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SMALL-CAP WINNERS & LOSERS: Costain trades well; RBC cuts Capita

10th Jan 2024 10:16

(Alliance News) - The following stocks are the leading risers and fallers among London Main Market small-caps on Wednesday.

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SMALL-CAP - WINNERS

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Costain PLC, up 7.0% at 67.00 pence, 12-month range 39.05p-67.29p. The construction and engineering firm is appointed by Northumbrian Water to deliver a strategic infrastructure programme. The framework contracts are worth up to GBP670 million over a 12-year period. The contract begins immediately, running for an initial seven-year term, with an option for a five-year extension. Costain also says it is on track to deliver on market expectations for adjusted operating profit in 2023, following a positive year of trading. Net cash is GBP164.4 million at December 31, which is up from GBP123.8 million a year before and significantly above market expectations of GBP128.6 million. This reflects higher financial income, strong working capital and GBP25.0 million of positive working capital timings, it says.

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Hostelworld Group PLC, up 4.1% at 138.5p, 12-month range 101p-157.8p. The hostel booking company updates on its trading over 2023, reporting record net gross merchandise value of EUR619 million, a 32% increase from 2022, and revenue of EUR93.7 million, also up 32%. Net bookings climb 37% year-on-year to 6.5 million, while net bed-nights rise 30% to 22.7 million. Adjusted earnings before interest, tax, depreciation and amortisation of around EUR18.3 million exceed the upper end of market guidance of a EUR17.5 million to EUR18.0 million range. "Over 2023 we grew market share, delivered record revenues and increased operating leverage through a combination of reduced marketing spend (as a percentage of net revenue) and continued operating cost discipline to deliver Ebitda which exceeds the upper end of our guidance range," says CEO Gary Morrison.

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SMALL-CAP - LOSERS

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Capita PLC, down 7.5% at 20.16p, 12-month range 15.28p-44.92p. The outsourcing, consulting and digital services business falls as Royal Bank of Canada cuts the stock to 'sector perform' from 'outperform'. The Canadian bank also cuts its target price on Capita shares to 23p from 42p. RBC cites a "lack of short term catalysts", and concerns about visibility of cashflow generation.

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By Elizabeth Winter, Alliance News deputy news editor

Comments and questions to [email protected]

Copyright 2024 Alliance News Ltd. All Rights Reserved.

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