The public transport operator anticipates its effective tax rate in 2018 to fall to the low 20% range from the high 20% range.
For the year ended December 31, the company said it will see a “small tax credit” due to the revaluation of deferred tax balances, which will be reflected when 2017’s full-year results are announced on March 1.
The group in December bought a US-based school bus and coach business that operates out of Cincinnati, Ohio.
In a research note, Liberum raised its estimated 2018 and 2019 earnings per share forecasts by 3%, but analysts noted that they are “mindful of the potential translation risk if the US dollar continues to depreciate.”
Liberum has a “buy” rating and target price of 390p on the shares, which were trading in a narrow range at around 381p Monday morning.
-- Adds analyst reaction, updates share price --