Rolls-Royce (RR.), Admiral (ADM), OSB Group (OSB), Gooch & Housego (GHH) and Diversified Energy (DEC)
The improvement in Rolls-Royce’s (RR.) fortunes means it has regained an investment grade rating from ratings agency Moody’s.
An upgrade lifting the engineering giant’s credit rating from junk status “reflects the substantial improvement in its profitability, cash flows and financial leverage” it has achieved, said Frederic Duranson, a senior analyst at Moody’s.
Earlier this month, Rolls-Royce upgraded its free cash flow forecast for 2024 to £2.1bn-£2.2bn, from £1.7bn-£1.9bn previously. The company also said it would reintroduce a dividend alongside full-year results for the first time in five years. Rolls-Royce shares were 1 per cent lower in early trading but are up 66 per cent year-to-date. MF
Read more: Rolls-Royce is bringing back dividends
Admiral pays special dividend after smashing forecasts
A consistent recovery in motor, property and accident insurance rates was evident in the interims for Admiral (ADM). The Cardiff-based insurer soared past consensus forecasts to register a 32 per cent rise in pre-tax profits to £310mn, with the group’s turnover rising by 43 per cent to £3.21bn. The market was enthused and marked up the shares 8 per cent in early trading.
The payment of a special dividend worth approximately £60mn, or 19.7p a share, on top of its normal payout, meant the insurer plans to pay out 91 per cent of its earnings for the half, which translates into a broad payment of approximately £217mn in dividends.
Admiral seems to have benefited from modestly cutting its rates at the start of the year as the general market was still increasing, cementing its competitive position at the top of the UK general insurance market. JH
Read more: Takeover fever is about to hit the insurance market
Gooch & Housego warns delivery delays will hit profits
Photonics specialist Gooch & Housego (GHH) warned that profits for the year to September will be lower than expected due to “supplier and delivery delays”.
The company had said at the half-year stage that trading would be “more heavily weighted” to the second half due to destocking by industrial and medical laser customers. Although output has picked up, some of its expected sales are likely to creep into next year and adjusted pre-tax profit will likely be £1.5mn lower than anticipated.
Investec analysts cut their adjusted pre-tax profit forecast to £8mn and the shares fell by 3 per cent. MF
