29th Jan 2025. 8.54am

Regency View:
Update

Regency View:
Update
Costain builds momentum with £5.4bn order book
Costain (COST) has delivered a strong trading update for FY24, with adjusted operating profit and net cash levels aligning with market expectations. The group’s forward work position has soared to £5.4 billion, a remarkable £1.5 billion increase from the previous year. This robust pipeline, combined with strategic wins in Water and Rail projects, demonstrates the group’s ability to secure high-quality contracts in core markets.
The company continues to diversify its service offerings, with consultancy services playing an increasingly prominent role. Notable achievements include securing an EPCm award for bp’s Net Zero Teesside and Northern Endurance Partnership projects, alongside a second hydrogen FEED contract. These wins underscore Costain’s growing reputation as a leader in sustainability-driven infrastructure solutions, positioning it well to capitalise on the ongoing energy transition.

With a broadening Tier 1 customer base and increased activity within existing frameworks, Costain enters 2025 with optimism. The group’s elevated bidding activity and solid foundations signal further growth potential in operating profits and margins, providing a strong platform ahead of its full-year results announcement on 11 March.
Experian shows data-driven growth on a global scale
Experian (EXPN) delivered another strong quarter in Q3 FY25, with total revenue growth of 8% at constant exchange rates and organic growth of 6%.
Excluding data breach services, organic growth climbed to 8%, reflecting steady momentum across core markets. North America, which accounts for 68% of group revenue, saw organic growth of 6%, driven by robust performance in mortgage analytics, automotive, and health services. The company’s consumer-focused offerings also gained traction, with premium memberships and insurance marketplaces showcasing impressive growth.

Latin America’s performance was particularly noteworthy, with organic revenue growth of 8% and Consumer Services surging by 22%. Initiatives like the Limpa Nome programme in Brazil, which helps consumers manage their debts, played a pivotal role in this success. Meanwhile, the UK and Ireland achieved modest organic growth of 1%, tempered by a subdued economic backdrop. However, strong demand for subscription services and enhancements to the credit marketplace indicate that there’s potential for recovery in this region.
The EMEA and Asia Pacific division delivered standout growth of 9% organically and 35% total growth at constant exchange rates, bolstered by the acquisition of illion. With a focus on innovation, strategic partnerships, and expanding its presence in high-growth regions like Australia and India, Experian continues to position itself as a leader in data and technology. Management remains confident in meeting its full-year guidance of 6-8% organic growth, with margin improvements expected at the higher end of forecasts.
easyJet fall despite strong Q1 performance
easyJet’s (EZJ) shares have taken a dip despite a solid Q1 performance, with the airline reducing its headline loss before tax by 52%, down to £61 million, a £65 million improvement from last year. While passenger growth of 7% and a significant 11% increase in capacity have driven positive operational results, the market response has been less than favourable.
Despite a flat year-on-year unit revenue (RASK), the airline benefited from reduced fuel costs, driving a 4% reduction in total CASK. The holiday business continued to perform well, delivering £43 million in profit, a 36% increase compared to last year. However, despite these positives, the market remains cautious.

Looking forward, easyJet expects an 8% increase in ASK capacity for FY25, alongside a 25% boost in customers for easyJet Holidays. However, its Q2 underlying unit revenue trends are expected to be modestly lower than Q1 due to capacity investments and the need for stimulation. Forward bookings remain strong, with 57% of Q2 seats sold, but the market is watching closely for any impact from the timing of Easter and prior-year adjustments, which could hit Q2 results.
While easyJet is on track to meet its medium-term target of over £1 billion in profit before tax, the recent dip in share price highlights investor caution, perhaps driven by the lower-than-expected revenue trends and a challenging operating environment. The airline’s ongoing focus on sustainability and its strong ESG credentials may help support long-term growth, but the immediate outlook remains under scrutiny.
Kier deliver strong performance and announce £20m share buyback
Kier Group (KIE) released a strong trading update for the six months to December 2024, confirming that performance remains in line with the board’s expectations.
The company’s order book grew by 2% to £11bn, providing clear visibility for FY25 with over 95% of revenue secured. Kier’s focus on maintaining high-quality, profitable contracts has delivered substantial growth, including new awards such as a £850m framework with Yorkshire Water and a £240m contract from the Ministry of Defence. This strengthens Kier’s position as a key player in sectors including transport, healthcare, defence, and nuclear infrastructure.

The group’s disciplined approach to managing its balance sheet continues to pay off, with net debt reduced to £38m from £136.5m in the prior year. Kier is set to report a net cash position of £17m as of 31 December 2024, marking a significant improvement. In light of this robust financial performance and strong cash generation, Kier has announced the launch of a £20m share buyback programme. This decision aligns with the company’s ongoing capital allocation strategy aimed at maximising shareholder returns while continuing to invest in its business and key growth areas.
Kier’s capital allocation priorities remain focused on reinvesting in the business, maintaining a disciplined approach to property investments, and targeting value-accretive acquisitions. The company is also committed to delivering shareholder returns through dividends, with a target dividend cover of around three times earnings. With a growing order book, a strong cash position, and a strategic focus on key infrastructure sectors, Kier is well-positioned to continue its momentum into the second half of the financial year.
Premier Foods reports solid Q3 growth and raises profit outlook
Premier Foods (PFD) has reported a solid Q3 performance for the period ending 28 December 2024, with group sales up by 3.1% and branded sales increasing by 4.6%.
The company’s Sweet Treats division, in particular, saw impressive results, with branded sales climbing 8.9%, driven by a strong Christmas performance for Mr Kipling, including a 20% increase in mince pie sales. Branded volumes grew by 7%, highlighting the ongoing success of Premier Foods’ volume-led growth strategy. Notably, the Group’s international sales surged 29%, driven by strong performances across all target regions, including a significant boost in North America and Australia.

Premier’s new categories also showed encouraging growth, with sales up by 38%, led by Ambrosia porridge pots and Cape Herb & Spice. The company’s recently acquired brands, The Spice Tailor and FUEL10K, both delivered double-digit revenue growth, as their innovative product offerings gained traction in the market. The Group’s focus on premium products continues to resonate with consumers, with items such as Ambrosia Deluxe desserts, Bisto Best gravy, and Mr Kipling Signature Brownie Bites seeing strong demand.
Looking ahead, Premier Foods has raised its full-year trading profit guidance to the upper end of expectations, following a successful Q3 and continued momentum in its branded revenue growth. With a strong pipeline of new products and expanding international presence, the company is well-positioned for further progress, with sales trends expected to become more balanced between volume and price in the coming quarters.
Whitbread sees positive growth in the UK and Germany
Whitbread (WTB) has made solid progress in its Five-Year Plan, with steady performance in the UK and strong growth in Germany.
For the third quarter of FY25, UK accommodation sales were stable compared to last year, while Germany saw a 19% increase in accommodation sales. Group sales were down slightly by 2%, mainly due to a reduction in food and beverage sales as part of the Accelerating Growth Plan. Premier Inn continues to outperform the midscale and economy sector in the UK, with a 0.8 percentage point lead in accommodation sales growth over its competitors.

In Germany, Whitbread’s performance remains robust, with a 23% increase in accommodation sales in local currency. The company is on track to achieve profitability on a run-rate basis this year, a key milestone in its goal to become Germany’s top hotel brand. The maturing estate and commercial initiatives have driven RevPAR (Revenue per Available Room) up to €71, with more established hotels seeing €79, well ahead of the wider market.
Looking forward, Whitbread remains confident in hitting its FY25 targets. The company continues to push forward with its cost efficiency programme and its Accelerating Growth Plan, which is expected to drive long-term profit improvements. The group is also on track to meet its £300m incremental profit target by FY30. As part of its commitment to enhancing shareholder value, Whitbread completed a £100m share buyback in November 2024.
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