Wood Group, Premier Foods, Spirent Communications

These three FTSE 250 firms have been moving sharply in Tuesday business. Here are the key takeaways from their latest market updates.

Wood Group

Oilfield services and engineering specialist Wood Group’s share price rocketed 15% to 222.5p as it rejected a fresh takeover attempt from Apollo Asset Management.

The engineer said it rejected a cash offer from the US private equity giant on Monday to buy its shares for 237p apiece. This put a value of around £1.9 billion on Wood Group.

Late last month Wood Group said it had rejected three previous unsolicited approaches from the private equity firm, the latest of which on 26 January stood offered to buy the FTSE 250 firm for 230p per share.

Wood Group said today that “the board believes this latest proposal continues to undervalue the group and is therefore minded to reject… [It] will continue to engage with its shareholders and intends to engage further, on a limited basis, with Apollo.”

UK takeover rules mean that Apollo must now declare a firm intention to make an offer or announce it doesn’t intend to make a bid. This must be made by 22 March, though this can be extended with the consent of the Takeover Panel.

Wood Group’s racked up significant multi-year contracts with fossil fuel and chemicals giants BP, Shell and Ineos last year. Revenues rose 8% at constant currencies in 2022 to around $5.4 billion, while its order book increased by mid-to-high single digit percentages to $6 billion.

PremierPINC
Foods

The Premier Foods share price leapt 12% to 128.4p per share after it hiked its trading forecasts for the full year.

The business — whose popular brands include Mr Kipling cakes, Homepride cooking sauces and Bisto gravy — said that it has “continued to trade strongly in recent weeks, bringing the momentum it delivered in quarter three into the final quarter of the year.”

It predicts revenues growth of 10% for the current quarter and, as a consequence, now expects trading profit and adjusted pre-tax profit for the full year (to March 2023) to beat expectations. These are projected to come in at £155 million and £135 million respectively, which would represent year on year growth of 10%.

Premier Foods said that its core Grocery division “continues to lead the way,” while improvements at its Sweet Treats cakes unit are still rolling on. Its International operations meanwhile “will deliver another quarter of strong sales growth,” it added.

Net debt is expected to come in line with last year’s levels of £285 million, the company said. This is in line with prior estimates.

Spirent Communications

A warning of worsening trading conditions has sent Spirent Communications’ share price plummeting 12% to 185p.

The telecoms testing business said that “we have seen delays to some of our customers’ decision making” since the final quarter of 2022. It said that this reflected the difficult macroeconomic environment, and noted that these pressures were expected to last for the first half of the new year.

However, Spirent commented that “we anticipate these delays to be temporary, since the majority of 5G investment globally is already committed and non-discretionary.”

Revenues at the FTSE 250 business rose 5% in 2022 to $607.5 million, it also announced today, while adjusted profit before tax increased 11% to $131.4 million. The full-year dividend was raised 12% year on year to 7.57 US cents per share.

For 2023 Spirent expects revenues to “decline slightly” owing to current pressures. It added that gross margins are predicted to remain unchanged at 72%.