FTSE 250 movers: Drax, Howden power ahead; Aston Martin reverses

(Sharecast News) - FTSE 250 (MCX) 19,139.10 0.66% Power generation company Drax posted a surge in full-year profits on Thursday and lifted its dividend, as Britons struggled to pay their energy bills.

In the year to the end of December 2023, pre-tax profit jumped to £796m from £78m a year earlier, while adjusted earnings before interest, tax, depreciation and amortisation rose 66% to £1.2bn.

Drax proposed a final dividend of 13.9p a share, up 10% on the year.

The company said its full-year 2024 expectations for adjusted EBITDA are in line with analysts' consensus estimates of £882m to £1.1bn.

Chief executive Will Gardiner said: "Drax performed strongly in 2023 and we remained the single largest provider of renewable power by output in the UK. We have created a business which plays an essential role in supporting energy security, providing dispatchable, renewable power for millions of homes and businesses, particularly during periods of peak demand when there is low wind and solar power.

"Policy support for our UK BECCS project continues to progress and we remain in formal discussions with the UK Government to ensure Drax Power Station can play a long-term role in UK energy security, creating thousands of jobs during construction and helping the country reach Net Zero.

"We have made further progress in our ambition to be a world leader in carbon removals and have visibility of high-quality, long-term earnings to 2042 and a strong balance sheet which supports returns to shareholders and investment in growth, both in the UK and internationally."

Profits at Howden Joinery fell more than expected last year as a weaker DIY and housing market hit the bottom line.

The company on Thursday reported pre-tax profit for the year to December 30 of £327.6m, down 19%.

"While we are cautious about the macro-economic and geo-political environment, given the encouraging start to the year and the agility of our business model, the board is confident in the outlook for 2024," said chief executive Andrew Livingston.

UK depot revenue fell 0.7% to £2.24bn and the full-year dividend was lifted 1.9% to 21p a share.

"We anticipate that market conditions in 2024 will be broadly unchanged and we are well prepared for the challenges and opportunities that this may present," the company said.

"We aim to maintain a profitable balance between margin and volume and we have aligned our operating costs to expected market conditions. We will work with our suppliers to keep product and input costs well controlled."

Howden added that it planned to open 30 new UK depots this year.

Government contractor Serco said it expected slightly lower revenues this year and a 5% rise in profit as 2023 earnings rose 25%.

The company which runs immigrant detention centres in the UK, said operating profit for the year to December 31 came in at £272m.

It now expects revenue this year to be £4.8bn, compared with the £4.9bn reported in 2023.

"Revenue is expected to be lower organically due to our CMS contract now being in its new five-year agreement, the annualisation of our previously announced exit from certain low-margin contracts, and contract mix change in immigration, as we support the UK government's efforts to reduce the number of asylum seekers being accommodated in hotels," Serco said on Thursday.

Underlying operating profit is expected to grow by around 5% to £260m, driven by new contracts ramping up, operational efficiency improvements across the existing portfolio and a contribution from acquisitions, Serco added.

Precision instrumentation and controls company Spectris reported record adjusted profits for 2023 on the back of double-digit sales growth and improving margins, though sales came in slightly below forecasts.

Reported pre-tax profit for the full year totalled £263.6m, up 20% on 2022, helped by a 130 basis-point increase in the operating margin to 18.1%.

Adjusted operating profits were up 18% over the year at an all-time high of £262.5m.

Sales were up 9% over the year at £1.45bn, short of the company-compiled consensus forecast of £1.47bn.

Full-year like-for-like sales increased by 10% as strong double-digit growth in the electronics and semiconductor, materials and academic research offset a 9% drop in life sciences and pharmaceuticals, its biggest division.

"The combination of the improved quality of the group, our strong self-help story and the significant opportunities that lie ahead gives me great confidence in our future prospects, with the delivery of further margin expansion in 2024 providing another step towards margins in excess of 20%," said chief executive Andrew Heath.

The company said progress in 2024 was expected to be weighted towards the second half due to the strong performance in the first half of 2023 and an improving outlook in a number of key end markets.

Commenting on the results, analysts at Shore Capital said they were placing their 'buy' recommendation on Spectris under review, "noting the uncertain short-term outlook and the lack of a clear catalyst" following the completion of the company's portfolio rationalisation with the sale of the Red Lion Controls business in December.

The broker said the stock's valuation was "now appearing to be relatively full".

Aston Martin gave up gains made on Wednesday after it narrowed losses on the back of higher prices for its expensive cars.

Ashmore, Diversified Energy, Genus, Hargreaves Lansdown, Hays, HICL Infrastructure and Plus500 were all down on going ex-dividend.

Market Movers

FTSE 250 - Risers

Drax Group (DRX) 467.80p 11.67% Howden Joinery Group (HWDN) 837.60p 8.41% Energean (ENOG) 1,043.00p 6.48% Serco Group (SRP) 188.30p 5.08% Elementis (ELM) 143.40p 4.82% PZ Cussons (PZC) 102.80p 3.84% Man Group (EMG) 249.70p 3.52% Ferrexpo (FXPO) 74.50p 3.19% W.A.G Payment Solutions (WPS) 73.00p 2.82% Primary Health Properties (PHP) 90.95p 2.77%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 171.90p -6.32% Diversified Energy Company (DEC) 933.00p -5.18% Spire Healthcare Group (SPI) 226.50p -4.23% Plus500 Ltd (DI) (PLUS) 1,735.00p -4.04% Hargreaves Lansdown (HL.) 729.20p -3.52% Spectris (SXS) 3,508.00p -2.77% Tullow Oil (TLW) 28.50p -2.06% Dr. Martens (DOCS) 94.25p -1.82% C&C Group (CDI) (CCR) 143.20p -1.51% Wetherspoon (J.D.) (JDW) 763.50p -1.29%