AJ Bell stock dips following Platinum business disposal

Investing.com -- Next PLC (LON:NXT) raised its full-year outlook after outperforming expectations in the first eight weeks of the fiscal year. The company’s shares jumped more than 7% in London at 08:12 GMT.

The British fashion retailer, often viewed as a key bellwether for the U.K. retail sector, reported an 8.2% rise in total sales to £6.32 billion for the fiscal 2025, with full-price sales climbing 5.8%, exceeding the initial estimate of a 5.5% increase.

Profit before tax (PBT) rose 10% to £1.01 billion, aligning with guidance that was raised in January.

Next also announced an increase in its final dividend to 158 pence per share, up from 141 pence, bringing the full-year payout to 233 pence.

Looking ahead, the company now expects full-price sales to increase by 5% in fiscal 2026, up from its previous projection of 3.5%.

Group sales are forecast to reach £6.6 billion ($8.51 billion), slightly above the earlier estimate of £6.5 billion.

PBT expectations for the year ending in January have also been revised upward to £1.07 billion from £1.05 billion.

Next said that upcoming U.S. tariffs and the elimination of the de minimis provision, which exempts certain goods from duties, are unlikely to significantly affect sales or profits.

“We believe NXT’s strong share price outperformance of UK peers looks well justified by today’s upgrade of FY guidance despite a broader consumer context which has proven very volatile since that view was set in early January,” Jefferies analysts said.

“We continue to see plenty of valuation attractions in the group’s total addressable market (TAM) expansion, industry-leading returns profile and unrivalled track record of delivery,” they added.

Investing.com -- RBC Capital Markets analysts see a "compelling" buying opportunity in shares of SSE (LON:SSE), citing the company’s current valuation as undemanding and reflective of an overestimation of regulatory and execution risks. 

In a note dated Thursday, RBC flagged that concerns surrounding SSE’s growth trajectory and political risk have weighed on its stock, but the firm believes these fears are overdone.

SSE, a leading UK energy company, has faced skepticism from investors due to uncertainties in regulatory policies and potential shifts in government support for renewable energy projects. 

However, RBC analysts argue that the market is undervaluing SSE’s position in the transition to clean energy and its long-term investment plans in renewables and infrastructure. 

They see the stock’s recent underperformance as an entry point for investors looking to capitalize on an improving risk-reward profile.

The analysts also pointed out that SSE’s plans remain intact, with a strong pipeline of projects that are expected to drive earnings growth in the coming years. 

They said that while political risks exist, SSE’s diversified portfolio and operational strengths provide a cushion against potential regulatory headwinds. 

Additionally, RBC believes that the valuation discount applied to SSE’s stock is unjustified given its growth prospects and strong execution track record.

With these factors in mind, RBC Capital Markets maintains a positive stance on SSE, stating that the stock’s current levels provide an attractive buying opportunity.

RBC suggests that downside risks are overstated, while SSE’s continued growth in the renewable energy sector offers substantial long-term potential.

Investing.com -- Shares of Zabka declined by 2.5% after the company announced its fourth-quarter results for the fiscal year 2024.

While the company reported a 21% increase in revenues year-on-year (YoY), its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was in line with expectations, and margins remained flat as a percentage of Sales to End Customers.

However, reported EBITDA numbers fell short of Bloomberg consensus estimates by 8%, attributed to higher one-time costs likely connected to changes in ownership structure and securing financing.

Depreciation and amortization charges were significantly higher compared to consensus, but this was mitigated by better-than-expected financing costs. Profit before tax (PBT) was 11% below consensus on a reported basis.

Despite the earnings miss, Zabka’s net debt to EBITDA ratio improved from 2.3x to 1.5x in 2024, based on management’s definition (pre IFRS16), surpassing the forecast of 1.9x. The management also confirmed a 100 basis point benefit from refinancing debt facilities, and including leases, net debt stood at £8.6 billion, marking a significant reduction in gross financial debt by 13% YoY.

Morgan Stanley said the focus of the latest financial release was on margins and guidance for 2025, following a January trading update that had already disclosed sales to end customers and store openings.

Their analysts added that the company’s performance in terms of revenue growth remained robust, but the impact of one-off expenses and higher depreciation and amortization charges has cast a shadow over the results, leading to the stock’s downturn in the trading session.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com -- WH Smith shares climbed 2% following the company’s announcement of a successful refinancing.

The British retailer has secured £200 million in US Private Placement notes with maturities of 7, 10, and 12 years, alongside a new three-year term loan featuring two one-year extension options. This move is aimed at refinancing the firm’s £327 million convertible bond due on May 7, 2026.

The new debt financing arrangements are expected to increase the income statement cost to 6.3%, or approximately £20 million, compared to the 4.6% cost, or around £15 million, associated with the convertible bond. This represents an increase of about £5 million on a full-year basis.

However, the impact on WH Smith’s Free Cash Flow is anticipated to be more significant due to the discrepancy between the income statement cost and the cash cost of the convertible bond.

Despite the higher cost of the new financing, the certainty it provides appears to have reassured investors. The company’s forecast for profit before tax (PBT) in the fiscal year 2027 stands at £194 million, below the Bloomberg consensus of £214 million.

The expected interest cost for FY27 is estimated at £25 million, a slight decrease from the £26 million forecasted for FY25. WH Smith’s net debt is projected to decline to £312 million in FY27E from £329 million at the end of FY25E.

The market is now looking ahead to the company’s next update, which will be the release of their first-half results on April 16th.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com -- Shares of Smiths Group Plc (OTC:SMGZY) rose on Tuesday after the engineering firm reaffirmed its full-year outlook, despite a cyber security incident in January that disrupted operations at its John Crane division. 

The company posted a 9.1% organic revenue increase for the first half of 2025, with operating profit margins at 16.7%, supporting its twice-raised full-year guidance.

The London-listed industrial technology firm reported £1.61 billion in revenue, slightly above consensus expectations of £1.60 billion. EBITA stood at £269 million, marginally missing the consensus forecast of £271 million, while earnings per share of 55.5p outperformed analyst expectations.

The cyber attack in January impacted John Crane, Smiths Group’s industrial seals and filtration division, as it disrupted shipments and affected profitability. Barclays analyst Jonathan Hurn noted that John Crane’s organic growth was limited to 3.8% in the first half as a result, and the company does not expect to recover the lost shipments in the second half.

Despite this setback, the company’s Interconnect division posted a strong performance, recording 26.8% organic growth, while Smiths Detection grew 15.3%. 

However, the Flex-Tek unit saw its margin decline by 140 basis points year-on-year to 19.8%.

The earnings report was described as "in line" with expectations by RBC Capital Markets analysts who said the company’s break-up strategy remains on track. 

The company reaffirmed plans to sell its Interconnect division by the end of 2025, while the future of the Smiths Detection unit remains under review.

Smiths also introduced new medium-term targets for its remaining businesses. RBC analysts pointed out that the company expects 5-7% organic growth, a rise from the previous 4-6% target, while profit margins are forecast to improve to 21-23% from the current 18-20%. 

Barclays’ also noted that these new targets signal a higher profitability outlook, driven by improved cost efficiencies and a better divisional mix.

Smiths Group maintained its full-year guidance for revenue growth of 4-6% and margin expansion of 40-60 basis points, despite the cyber incident’s impact. 

RBC analysts stated that the company’s share buyback program has completed £150 million of its planned £500 million, and further bolt-on acquisitions, such as a £32 million deal for Flex-Tek, are expected to support growth.