(Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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easyJet posted its first annual loss in its 25-year history as the coronavirus crisis grounded its fleet and hammered demand for travel. Total revenue in the financial year to the end of September fell 53% to GBP3.01 billion, with passenger numbers down 50% to 48.1 million. The low-cost airline swung to a pretax loss of GBP1.27 billion from a profit of GBP430 million the year before. The headline pretax loss was GBP835 million, turning from a GBP427 million profit. easyJet grounded its entire fleet for 11 weeks during the national lockdowns seen in the spring to early summer, as governments across the globe tried to halt the spread of Covid-19. "Whilst there was some recovery in demand as travel restrictions eased during the summer, widespread quarantine measures introduced in September once again eroded demand and consumer confidence to travel," the firm noted.
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Imperial Brands reported sharply higher profit in its recently ended financial year, amid higher revenue and a prior year Premium Cigar division impairment. FTSE 100-listed tobacco firm Imperial Brands said revenue in the financial year to September 30 rose 3.1% to GBP32.56 billion, and pretax profit increased 28% to GBP2.17 billion from GBP1.69 billion. The company reported a GBP147 million impairment of goodwill and equity investments in its Premium Cigar division in financial 2019, with no such impairment in financial 2020. The Premium Cigars business was sold back in October, with proceeds used to reduce debt. Adjusted pretax profit was GBP3.14 billion, down 6.0% from GBP3.34 billion the year before. Net revenue was GBP7.99 billion, down 0.1% at actual currency from an adjusted GBP8.00 billion in financial 2019, but up 0.8% at constant currency.
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Experian described its first-half of trading as "resilient", after total revenue slipped slightly, but grew at both a constant currency and organic basis. In the six months ended September 30, the credit checking company posted revenue of USD2.49 billion, inching 0.3% lower year-on-year from USD2.50 billion. Experian's pretax profit dropped 4.6% to USD458 million from USD480 million. On a constant currency basis, revenue was 5% higher year-on-year and organically, it climbed 2%, amid a 2% first-quarter fall and a 5% second-quarter surge. Chief Executive Officer Brian Cassin labelled it a "resilient performance" against tough market conditions and noted that the second quarter organic growth was at the top end of guidance.
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Homeserve said it now sees full-year earnings ahead of prior expectations, following a better-than-expected first half and despite posting a significant drop in profit. For the six months ended September 30, Homeserve reported pretax profit of GBP10.1 million, a 49% drop from GBP19.7 million recorded the year prior. This was despite a 17% year-on-year rise in revenue to GBP536.7 million from GBP457.7 million, as demand for home remodellings surged during the Covid-19 lockdown. Revenue growth was aided as well by growth in Homeserve's North American business and the inclusion of income from recently purchased Home Experts business Elocal. Homeserve said the fall in profit was due to the absence of exceptional gains recorded in the prior period of GBP7.4 million and higher acquisition-related amortisation of GBP23.0 million compared to GBP16.3 million a year ago. Adjusted pretax profit was up 16% to GBP33.1 million.
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MARKETS
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Stock markets took a pause on Tuesday after further good vaccine news - this time from US pharma firm Moderna - drove equities higher on Monday. easyJet shares were down 2.6% at 757.07 pence.
"It is very encouraging to hear that great strides are being made on the coronavirus front but even if the drug is approved, it could take months to get rolled out. Broadly speaking, the stocks that outperformed yesterday – airlines and pub groups – are in the red today," said David Madden, market analyst at CMC Markets.
Wall Street is on course for a mixed start, with the Dow Jones called down 0.3% and the S&P 500 seen 0.4% lower. The tech-heavy Nasdaq, however, is on course for a 0.2% higher start.
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FTSE 100: down 0.7% at 6,379.70
FTSE 250: down 0.1% at 19,586.39
AIM ALL-SHARE: up 0.6% at 1,012.82
GBP: higher at USD1.3247 (USD1.3186)
EUR: higher at USD1.1876 (USD1.1840)
GOLD: soft at USD1,888.43 per ounce (USD1,889.70)
OIL (Brent): lower at USD43.83 a barrel (USD44.40)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK Health Secretary Matt Hancock was unable to rule out an extension to the lockdown as a health chief warned the tiered system that ministers want England to return to may have to be strengthened. Hancock said it was "too early for us to know" whether coronavirus cases will be brought down sufficiently to ease the second shutdown on December 2. Boris Johnson hopes the nation will return to local restrictions, but Public Health England's Susan Hopkins – standing alongside Hancock at the Downing Street press conference on Monday – said the lowest tier of earlier measures had had "little effect". Hopkins, who is advising the government's Covid-19 response, said they would have to consider strengthening the measures "to get us through the winter months until the vaccine is available for everyone". That goal of securing a vaccine moved a step closer after early data showed a new jab to be almost 95% effective in protecting against the virus.
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UK Prime Minister Boris Johnson has been urged to negotiate an adjustment period into any final trade agreement with the EU to provide "breathing space" of up to six months for businesses. The post-Brexit trade talks have entered into a decisive week, with cabinet ministers among those signalling that the discussions have entered into last chance saloon territory. With Thursday touted as the latest deadline for negotiations, the Liberal Democrats and a leading business figure have joined forces to press the prime minister to effectively extend the transition period to give businesses more time to adjust to any new regulations. The transition period is due to end on December 31, meaning a new customs regime and other new Brexit-related rules are due to come into force at the start of next year.
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A German minister of state urged Poland and Hungary on Tuesday to drop their veto on a key decision needed to pass the bloc's EUR1.8 trillion economic recovery package. "Our citizens in all member states count on our support. There are no excuses for further delays," Minister of State for Europe Michael Roth said, stressing the importance of unlocking the EUR1.1 trillion long-term budget and EUR750 billion stimulus fund on time. "It's not the time for vetoes, but for acting swiftly and in the spirit of solidarity," he said ahead of a video conference with his EU counterparts. Budapest and Warsaw withheld their support for a key decision on how to fund the shared 2021-2027 EU spending plan on Monday due to a separate dispute over what they see as interference in their domestic rule-of-law affairs by EU officials and the other 25 member states.
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Germany's labour market recovered slightly in the third quarter, when the country's workforce grew by 0.1% to reach 44.7 million people, Destatis reported. However, in seasonally adjusted terms, the quarter-on-quarter change was in fact negative at minus 0.1%, according to the provisional data. Compared to the same period last year, Germany had 654,000 fewer people in employment, a drop of 1.4%, Destatis said. The coronavirus pandemic is expected to drag Europe's largest economy into a severe recession this year, although a government-funded furlough programme has largely warded off mass lay-offs. Destatis said the sectors most affected by falling employment were trade, transport, and accommodation and food services, while a decline was also observed in industry.
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