These FTSE 250 shares have gained value following fresh trading updates released on Thursday trading. Here is what they’ve had to say.
Serco
Serco’s share price has soared 10.5% on the day to 157.3p, making it the FTSE 250’s best performer on Thursday. The support services company soared after it upgraded profit expectations for the full year.
For the first half of 2023 it predicted revenues of £2.5 billion, up 13% year on year or 6% on an organic basis. Serco said that “across our international portfolio, we are seeing growth in the defence sector and particularly strong growth in the immigration sector.”
Serco said it expects to report underlying trading profit of “at least” £140 million for the six months to June. This would represent an 8% annual increase.
The business declared that “strong demand for immigration services and the ramp up of contracts signed in prior years more than offsets a 12% negative variance from Covid-related work as well as lower volumes in Asia-Pacific.”
Thanks to a solid first half Serco has increased its revenues forecasts for 2023 by 4%. It now expects to report minimum full-year sales of £4.8 billion, up from £4.5 billion last time out.
It also anticipates underlying trading profit of £245 million, up 4% from previous guidance. Corresponding profits came in at £237 million in 2022.
The FTSE 100 firm also raised its free cash flow forecast for the full year, to £130 million from £120 million before. Adjusted net debt is also now expected to fall below the £200 million marker, to £190 million.
Chief executive Mark Irwin commented that “governments around the world are increasingly looking to us to help them with the complex and difficult challenges they face and our enhanced focus on customers, colleagues and capabilities enables us to respond to their needs.”
Irwin noted that the successful integration of ORS — a European immigration services business which it acquired in September — and the successful rebid of its Centers for Medicare & Medicaid Services (CMS) contract in the US helped it record strong trading during the first half.
Marlowe
Compliance and risk management specialist Marlowe’s share price also moved northwards following the release of full-year financials. At 595p per share it was last 0.9% higher in Thursday trading.
Revenues at the business rose 47% during the 12 months to March, to £465.7 million. This was thanks to guidance-beating record organic revenues which rose 10% during the year.
Marlowe noted that organic sales increased ahead of the market across the business. At its Governance, Risk & Compliance (GRC) division sales rose 8%. Meanwhile organic revenues at the Testing, Inspection & Certification (TIC) unit increased 11%.
Adjusted EBITDA at the FTSE 250 firm rose 52% year on year to £82.7 million. This was helped by a 30-basis-point improvement in divisional EBITDA margin, to 19%.
Chief executive Alex Dacre commented that “we are pleased to report another strong underlying financial performance in the year in which we saw excellent growth in organic revenues, profits and earnings per share, compounded by selective acquisitions across our service and software business streams.”
Marlowe said that the new financial year “has started well, with continued organic momentum.” It predicted high-single-digit organic growth for financial 2024 with earnings to be boosted by acquisitions.
It has made four bolt-on purchases in the financial year to date totalling £15.3 million. This follows the 11 acquisitions the company completed in the previous 12 months.
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