FTSE 250 movers: Kainos bounces on upbeat earnings

(Sharecast News) - FTSE 250: 19,582.84, -0.17% at 1500 GMT. IT provider Kainos hained as the firm posted a jump in first-half profit and revenue on Monday as it hailed strong underlying demand.

In the six months to 30 September, adjusted pre-tax profit rose 16% to £34m, on revenues of £179.8m, up 26% on the same period a year earlier. Revenue from digital services was 17% higher at £110.5m, reflecting increased demand for digital transformation primarily across the public and commercial sectors.

Meanwhile, Workday Services revenue grew 44% to £48.4m, driven by growth in North America. Workday Products revenue increased to £20.9 m, up 45% on the year.

In addition, Kainos said bookings were up 18% during the half to £221.5m.

Chief executive Brendan Mooney said: "As the digital transformation market enters its second decade, it continues to grow in importance for organisations operating in government, in healthcare and in the commercial sector.

"This importance is translating into continued demand for the work that we do for our customers, not just in the last six months but also looking to the future. Despite the economic uncertainty, there is an urgency from our customers about extending existing projects and starting new projects."

Beazley was in the black after RBC Capital Markets reiterated its 'outperform' rating on the shares and lifted the price target to 775p from 675p.

Investec cut its rating on Close Brothers Group to 'sell' on Monday, after a spike in the merchant bank's share price.

Investec, which has cut its rating to 'sell' from 'hold', said that after a four-week 26% rally, Close Brothers' shares were trading at 1.2 times 2023 estimated full-year tangible net asset value, "which for a UK bank rather feels like a price-to-NAV multiple from a bygone era".

Analyst Ian Gordon continued: "Ahead of Close Brothers' first quarter [trading update], due Thursday, we don't have any particular new concerns: we continue to expect slowing loan growth and slightly higher impairments within the dominant banking division to act as a drag to group profitability/returns.

"Close Brothers' return on tangible equity was an 'ordinary' 12% in 2022, which will likely decline through 2023-2025."

He added that "in essence, this is a straight-forward valuation call. We believe Close Brothers is now a little too expensive on an absolute basis, with significantly bitter value available elsewhere in the sector, notably OSB Group, Virgin Money and Barclays - all 'buys'."

Close Brothers' target price, of 1,025p, has been left unchanged.

FTSE 250 - Risers

QinetiQ Group (QQ.) 347.20p 4.20% Baltic Classifieds Group (BCG) 153.60p 3.50% Hikma Pharmaceuticals (HIK) 1,435.50p 3.50% Carnival (CCL) 795.20p 3.43% Beazley (BEZ) 627.00p 3.38% Kainos Group (KNOS) 1,484.00p 3.20% Volution Group (FAN) 362.50p 3.13% Chemring Group (CHG) 305.00p 2.87% Ascential (ASCL) 235.60p 2.43% PureTech Health (PRTC) 241.00p 2.34%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 146.65p -7.59% Bridgepoint Group (Reg S) (BPT) 233.00p -5.44% Close Brothers Group (CBG) 1,076.00p -4.86% FDM Group (Holdings) (FDM) 652.00p -4.82% Ferrexpo (FXPO) 142.00p -4.18% Johnson Matthey (JMAT) 2,101.00p -3.93% Urban Logistics Reit (SHED) 146.50p -3.30% Hays (HAS) 116.70p -2.91% Mitchells & Butlers (MAB) 143.80p -2.84% Paragon Banking Group (PAG) 450.60p -2.64%