Royal Bank of Scotland Group (LSE: RBS) reported a surprise boost in profitability for the second quarter of 2015. Net profit in the three months leading to 30 June 2015 was £293 million, which represents a 27% increase on the same period last year. 

On a more downbeat note, adjusted operating profit fell 7% on the same period last year, to £1.81 billion, following the scaling back of its investment bank. Restructuring costs more than doubled on the preceding quarter to £1.05 billion, as the bank’s restructuring plan accelerated. In a bid to return to improve profitability, the bank has identified that it needs to shrink its investment bank further and dispose more non-core assets. Today’s quarterly earnings update shows RBS is far from completing its restructuring plan. There is also much uncertainty about the size of the impending regulatory penalties for the bank’s legacy issues.

Shares in RBS initially rose 4.7% to a high of 370.0 pence, before falling back to 354.8 pence (+0.5%) by morning trading.

Babcock disappoints

Continued softness in the defence sector sent shares in Babcock International Group (LSE: BAB) to fall 3.7% to 1000 pence by morning trading. But today’s update showed the company is on track to deliver growth in both revenue and earnings per share. Babcock’s order book remains stable at £20 billion, with 84% of revenue for the current financial year already reserved.

Babcock has been able to offset the weakness in the defence sector with growth from its support service division, which includes the decommissioning of nuclear power plants, rail network engineering and education support services. As underlying revenue and earnings growth trends remain intact, shares in Babcock are worth buying on recent weakness. Its forward P/E is just 13.9.

Takeover bid for Chime Communications

Today, Chime Communications (LSE: CHW) confirmed market rumours that it could face a takeover from a consortium that includes Providence Equity Partners LLC and WPP. Shareholders in Chime could receive a potential cash offer of 365 pence per share, and continue to receive an interim dividend for the current year of 2.53 pence per share.

Shares in Chime rose 26.3% to 346.8 pence by mid-morning trading. Chime’s board said “there can no be certainty that the Consortium will proceed to make an offer for Chime”. But, today’s share price reaction suggests the market expects a deal is very likely. WPP, which already owns 20% of Chime , is keen to bolster its presence in the sports marketing industry with the proposed takeover.

Although the WPP consortium is paying a hefty premium on Chime Communication’s recent share price, its offer may not fully reflect the company’s long term growth prospects. The delay of two major contracts have temporarily stunned the company’s recent revenue growth, causing the recent weakness in its share price. But with a growing client list and the 2016 Olympic Games getting closer, Chime could soon return to deliver strong double-digit earnings growth. At 365 pence per share, Chime is valued at just 13.8 times its projected 2016 earnings.

The post Today’s Updates From Royal Bank of Scotland Group plc, Babcock International Group plc & Chime Communications plc appeared first on The Twelfth Magpie.

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Jack Tang has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Gulf Marine

I’ll start with Gulf Marine Services (LSE: GMS), a provider of barges to the offshore oil industry, which only has a short track record as a quoted company — and not a great one, as the price slumped in 2014. But with the shares trading at 119p today they’re on a P/E of only 6.3 based on 2015 forecasts, dropping to 5 for 2016. There’s a drop in EPS expected this year, but a predicted 25% rise in 2016 would give the stock a PEG of only 0.2 — and growth investors typically consider 0.7 or less to be worth a closer look.

Stagecoach

Next up is transport firm Stagecoach (LSE: SGC), whose business is expected to enjoy a 20% growth in EPS in 2016 after a flat year to April 2015, and that would drop its PEG to 0.6. On top of that, there are reasonable and well-covered dividend yields of around 3% expected on the 372p shares, so there should be some income to bolster its growth potential. With a P/E of 12 for 2016, dropping to 11 on 2017 forecasts, Stagecoach looks attractive.

Chime

Chime Communications (LSE: CHW) provides PR and marketing consultancy services, and the City is expecting great things from it. After chief executive Christopher Satterthwaite told us that “2014 was a year of good growth and saw the development of CSM as a global player in the sport and entertainment marketing businesses“, there’s a massive 170% boost in EPS expected this year, with a more modest but still appealing 15% extra for 2016. That gives us PEG ratios for the two years of 0.1 and 0.6 with the shares at 288p, and that’s on top of dividend yields exceeding 3%.

Investec

Investec (LSE: INVP) shares are up 20% over the past 12 months to 610p, but two more years of forecast EPS growth giving us a 2016 PEG of only 0.6 suggests there’s plenty more to come — and an improving financial environment should be a great help to investment companies like Investec. Forecast P/E multiples should also drop from 12.7 for 2016 to just 11.2 in 2017 if forecasts come good, and we’re even looking at dividend yields approaching 5% by 2017!

Consort

Then there’s Consort Medical (LSE: CSRT), whose shares have nearly trebled in five years to 920p. Forecasts for the firm that develops drug delivery systems suggest that’s not the end of it, with double-digit earnings on the cards for the next two years. That would give us a PEG of 0.7, and with CEO Jon Glenn speaking of “important new development contract wins and meaningful progress with […] development and innovation pipelines” at results time, Consort could carry on delivering for years to come.

The post 5 Great Growth Opportunities: Gulf Marine Services PLC, Stagecoach Group plc, Chime Communications plc, Investec plc & Consort Medical plc appeared first on The Twelfth Magpie.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended Stagecoach. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.