Costain 2022 makes a positive impression with a bright future

1123 GMT – Costain’s 2022 results positively surprised the market, with adjusted pre-tax profit of GBP42.2m well ahead of market expectations, impressive cash performance and management confident of delivering further margin improvement, Peel Hunt says. The infrastructure company continues to handle industry headwinds well, with earnings benefiting from inflation recovery mechanisms, and while the order book fell 18% on the year, it was largely flat in the first half of the year, which is somewhat reassuring, Peel Hunt analyst Andrew Nussey said in a research note. “The shares are attractively valued… but we believe momentum in the order book remains key to further improving sentiment,” the UK brokerage said. Peel Hunt maintains its add rating and 60 pence price target on the stock. The shares are up 7.7% to 48.0 pence. ([email protected])

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UK Jobs Data and market turmoil make BOE Rate Decision a nail biter

1129 GMT – Britain’s data on the country’s labor market provides a little more color for any Bank of England policymakers thinking about voting for a smaller interest rate hike, Elizabeth Martins, senior economist at HSBC, said in a note. But it is not decisive, with hawkish jobs and public salary data, while vacancies, inactivity and private sector salary development are sufficient, says Martins. Depending on how the current market turmoil shakes out – amid the fallout from the collapse of Silicon Valley Bank – the UK may not be out of the woods in terms of easing labor market-driven inflationary pressures, she says. In February, HSBC had predicted a final increase of 25 basis points to 4.25%, but now there is a close relationship between that and no increase at all, says Martins. ([email protected])

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Costain shares look good given strong cash flow

1121 GMT – Costain’s shares look incredibly cheap given its 2022 results indicate adjusted free cash flow of GBP72.9m, almost 60% of the company’s full market value, Liberum says. The infrastructure company’s performance is impressive in a sector where cash generation is key, and it was not achieved at the expense of payments, Liberum analysts Joe Brent and Alex O’Hanlon said in a research note. “The dividend has not been reinstated, but the capital allocation policy has been reiterated and management recognizes the importance of dividends per share,” the brokerage says. Liberum maintains its buy recommendation and 80 pence price target. The shares are up 7.7% to 48.0 pence. ([email protected])

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Eneraqua delivers further growth in FY 2023 despite revenue miss

1109 GMT – Eneraqua Technologies’ financial year 2023 earnings update shows it continues to deliver on its organic growth strategy, with strong revenue growth and earnings growth expected to continue, Shore Capital says. The energy and water efficiency products provider’s fiscal 2023 revenue is well ahead of the prior year but missed consensus expectations, reflecting the phasing of project starts, Shore Capital analyst Robin Speakman said in a research note. “However, the strength of Eneraqua and the critical nature of services is reflected in higher gross margins, and notices a change in the mix of projects, with higher margin projects entering the latter part of the period,” says Speakman, adding that the company’s financials remain robust. Shore has no recommendation on Eneraqua’s shares. The shares are down 14% to 300.0 pence. ([email protected])

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Strong UK employment data could push BOE to raise rates

1102 GMT – Strong UK employment data could put pressure on the Bank of England to raise interest rates further, Premier Miton Investors chief investment officer Neil Birrell said in a note. “The UK labor market remains strong with employment increasing more than expected and wage growth remaining strong too,” he says. “Despite the problems in the banking system, the jobs data keeps the pressure on the Bank of England to act,” says Birrell. UK gilt yields rose after the report, with the 10-year yield at 3.478%, up around 9 basis points today, Tradeweb data shows. The 2-year gilt yield last traded at 3.447%, up around 6 bps. ([email protected])

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(END) Dow Jones Newswires

March 14, 2023 1:39 PM ET (5:39 PM GMT)

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