Shares in S&U plc, the specialist motor and property bridging lender, advanced 6.73% to 2,250p on Wednesday following an upbeat trading update.
The group said that both its motor and property bridging divisions continue to outperform its expectations, both in transactions growth, and in the quality of its book and the new business it is writing.
Current group receivables now stand at approximately £370mln against £340mln in May, and profitability exceeds that of the first half of last year.
"Debt quality is reflected in strong collection rates and supported by low levels of default at Advantage, our motor finance business, and at Aspen, our property bridging lender" the company said.
Broker, Peel Hunt, highlighted exceptional growth at Aspen and a robust showing by the Advantage motor finance arm.
Forecasts are unlikely to change materially. It said, with higher income expectations offset by higher costs but it pointed out first half profitability is already ahead of the same period last year.
Contract win supports Pelatro
A new contract win helped drive shares in Pelatro higher on Wednesday with the stock gaining 8% on the news advancing to 23.75p.
The enterprise Customer Engagement Hub software specialist, said that it has been selected by a Middle East telco (part of a wider international group) to provide its mViva Campaign Management and Loyalty Management Solutions.
It saw the initial value of the license contract at around $1mln (payable over 3 years) meaning revenue visibility for 2022 stands at around $8mln.
Subash Menon, Managing Director and CEO commented, "This win marks the entry of Pelatro into a new telco group with operations in multiple countries.”
4imprint soars as finnCap rises price target
Shares in 4imprint soared 13.28% to 3,880p on Wednesday as analysts upgraded forecasts following strong first half results.
The promotional products group reported a 58% increase in sales to $515.54mln, a 1,122% rise in operating profits to $43.98mln while net cash improved from $42mln to $67mln.
Customer demand is at record levels, with orders processed up 44% on the first half of 2021 and average order values were up 10%.
Operating margins increased from 1.3% to 8.5% and are up from the 6.2% achieved pre pandemic in full year 2019, with a significant improvement in marketing effectiveness being the key driver.
finnCap analyst Guy Hewett described the results as “very strong” and has raised his full year 2022 forecast for earnings per share by 8% and the price target for the group from 4,913p to 5,216p.
“4imprint has once again emerged from an economic downturn in a stronger position, taking leadership on pricing and accelerating market share gains at the same time as growing operating margins” he said, adding “these positives are all testament to the value of the operating model, the long-term investment made during highly uncertain macro conditions and the growth potential in what remains a large and fragmented market.”
Strile action would send Royal Mail into the red
Shares in Royal Mail PLC (LSE:RMG) fell 1.80% to 261.60p in early trading after the mail delivery group warned the proposed strike action by members of the Communication Workers Union would send the group into the red for full year 2022-23.
The warning came after the mail delivery group said it had received notification that strike action was proposed for four days in August and September.
Royal Mail said “This decision by the CWU is an abdication of responsibility for the long-term job security of its members”
“The negative commercial impact of any strike action will only make pay rises less affordable and could put jobs at risk.”
Royal Mail has contingency plans in place and will be working hard to minimise disruption and restore normal service, it added.
Analysts at Peel Hunt now forecast a £55mln full year 2023 operating loss in the UK compared to guidance of break even at the quarter one trading update.
It cautioned that “The strike is likely to impact demand for the group's parcel services, in what is a very competitive market, and once volumes are lost, they have proven very difficult to recover.”
The broker kept its sell rating on the stock.