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FTSE 250 movers: Trainline on track; OSB tanks

14:52, 14th March 2024

FTSE 250 (MCX) 19,537.45 -0.14%
 

Shares in online ticketing platform Trainline surged after it reported sales at the top end of expectations as fewer strikes in the UK and competition for passengers in Italy and Spain saw revenues also beat forecasts.

Total group sales for the year to February 29 rose 22% to £5.3bn - above Trainline's already-improved guidance range of 17% to 22% - with international ticketing up 14% to £1bn and the UK surging 23% to £3.5bn. Shares in the company were up 12% in afternoon trade.

Group revenue was £397m, 21% above guidance of between 15% - 20%.

"Our growth was fastest in Spanish domestic travel, which doubled year on year as we position ourselves as the aggregator of choice. Trainline's market share continues to rise on key routes like Madrid - Barcelona, which is now our third most popular route across all countries, including the UK," said chief executive Jody Ford.

The UK market continued to rally from volatile markets caused by the Covid pandemic and a wave of strikes by railway workers over pay as the government started to settle disputes.

Strike days fell to 25 in fiscal 2024 from vs 30 a year earlier and also lessened in financial impact on gross ticket sales to £4m from £5-6m.

UK Consumer growth also reflected more people switching to digital tickets, with industry eticket penetration at 47% of ticket sales in FY2024, up from 43%.

Shares in Vistry surged on Thursday after the UK housebuilder posted a jump in annual profits, unveiled another £100m share buyback and forecast higher completions in 2024 driven by strong demand.

The company on Thursday posted a 23.2% rise in pre-tax profit of £304m for the year to December.

Vistry said it was on track to deliver strong growth in completions in 2024, targeting more than 17,500 units compared with 16,118 homes built a year ago, underpinned by its forward sales position totalling £4.6bn, of which £2.1bn is for delivery this year

It added there had been a "notable pick-up" in demand from private rental sector providers in recent months.

"The easing of mortgage rates at the start of the year has had a positive impact on open market demand and we are optimistic that this trend will continue during 2024," the company said.

"Open market demand from private buyers remained suppressed during 2023 with our private sales rate significantly below prior years. This reflected higher mortgage borrowing costs, inflationary cost pressures on household income and wider macroeconomic and political uncertainty."

In a rare foray into UK politics, chief executive Greg Fitzgerald said he expected Vistry to be able to build more homes under a Labour government, believing the main opposition party would put more money into affordable housing to tackle a chronic shortage.

I am pretty confident that from our new-model perspective, we would be better with a Labour government. I think they (Labour) will put more money into affordable housing than the Conservatives," he told the Reuters newswire service.

The ruling Conservatives, in power for 14 years, are trailing Labour by 20 points in the polls and struggling to make headway with economic policies, amid high interest rates and a cost-of-living crisis.

OSB Group tumbled on Thursday as full-year profits beat expectations but guidance on net interest margin disappointed.

Underlying pre-tax profit fell to £426m from £591.1m a year earlier, while statutory pre-tax profit was down 30% to £374.3m.

OSB said that as in the first half, the full-year results were "significantly" impacted by the adverse effective interest rate (EIR) adjustment, relating mainly to a shorter time spent on the reversion rate by its Precise Mortgages customers.

"Since then, their behaviour has remained broadly consistent with the circa five months spent on reversion rate assumption," it added.

Mortgage holders coming to the end of fixed-term deals often spend some time on a variable rate, or reversion rate - which is linked to the Bank of England's base rate - before moving to a new deal.

During the year, the underlying and statutory net loan book increased by 9% to £25.7bn and £25.8bn, respectively. OBS said this was supported by organic originations of £4.7bn, down from £5.8bn a year earlier.

Chief executive Andy Golding said: "The group performed well in its core market segments in 2023, growing its share of the Buy-to-Let sub-segment to deliver 9% net loan book growth against a backdrop of a subdued wider mortgage market.

"The group's target professional landlords continue to demonstrate resilience, supported by high levels of demand in the Private Rented Sector, long-term income improvement and a reduction in the cost of borrowing towards the end of the year. Our fair and attractively priced savings products were popular and we grew our retail deposits by 12% in the year."

The company also announced that chief financial officer April Talintyre will retire at the annual general meeting on 9 May. Deputy CFO Victoria Hyde will become acting CFO while OSB searches for a replacement for Talintyre.

Looking forward, OSB said that based on current application volumes and against the backdrop of a "subdued" mortgage market, it expects to deliver underlying net loan book growth of around 5% for 2024.

The underlying net interest margin is expected to be "broadly flat" to the 2023 underlying NIM of 251 basis points, "reflecting the impact of a higher cost of funds and the full year impact of some lower margin lending in 2023, due primarily to delays in mortgage pricing reflecting the rate rises and higher swap costs," it said.

Meanwhile, the underlying cost to income ratio is expected to be "broadly flat" to the 2023 underlying ratio of 33%, commensurate with the NIM guidance.

Broker Shore Capital, which rates the shares at 'buy', said adjusted pre-tax profit £426m was 4% ahead of consensus and 2% ahead of its forecast, primarily due to lower-than-expected impairments.

However, net interest margin guidance is lower than it and consensus had expected, "which is likely to drive sizeable forecast downgrades".

Analyst Gary Greenwood said: "Net interest margin is about 30 basis points lower than what we have modelled in (we understand consensus is only slightly below us) and consequently the C/I ratio is higher.

"This differential is primarily due to higher funding costs. We provisionally expect this to result in adjusted profit before tax in a £450-470m range (EPS of 85-90p). This compares to our current forecasts of £560m and 107p respectively, so these are sizeable downgrades."

Telecoms infrastructure firm Helios Towers has hinted that it is closer to distributing cash back to shareholders and said that 2024 is to be an "inflection year" for free cash flow following a period of busy acquisition activity.

The comments came after the company delivered a strong set of annual results for 2023, with tenancies and adjusted EBITDA ahead of expectations - though guidance for 2024 came in a little shy of market forecasts.

Greeting cards and gift retailer Moonpig said on Thursday that trading in the current financial year ending 30 April has remained in line with expectations across all of its brands, as it announced a new revolving credit facility.

FTSE 250 - Risers

Trainline (TRN) 367.60p 12.35%
Vistry Group (VTY) 1,203.00p 7.80%
Savills (SVS) 986.00p 4.89%
Helios Towers (HTWS) 83.05p 4.53%
Genuit Group (GEN) 420.50p 4.08%
Darktrace (DARK) 476.60p 3.99%
IG Group Holdings (IGG) 729.50p 3.40%
Wood Group (John) (WG.) 147.00p 3.23%
W.A.G Payment Solutions (WPS) 77.20p 2.93%
FirstGroup (FGP) 164.70p 2.74%

FTSE 250 - Fallers

OSB Group (OSB) 379.00p -17.79%
Lancashire Holdings Limited (LRE) 609.00p -6.02%
Abrdn (ABDN) 140.00p -5.91%
Direct Line Insurance Group (DLG) 205.20p -5.00%
Apax Global Alpha Limited (APAX) 147.00p -4.05%
FDM Group (Holdings) (FDM) 389.50p -3.95%
Currys (CURY) 58.95p -3.44%
Dunelm Group (DNLM) 1,104.00p -3.33%
Moonpig Group (MOON) 174.10p -2.95%
Watches of Switzerland Group (WOSG) 378.00p -2.88%

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The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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