Regular discrepancies between a company’s adjusted and reported profits are always worth closer inspection – and a closer look at the accounts of leading bus and rail operator FirstGroup (FGP) shows why. Restructuring costs and provisions feature prominently in the group's numbers, giving a misleading impression of profitability and raising the question of whether such 'exceptionals' are just a regular cost of doing business.
Equally impenetrable are the somewhat messy accounts of mini-conglomerate Stobart (STOB) – it looks like it has a good asset on its hands in Southend Airport, but mixed performances elsewhere in its portfolio and a reliance on Ebitda as a performance metric mean valuing the shares is tricky. Likewise Fevertree Drinks (FEVR), whose trading update this week lacked the detail we needed to assess how well it's all-important US expansion is going.
News from the housebuilding sector rounds off this week's analysis. Bovis's move for Galliford Try's (GFRD) housbuilding division, Linden Homes, and an update from Telford Homes (TEF) offering detail on progress with its Build to Rent initiatives suggest change could be afoot in this economically critical industry.
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