Three companies forecast to deliver earnings growth over the next few years released first-half results on Friday. I’ve been watching all three as potential growth shares to tuck away for a few years. And the results have been mixed.
Investing
Investment managers are suffering from funds outflows right now, with investors shunning risk. But I wasn’t expecting to see such a big profit fall at Jupiter Fund Management (LSE: JUP).
Underlying pre-tax profit slumped to £29.7m, from £78.2m in the first half of 2021. But the Jupiter share price is down only 5% at the time of writing. Maybe investors already feared the worst, having seen a 55% drop over the past 12 months.
Profits suffered from reduction in performance-related fees, which is hardly surprising. Excluding net performance fees, the profit dip looked less painful, down from £79.8m to £53.9m.
This does show the risks of investing in fund managers. But if I want long-term growth shares, I know I have to expect it from time to time.
Moving
Turning to another sector under pressure, I see the Rightmove (LSE: RMV) share price has also fallen 55% in the past 12 months.
After Friday’s H1 results, the shares dipped another percent or so. The outlook for the estate agent business in the second half of the year might be a bit cloudy. But the first half, at least, saw a 9% increase in revenue with underlying earnings per share up 7%.
The company boosted its interim dividend by 10%, which I’d say shows confidence. And Rightmove has been returning cash through share buybacks too.
Rightmove’s profits have been erratic in recent years. But forecasters do see earnings growing, if slowly, over the next few years. Is this another growth candidate to buy while it’s down?
Testing
To complete a trio of fallers on the day, I turn to Intertek (LSE: ITRK). Shares in the testing and inspection specialist are down 5% as I write, having fallen 43% over 12 months.
Intertek recorded a 9.5% rise in revenue at constant exchange rates, with like-for-like revenue up 4.9%. Adjusted operating profit increased by 4% too, and I’m seeing decent results all round here.
So why isn’t the market impressed? It might be because the company didn’t increase its interim dividend, maintaining it at last year’s 34.3p. But Intertek is not really an income stock anyway, and analysts are again predicting continued earnings growth over the next couple of years.
On the same day, Intertek announced the acquisition of Clean Energy Associates, described as “a market-leading independent provider of quality assurance, supply chain traceability and technical services to the fast-growing solar energy and energy storage sectors.”
Growth?
Rightmove and Intertek are both on relatively lofty valuations, after their share price falls. So that might well hold back their share prices in the shorter term. But I can’t help thinking I’m looking at a couple of long-term growth opportunities here.
Jupiter, meanwhile, is one I’ve always liked. But I do expect to see share price volatility over the years.