2 Footsie growth stocks I’d buy before it’s too late

Bilaal Mohamed explains why these two blue-chip shares could be about to surge.

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Earlier this month, London-listed payment processing giant Worldpay (LSE: WPG) announced a very encouraging set of full-year results for 2016. The global payments group revealed that during the 12 months ending 31 December the company saw a 14% rise in the number of transactions processed to 14.9bn, a significant improvement on the 13.1bn it reported for the previous year. But does that make it a buy?

300 payment types

The London-based FTSE 100 group provides an extensive range of technology-led payment products and services to around 400,000 customers, enabling their businesses to grow and prosper. Using its global network and advanced technology Worldpay is able to process payments across 146 countries, and in 126 currencies, allowing its customers to accept 300 different payment types.

During the calendar year 2016, the total value of transactions it processed climbed 12% higher to £451.1bn, helping to achieve a 15% improvement in net revenue to £1.12bn. Total revenue generated also came in 15% higher at £4.54bn, compared with £3.96bn the previous year. But the biggest improvement came in pre-tax profits which jumped to £264.1m, from just £19.1m in 2015, and a far cry from the £47.1m loss it suffered the year before.

New licenses

Worldpay continues to extend its market reach, delivering a substantial number of new products over the past year, and gaining new licenses in a number of territories, including Hong Kong, Singapore, Australia, and Brazil. Work is also underway to develop further partnerships and licences across Europe, Asia and Latin America, and this is being reinforced by strengthening its capabilities in regional offices to support further growth, particularly in Asia and South America.

I’m very optimistic about the future, given the company’s strategy to continually invest in technology and new products, and further extend its market reach. Furthermore, with almost half its income generated in the US, any adverse impact from Brexit should be minimal. Worldpay’s shares trade on a forward P/E ratio of 21.8 for the current year, falling to 18.8 for 2018. For me Worldpay remains a buy for steady long term growth.

Growth Acceleration Plan

International publishing and events group Informa (LSE: INF) is another blue-chip firm that’s recently announced positive results for 2016. The company reported an improved operating performance and continued progress with its ‘2014-2017 Growth Acceleration Plan’, supported by strong returns from acquisitions and favourable currency trends.

The London-based FTSE 100 group delivered an 11% rise in full-year revenue to £1.35bn, compared to £1.21bn for the previous year, with adjusted operating profit 13% higher at £416.1m. For the current year the group’s key priority remains the successful delivery of its ‘2014-2017 Growth Acceleration Plan’, while it ensures a smooth and effective integration with recently acquired Penton Information Services.

Informa’s share price has barely moved over the past 12 months, and with growth forecast to continue I think the forward P/E rating of 13.4 looks too cheap to miss.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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

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