Balfour Beatty jump on strong full-year results

Balfour Beatty’s (BBY) share price climbed earlier this month following the release of its full-year results, which showcased another year of profitable growth and strong cash generation.

The company’s diversified portfolio played a key role in its consistent performance, with both Construction Services and Support Services delivering profit growth. UK Construction margins continued to improve, while Gammon saw a 14% rise in revenue. Support Services delivered the strongest gains, with profit from operations up 16% on the back of solid revenue growth. Meanwhile, Infrastructure Investments exceeded disposal targets, helping to lift the valuation of its investment portfolio by 3% to £1.3 billion.

With a high-quality order book increasing by 12% to £18.4 billion, Balfour Beatty is well-positioned for further growth in 2025 and beyond. The company is particularly benefiting from demand in UK energy, transport, and defence, as well as strong momentum in US buildings. Chief Executive Leo Quinn highlighted the company’s strategic focus on disciplined project selection and risk management, ensuring the business remains resilient while capitalising on attractive opportunities in key growth markets.

Bytes Tech gap higher on market-beating update

Bytes Tech (BYIT) gapped higher last week after releasing a market-beating trading update, as investors reacted positively to another year of double-digit growth across key financial metrics.

The updated Microsoft incentive plan, which was embedded into the company’s strategic growth plans, had minimal disruption and is now expected to be a growth driver. Bytes Tech’s ability to navigate vendor programme shifts has been a consistent strength, and this latest update further cements its adaptability in a rapidly evolving IT landscape. Demand for software, AI, and IT services remained high across both corporate and public sector clients, with the company benefiting from deep vendor partnerships, strong customer relationships, and ongoing investment in talent.

CEO Sam Mudd highlighted that Bytes Tech is well-positioned to capture further growth as it expands its market share through superior customer service and expertise in high-growth areas such as AI adoption, cloud services, and cybersecurity. The company’s ability to win new business while increasing its share of wallet from existing customers has been key to its sustained success. With strong industry tailwinds and a resilient business model, Bytes Tech’s trajectory remains firmly upward ahead of its full-year results release in May.

Computacenter: Strong numbers, stronger reaction

Computacenter (CCC) delivered a solid performance in 2024, and the market responded with enthusiasm. Revenue edged up 0.6% to £6.96 billion, while gross invoiced income dipped slightly.

Cash generation was a highlight, with net cash inflow from operating activities rising to £417.1 million. This supported a £200 million share buyback and a 9.2% increase in the total dividend to 70.7p per share. Adjusted net funds climbed to £482.2 million, reinforcing the company’s ability to invest in future growth while returning capital to shareholders. The balance sheet remains strong, providing flexibility for strategic expansion.

Looking ahead, Computacenter is entering 2025 with solid momentum. A strong order backlog and a healthy pipeline suggest further growth, even as macroeconomic uncertainty lingers. While cost pressures and supply chain challenges remain, the company’s scale, operational efficiency, and recurring services revenue should help it navigate the environment.

Volution delivers strong growth as earnings beat expectations

Volution (FAN) has continued what’s been a strong earnings season on balance for our FTSE Investor live positions, delivering solid interim results that saw the market take notice.

The integration of Fantech is progressing well, adding to Volution’s already strong geographic diversification. UK residential sales remained robust, helped by regulatory tailwinds and an extensive product range, while Central Europe and Australia also delivered solid growth. That helped offset weaker demand in New Zealand, UK OEM, and the Nordics. Management’s focus on procurement efficiencies, product mix, and working capital optimisation supported the margin expansion.

With a 21.4% increase in the interim dividend and full-year earnings now expected to exceed consensus, Volution enters the second half with strong momentum. Its market-leading position, structural growth drivers, and disciplined cost management provide confidence that it can continue to deliver in an uncertain macroeconomic environment.

Kingfisher falls on weak annual profit

Kingfisher (KGF) shares dropped after reporting a 35.4% decline in statutory pre-tax profit for the year ended 31 January 2025, falling to £307 million from £475 million the previous year. Sales slipped 0.8% in constant currency terms to £12.78 billion, with like-for-like sales down 1.7%.

Management pointed to disciplined cost control as a key focus, with £120 million in structural cost reductions and a 50-basis-point improvement in gross margin. However, operating profit fell sharply by 29.7% to £407 million, reflecting weaker trading conditions. Adjusted pre-tax profit came in at £528 million, down 7%, broadly in line with initial guidance. Free cash flow remained stable at £511 million, and the company reiterated its confidence in delivering over £500 million in annual free cash flow from FY 26/27. Looking ahead, Kingfisher expects adjusted pre-tax profit for FY 25/26 to range between £480 million and £540 million, with continued focus on margin management and cost efficiencies.

CEO Thierry Garnier acknowledged near-term challenges, particularly rising costs in the UK and France following recent government budgets, which have weighed on consumer sentiment. Nevertheless, he struck an optimistic tone on the company’s longer-term prospects, citing progress in strategic initiatives and Kingfisher’s best operational shape in years. The company’s e-commerce marketplaces, now live in multiple regions, saw gross merchandise value rise by 62%, while trade customer sales (excluding Screwfix) surged 53% year-over-year. Despite the tough environment, Kingfisher remains focused on driving further market share gains and managing costs and cash effectively.