MARKET REPORT: Mitie soars as it launches £50m share buyback plan

Mitie shares soared after it said profits were higher than expected and it launched a share buyback programme.

In an unscheduled update, the FTSE 250 cleaning services group said it has shifted its business away from short-term Covid-related contracts.

The outsourcing company said revenue for the year to March 31 was ‘slightly above’ the previous 12 months when it made £4billion.

As a result, Mitie said annual profits were around £10million higher than expected, at £155million or more.

Shares surged 13.5 per cent, or 11p, to 92.5p. The group hailed a strong end to its financial year, with fourth quarter revenues up around 10pc compared to the same period 12 months ago.

Profits up: In an unscheduled update, FTSE 250 cleaning services group Mitie said it has shifted its business away from short-term Covid-related contracts

Mitie also secured a series of contract wins and renewals from the likes of the Ministry of Defence and Eurostar.

The group also launched a £50million share buyback programme yesterday. 

It will be split into two parts, with an initial £25million repurchase scheme starting immediately. The timing of the second tranche will depend on M&A opportunities, the company added.

The FTSE 100 rose 0.4 per cent, or 29.93 points, to 7909.44 and the FTSE 250 edged up 0.05 per cent, or 9.42 points, to 19296.32.

There were fresh signs of China’s recovery from Covid after its economy grew by 4.5 per cent in the first quarter. Mining stocks were lifted by higher metal prices.

And upgrades from investment bank UBS sent Fresnillo up 3.2 per cent, or 24.8p, to 801p and Antofagasta added 1.8 per cent, or 29p, to 1637p.

Abrdn slid 0.7 per cent, or 1.4p, to 201.2p amid reports the investment group is axing around a fifth of its multi-asset team. 

Stock Watch – Volex

Volex chairman Nat Rothschild welcomed annual results that beat City expectations.

The company, which makes power cords and charging plugs for electric cars, said it made at least £572million of revenue in the year to April 2.

This was more than the £558million analysts expected and around 15.5 per cent higher than the year before. Profits of at least £53million were also above forecasts.

Rothschild is the top shareholder with almost 25 per cent.

Shares shot up 19.9 per cent, or 42p, to 252.5p.

Fund managers and investment specialists are thought to be among the 27 roles that would be given the chance to take voluntary redundancy, according to the Financial Times.

Asset managers have faced rising costs and clients pulling their money out of funds.

Moneysupermarket cashed in on people shopping for car and travel insurance.

The comparison website’s revenue rose 15 per cent to £106.3million in the three months to March 31.

Shares inched up 0.6 per cent, or 1.6p, to 249.8p.

The boss of Network International hailed a ‘solid start’ to 2023 after the payments firm’s revenue rose 13 per cent in the first quarter.

Shares edged higher by 0.2 per cent, or 0.8p, to 364p.

It came a day after private equity giants CVC Advisers and Francisco Partners tabled an offer that valued it at £2.1billion.

Money transfer group Wise sank into the red as high borrowing costs and inflation saw customers cut back on moving larger payments for buying or selling properties and investments. 

The company said its average volume per customer (VPC) decreased by 7 per cent year-on-year amid a slowdown among customers who move volumes of more than £10,000.

Shares tumbled 7.8 per cent, or 45.4p, to 540p.

Halfords told investors its sales and profits should grow over the mid-term. At part of its capital markets day, the cycling and motoring retailer said sales of around £1.6billion expected for this financial year should increase to £1.9billion. 

And profits of between £50million and £60million should reach around £90million and £110million. Shares rose 9.3 per cent, or 16.4p, to 193p.

Traders made a dash for Crest Nicholson despite mixed reports from a broker. JP Morgan raised the housebuilder’s target price to 210p from 180p.

But the investment bank reiterated its ‘underweight rating’ on Crest Nicholson and said the stock had one of the ‘largest downside on 2023 estimates’.

Shares surged 8.9 per cent, or 22.2p, to 272.2p.

This post first appeared on Dailymail.co.uk