MARKET REPORT: Recovery puts green light back on track to re-establish Divi as bus and train operator vows to boost profits
Bus and train operator Go-Ahead plans to restore dividends in the latest sign of its post-pandemic recovery.
The company is also pledging to boost profits as it attempts to overhaul much of its strategy following a group-wide business review.
Shares of the company, down 60% since the pandemic hit, rose 2.3%, or 19p, to 861p.
Bounce Back: Go-Ahead pledges to boost profits as it attempts to overhaul much of its strategy following a group-wide business review
Go-Ahead has pledged to return to its pre-pandemic shareholder dividend policy from 2021-22 by offering at least 50p per share for the year to July 2.
And it aims to boost annual revenues by around 30% to £4bn and operating profits to at least £150m in the medium term.
But to overcome a series of problems, the stain of the Southeast Rail Franchise scandal must be removed.
It won’t be easy to get rid of it. Southeastern, whose services link London, Kent and East Sussex, is operated by Govia, a joint venture between transport operators Go-Ahead and Keolis.
Last October, the government seized the Govia franchise over disclosure failures over more than £25million in taxpayer funding since 2014 that should have been returned.
This was on top of the £64million the Department for Transport is recovering from Govia in relation to breaching its franchise and other costs.
Shares in Go-Ahead have been suspended by the London Stock Exchange following the saga which caused a long delay in its 2020-21 results.
And Govia was fined £23.5million over the scandal.
Stock Watch – Osirium Technologies
Cybersecurity firm Osirium Technologies surged after recording record bookings.
The company, which has been listed on AIM since 2016, said its preferred security capabilities were in demand as customer wins continued to be strong in the NHS and higher education.
There has been a return to pre-pandemic contract values, with five contracts completed in the first three months of fiscal 2022, each for more than any deal in 2021.
It rose 102.4%, or 6.53p, to 12.9p.
Steve Clayton, fund manager at Hargreaves Lansdown, said shareholders will be looking for “consistency” after recent “poor execution”.
The FTSE 100 rose 0.72%, or 54.80 points, to 7613.72 while the FTSE 250 rose 0.13%, or 27.09 points, to 21356.98.
The London Stock Exchange Group rose 2.7%, or 220p, to 8360p after agreeing to buy identity verification data firm Global Data Consortium for an undisclosed sum.
One of the biggest risers in the blue-chip index was the National Grid – up 3.6%, or 42p, to 1,211p – while United Utilities rose 3.5%, or 39p, to 1166p.
Online reviews platform Trustpilot (up 3.3%, or 4.8p, to 148.3p), cruise line Carnival (up 4.1%, or 55p, to 1,396, 5p) and Baltic Classifieds (up 5.7 percent) also performed strongly yesterday. cent, or 8.4p, to 155p).
But Cambridge cybersecurity firm Darktrace plunged 5.9%, or 26.4p, to 424.6p after JP Morgan gave it an “underweight” rating, saying acquisition and higher customer retention may prove difficult. Homeserve rose 1.1%, or 9.5p, to 874.5p after hailing “very good progress” in the 12 months to the end of March.
Ahead of next year’s figures next month, the repairs firm said it retained 84% of its customers last year and the results would be “in line with expectations”.
Homeserve last month became the target of a potential takeover after Canadian asset manager Brookfield said it was “considering a possible offer”.
Brookfield has until April 21 to indicate whether it will make a formal offer.
Online card retailer Moonpig benefited from a successful Mother’s Day and strong demand over the winter, and raised its revenue forecast for the year to April 30 to around 300 million pound sterling. Moonpig previously forecast revenue of around £285m.
He said trading was better than expected due to “temporary” changes in customer behavior in late December and January, amid Omicron’s rapid spread.
The stock fell 4.7%, or 11.2p, to 226.8p.