, it added.

A formal search for his successor has been started with an executive search agency.

Morgan Sindall reported a record set of final results on Thursday, describing a strong performance despite market headwinds.

The FTSE 250 construction and regeneration company said revenue increased 12% to £3.6bn, while adjusted profit before tax rose 7% to £136.2m.

Its balance sheet also showed strength, with net cash at year-end standing at £355m, and average daily net cash coming in at £256m.

Additionally, firm's company's order book remained substantial, with a secured workload of £8.5bn.

Morgan Sindall's board hiked the total dividend by 10% to 101p per share, although it did incur an exceptional charge of £48.9m for building safety, in line with previous guidance.

Divisionally, its fit out operations reported a solid performance, with operating profit increasing 18% to £52.2m.

Construction and infrastructure reported a steady performance with an operating margin of 3.3% and an operating profit of £52.1m, against strong prior-year comparatives.

Operating profit in property services increased 5% to £4.3m, and partnership housing reported a strong contribution, with revenue there increasing 22% to £696m and operating profit rising 13% to £37.4m.

Finally, urban regeneration reported good progress, with an operating profit increase of 56% to £18.9m and a return on capital in the year of 20%.

"The group delivered a strong performance in 2022, with significant strategic and operational progress made across the business despite the market headwinds," said chief executive officer John Morgan.

"These results are another record for the group and they reflect the high quality of our operations and the talent and commitment of our people.

"With the more challenging economic backdrop, our strong balance sheet including our substantial net cash position provides us with confidence and enables us to continue operating efficiently and effectively."

Morgan said it particularly allowed the company to continue making decisions for the long term, to maximise its competitive advantage, and to position itself in its markets for continued sustainable long-term growth.

"While there remains significant macroeconomic uncertainty, Morgan Sindall is a strong and agile business which is well-placed to overcome the challenges of the coming year and also well-positioned to take advantage of the opportunities that arise in this type of environment.

"There are early signs that inflation, particularly labour inflation, has plateaued and is starting to fall in some areas.

"We look forward with optimism and although it is still early in the year, we're well-positioned to deliver a result for 2023 which is in line with our current expectations."

Drax Group nearly doubled its full-year operating profits even as it continued to invest heavily in the business.

Chief executive officer, Will Gardiner, highlighted Drax's role in helping the UK meet peak power demand when there was low supply from wind and solar.

"Drax is a growing international business with strong cash returns which we are reinvesting to produce more renewable energy and deliver carbon removals while reducing our own carbon emissions," Gardiner said.

"We aim to be at the heart of the energy transition, creating the jobs, renewable power and large-scale carbon removals that the world needs."

The company was the largest source by output of renewable power in the UK, equivalent to 11% of the annualised total, 19% of peak and at times 70% of in-day peaks.

Adjusted earnings before interest, taxes, depreciation and amortisation jumped by 83.6% to £731m, while adjusted basic earnings per share more than tripled to 85.1p.

However, the power generator's profit before tax fell from £122m in the year before to £78m.

As a proportion of EBITDA nevertheless, net debt reduced from 2.8 times to 1.6.

The company's boss also sounded a very confident note on Bioenergy Carbon Capture and Storage technologies, especially following approval of the Inflation Reduction Act in the US.

According to Gardner, Drax stood ready to invest billions of pounds in developing BECCS.

Capital investments were seen rising from £255m in 2022 to £570-630m in 2023.

Drax proposed a final dividend of 12.6p for an 11.7% increase in the total payout to 21.0p.

Howden Joinery posted a jump in full-year profit and revenue on Thursday as it announced the launch of a £50m share buyback.

Pre-tax profit for 2022 was up 4% on the previous year and 55.7% higher versus 2019, at £405.8m. Meanwhile, revenues rose 10.8% on 2021 and 46.4% on 2019 to £2.3bn. Howdens said this reflects the strengths of its local, trade only, in-stock business model.

The group proposed a final dividend of 15.9p, bringing the total for the year to 20.6p, up 5.6% on last year. It also announced a £50m share buyback.

Chief executive Andrew Livingston said: "Howdens delivered a strong performance in 2022, with good progress on executing our strategic priorities and further market share gains. During the year our teams have been adept at navigating the challenges of high inflation and supply chain disruption, while supporting our customers with a market leading product range, high stock availability and outstanding customer service.

"Our markets are large and fragmented which gives us a long-term opportunity for growth. In response, we are continuing to expand our depot network, improve our product range, optimise our manufacturing and supply chain, and develop our digital capabilities. We see potential for around 1,000 depots in the UK and we are now selectively expanding our business model internationally in France and the Republic of Ireland."

Recruitment company Hays said chief executive Alistair Cox was stepping down after discussions with the board.

In a statement on Thursday the company said it had been "jointly agreed that it is an appropriate time to commence a process to identify Alistair's successor".

"Throughout this process Alistair will remain as CEO until a suitable candidate has been appointed and a handover has taken place. A thorough recruitment process with the support of external consultants, is now underway, considering both internal and external candidates," the company said in a statement.

FTSE 250 - Risers

Wood Group (John) (WG.) 201.10p 29.99% Genus (GNS) 3,000.00p 10.95% Morgan Sindall Group (MGNS) 1,770.00p 8.32% ASOS (ASC) 858.00p 5.93% Spectris (SXS) 3,329.00p 5.92% Wizz Air Holdings (WIZZ) 2,647.00p 4.42% Dechra Pharmaceuticals (DPH) 3,162.00p 4.36% Hunting (HTG) 323.50p 4.35% Molten Ventures (GROW) 381.40p 3.92% TI Fluid Systems (TIFS) 119.80p 3.45%

FTSE 250 - Fallers

Drax Group (DRX) 631.50p -6.31% WH Smith (SMWH) 1,594.00p -3.92% Jupiter Fund Management (JUP) 131.70p -2.73% BBGI Global Infrastructure S.A. NPV (DI) (BBGI) 146.00p -2.67% Supermarket Income Reit (SUPR) 92.80p -2.11% Howden Joinery Group (HWDN) 702.40p -2.09% Octopus Renewables Infrastructure Trust (ORIT) 97.10p -1.92% Hays (HAS) 121.40p -1.78% TUI AG Reg Shs (DI) (TUI) 164.30p -1.50% Aston Martin Lagonda Global Holdings (AML) 189.90p -1.33%