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Market movers: Just Group's first half results drive shares higher

Last updated: 23:15 09 Aug 2022 AEST, First published: 19:08 09 Aug 2022 AEST

IWG

Shares in Just Group rose 2.80% to 77.40p after the group reported a 15% improvement in first-half underlying operating profits on Tuesday, to £74m, driven by higher in-force operating profit and lower finance costs.

David Richardson, group chief executive officer, said: “Following our strong first half of 2022 we have increased confidence of delivering 15% growth in underlying operating profit per annum, on average over the medium term.”

“We have a unique opportunity to build substantial value to shareholders and deliver our purpose to help more people achieve a better later life."

Broker Peel Hunt described the results as mixed with lower profits and growth in new business offset by a promising outlook for the second half.

The broker said the solvency capital position is increasingly robust and the group is in a better position to withstand a stress test scenario as surplus capital grows.

Reiterating a buy rating on the group Peel Hunt analysts said the shares continue to trade in value territory which does not recognise the improved capital position.

Abrdn slumps after warning on revenue growth

Shares in Abrdn fell 4% to 168p on Tuesday after the asset manager warned that ““current market uncertainty means our ambitions for revenue growth and improved cost/income ratio are likely to take longer than originally expected.”

The cautious outlook was accompanied by a drop in pre-tax profits to £99mln from £163mln

Adjusted operating profit dropped 28% to £115mln.  and fee-based revenues were down 8% to £696m.

Chief executive officer Stephen Bird said: "We are continuing to deliver on our priorities and whilst the external market environment has worsened and it will likely take us longer to deliver our targets, it is the right strategy and we have the team and the capital resources to execute it well.”

"Looking forward into the second half, we will see revenue tailwinds from a full six months' contribution from ii and from performance fees.”

“We are expecting continued positive flows in Adviser and Personal Wealth.”

“Markets have shown some signs of improvement in July and if this trend continues it will provide a further revenue tailwind."

Upgrades to follow strong numbers from Zotefoams

Shares in Zotefoams PLC (LSE:ZTF) surged 10% after strong half-year results with revenues up 23% year on year at £59mln and pre-tax profits up 42% to £5.7mln.

Group chief executive officer David Stirling said: "Geopolitical risks are currently much higher than normal," 

"Whilst these have limited direct impact on our operations currently, we are mindful of the risk that they may lead to more significant indirect impacts, especially in supply chain, inflation and demand, rendering forward looking statements particularly uncertain."

"Currently, we are experiencing good demand across our business consistent with our expectations."

Analysts at Peel Hunt noted this reflected solid demand (volumes up 4%), successful pricing initiatives “while FX has provided a useful tailwind.”

The broker said with trading ahead and the outlook supported by positive end markets and helpful mix trends it was upgrading its top of the range full year 2022 adjusted pre-tax forecasts by 6% to £9.3mln.

Peel Hunt kept its buy rating with price target of 400p.

IWG tumbles on concerns over cost pressures and continued lockdowns

Serviced office operator, IWG PLC (LSE:IWG), saw its shares tumble in early trading following half-year results reported on Tuesday, with cost pressures and ongoing disruptions from lockdowns likely to lead to cuts to earnings forecasts.

In the six months to 30 June, adjusted pre-tax losses narrowed to £70.2mln from £163.3mln with system-wide revenues up 22.3% at £1.4bn driven by strong demand for hybrid working.

Chief executive Mark Dixon said: "We look forward with cautious optimism to the remainder of 2022."

Shares fell 14.61% to 165.80p

Danni Hewson, financial analyst at AJ Bell said: “IWG’s latest results indicate progress in the business, with improvements in both occupancy rates and pricing.”

“Unfortunately, it cannot escape the cost pressures hurting companies worldwide.”

“Neither can it be relaxed about Covid as certain markets continue to experience lockdowns, which has a negative impact on demand for some of its serviced offices.”

“The market did not like the results, with the shares diving more than 17% in early trading.”

“Before the numbers came out, analysts had forecast IWG returning to profit this year at £48.6mln.”

“Given the ongoing cost pressures and lockdown disruptions, it seems likely this estimate will have to be scaled back” Hewson concluded.

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