FTSE 250 movers: Bytes Technology rises; Close Bros slumps on unit sale

19th Sep 2024 13:55

(Sharecast News) - FTSE 250 (MCX) 21,095.44 1.25%

Bytes Technology said on Wednesday that trading has remained strong since it updated the market at its annual meeting in July.

In an update for the half-year to the end of August, the software, security, cloud and AI services specialist said gross invoiced income and adjusted operating profit growth were comfortably in the double digits at around 13.5% each, while gross profit growth was about 9%.

The company's net cash position at the end of H1 FY25 was £71.5m after it paid £35.3m of final and special dividends in the period.

Bytes said cash conversion in the first half reflects its normal weighting to the second half, with strong cash conversion expected for the full year.

Chief executive Sam Mudd said: "We delivered a strong performance in the period and I am grateful to our teams for their efforts.

"We remain confident in our growth strategy and believe we are well positioned to benefit from the structural demand drivers we see in our markets including cloud computing, cyber security and AI."

Half-year results are due on 15 October.

UK defence company Babcock held annual guidance as underlying profit rose in the first five months of the financial year.

In a trading update ahead of the company's annual general meeting on Thursday, Babcock said trading for the period to August 31 had been "encouraging".

"Positive momentum has continued into the first half, and the group has delivered good organic revenue growth, particularly in civil and naval nuclear, and in the land sector. Group underlying operating profit also increased compared to the same period last year, despite last year including the license fees from the Polish Miecznik (frigate programme) programme," Babcock said.

"Our expectations for the full year are unchanged and we continue to progress toward our medium-term guidance."

Close Brothers announced an agreement to sell its wealth management subsidiary, Close Brothers Asset Management (CBAM), to funds managed by Oaktree Capital Management, for an equity value of up to £200m on Thursday, alongside a solid set of full-year results.

The FTSE 250 company said the transaction would include £28m of contingent deferred consideration in the form of preference shares, valuing CBAM at a multiple of 27 times its statutory operating profit after tax for the 2024 financial year.

Close Brothers said it would retain all upfront cash proceeds from the sale, amounting to approximately £172m.

The sale was expected to be completed in early 2025, contingent on receiving customary regulatory approvals.

In its preliminary results, Close Brothers reported a 1% increase in operating income to £944.2m in its preliminary full-year results on Thursday, driven by growth in both its banking and Close Brothers Asset Management (CBAM) divisions, offsetting declines in Winterflood and higher central functions' interest expenses.

The FTSE 250 company said statutory operating profit before tax jumped 27% to £142m, benefiting from the non-recurrence of prior impairment charges related to Novitas.

Adjusted operating profit rose 50% to £170.6m on the back of robust income growth of 1% and reduced impairment charges, despite a 10% increase in operating expenses primarily due to higher staff costs and ongoing investments in the banking sector.

The group's return on average tangible equity (ROTE) improved to 8.3%, up from 5.9% the prior year.

In the banking division, Close Brothers said it achieved a 6% growth in its loan book, reaching £10.1bn, supported by strong performance in property, invoice finance, asset finance, and motor finance.

The division reportedly maintained a stable underlying credit performance with a bad debt ratio of 1%, down from 2.2% the previous year.

Adjusted operating profit for banking increased to £205.4 million, up from £120.1 million in 2023.

CBAM saw net inflows rise by 8%, with total assets under management (AuM) growing by 18% to £19.3bn, driven by both net inflows and positive market performance.

However, adjusted operating profit for CBAM declined by 23% to £12.2m due to higher costs from investment in new hires.

Winterflood reported an operating loss of £1.7m, compared to an operating profit of £3.5m a year earlier, amid unfavourable market conditions.

Market Movers

FTSE 250 - Risers

Bytes Technology Group (BYIT) 511.00p 7.67%

Trustpilot Group (TRST) 230.50p 5.49%

Ocado Group (OCDO) 368.30p 5.35%

Softcat (SCT) 1,570.00p 4.95%

Ibstock (IBST) 188.60p 4.66%

Kainos Group (KNOS) 915.00p 4.45%

Babcock International Group (BAB) 485.80p 4.43%

Watches of Switzerland Group (WOSG) 410.20p 4.32%

Future (FUTR) 1,090.00p 4.31%

JTC (JTC) 1,064.00p 4.11%

FTSE 250 - Fallers

Close Brothers Group (CBG) 488.80p -7.34%

IG Group Holdings (IGG) 918.00p -3.06%

Drax Group (DRX) 623.50p -2.73%

Foresight Group Holdings Limited NPV (FSG) 520.00p -1.89%

Energean (ENOG) 891.00p -1.60%

Hilton Food Group (HFG) 889.00p -1.22%

PPHE Hotel Group Ltd (PPH) 1,245.00p -1.19%

W.A.G Payment Solutions (WPS) 84.20p -0.94%

FirstGroup (FGP) 155.40p -0.70%

Pennon Group (PNN) 602.00p -0.58%