City round up: Together; PZ Cussons; Speedy; Norcros
Property lending specialist Together has grown its loan book to £7.6bn while the Group remained highly profitable and cash generative, the company said in a market update this morning announcing results for the quarter ended September 30, 2024.
Mike McTighe, Chairman of Together said: “Originations remained robust as we further increased interest receivable and similar income, underlying profit before tax and cash receipts during the quarter, and we successfully raised or refinanced over £1bn of facilities to end the period with c£1.0bn of funding headroom. We have continued to strengthen and enhance our Executive team, announcing the appointment of Richard Rowntree as our new CEO and promoting Chris Adams to CFO and John Barker to CEO of our Personal Finance division. We were also delighted to be named one of ‘Europe’s Long-term Growth Champions’ by the Financial Times in October.
“While inflation is now close to the Bank of England’s target and interest rates are continuing to reduce gradually, UK economic growth is forecast to remain modest. Against this backdrop and as evidenced by our recent residential property market report, we expect many more customers will be underserved by mainstream lenders and look to specialist lenders, like Together, for support. We will continue to be there to help our customers realise their ambitions and to play our part in supporting the UK economy, as we have for the last 50 years.”
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Manchester headquartered household goods business PZ Cussons said in a trading update today that trading has been in line with expectations and expects to report approximately 5% like-for-like revenue growth for H1 FY25.
This reflects a continuation of the favourable Q1 trends led by growth in the UK, as part of our Europe and Americas region, and continued pricing in Africa given the further FX-driven inflation. APAC declined slightly, with continued improvement in Indonesia offset by some category softness in ANZ.
Gross debt is expected to be less than £160 million at the end of November 2024, compared to £167 million as at 31 May 2024. We are also taking action to reduce the impact of currency volatility in relation to intercompany loans to Nigeria.
Earlier this year PZ said it was selling the St.Tropez brand and was in ongoing discussions to do so, and with interested parties which could lead to the partial or full sale of its African business.
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Speedy Hire electric truck
Speedy Hire has recorded a pre-tax loss of £1.6m (H1 FY2024: £4.2m profit) for the first half of the current financial year.
Dan Evans, Chief Executive, said the results were “resilient” against a “challenging but manageable market backdrop, whilst maintaining investment in our Velocity strategy”.
He said the Group secured significant contract wins and renewals earlier in the calendar year, which will deliver revenue and profit growth in this financial year and beyond.
Total revenue for the period to 30 September 2024 decreased by 2.4% to £203.6m (H1 FY2024: £208.5m) with hire rate increases across customer segments mitigating some softening in volume with National and Regional customers. Revenue from disposals was £1.6m (H1 FY2024: £2.0m).
The loss after taxation of £1.6m (H1 FY2024: £4.2m profit), was the result of non-underlying costs in respect of a transformation programme.
“The second half has started well with hire revenues for October and November to date, up c.3% on this time last year. Consistent with prior years, the Group expects a strong second half weighting to its hire revenues and profits, as the seasons change and new contracts fully mobilise. It is particularly encouraging that we are mobilising the Amey contract earlier than anticipated, in addition to a strong pipeline of further opportunities that give us confidence in the outlook for the business,” Evans added.
Investment bank, Panmure Liberum, issued a ‘Buy’ call on Speedy’s shares this morning, saying: “Speedy has delivered a modest PBT in H1, but EBITDA margins have been maintained. Net debt (excl leases) increased from £102m at the FY to £112m, with improved cash conversion but higher capex.”
It has reduced its 2025 financial year FD EPS by seven per cent, solely due to lower JV income. It said: “We expect virtually all the FY 25 EPS in H2 but note good grounds for a stronger H2.
“Cash conversion is strong but we increase our FY 25 net debt (excl leases) estimate from £95m to £98m due to higher capex.”
It noted four key points: 1) Early mobilisation of Amey and growth at TIC are positive near term drivers and management will seek to mitigate the NI impact on FY 26; 2) We remain upbeat about the outlook for the sector; 3) Operational gearing should start to work in Speedy’s favour and medium term FD EPS of 9.2p should be achievable; 4) Green energy initiatives should accelerate growth.
It added: “We maintain our BUY recommendation and share target price of 47p; a CY 25 P/E of 6.7x is attractive given the recovery potential.”
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Bathrooom supplies business Norcros has recorded a pre-tax loss before taxation of £11.7m (2023: profit of £11.7m) in the first half of the financial year on reduced turnover of £188.4m (2023: £201.6m).
Thomas Willcocks, CEO, commented: “In a weak market during the first half of the year Norcros has again grown share and made further strategic progress. While the demand environment is expected to remain challenging, we remain focused on the significant market opportunities available and are confident that our leading positions and strategic implementation will continue to deliver market share gains. The Board therefore expects full year underlying operating profit to be in line with market expectations showing further progress towards achieving our medium-term targets.“
In the UK the business delivered like for like revenue growth of 0.9%. On a reported basis, revenue of £131.3m (2023: £143.9m) was 8.8% lower than the prior year largely reflecting the disposal of Johnson Tiles UK in May 2024.
