LONDON BRIEFING: Downbeat Ryanair says financial 2022 to be breakeven

(Alliance News) - Ryanair on Wednesday said it expects to report a pre-exceptional net loss of ...

Alliance News 7 April, 2021 | 8:07AM
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(Alliance News) - Ryanair on Wednesday said it expects to report a pre-exceptional net loss of between EUR800 million and EUR850 million for the financial year that ended March 31, narrowed from the previously guided range of EUR850 million to EUR950 million.

The budget airline said it carried 27.5 million passengers in financial 2021, down from 149 million in financial 2020, due to flight cancellations and travel restrictions related to Covid-19.

Easter travel restrictions and lockdowns alongside a delayed traffic recovery into the peak summer 2021 season, due to the slow rollout in the EU of Covid-19 vaccines, means that 2022 traffic is likely to be towards the lower end of the previously guided range of 80 million to 120 million passengers, Ryanair noted.

"While it is not possible (at this time) to provide meaningful 2022 profit guidance, we do not share the recent optimism of certain analysts as we believe that the outcome for 2022 is currently close to breakeven," Ryanair said.

The company said its balance sheet remains strong, with year-end net cash of EUR3.15 billion and 84% of its owned fleet of 420 Boeing 737 jets unencumbered.

The airline said it will issue it annual results on May 17.

Ryanair shares were up 0.6% early Wednesday.

Here is what you need to know at the London market open:

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MARKETS

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FTSE 100: up 0.3% at 6,846.50

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Hang Seng: down 0.9% at 28,681.03

Nikkei 225: closed up 0.1% at 29,730.79

DJIA: closed down 96.95 points, or 0.3%, at 33,430.24

S&P 500: closed down 3.97 points, or 0.1%, at 4,073.94

Nasdaq Composite: closed down 7.21 points, or 0.1%, at 13,698.38

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EUR: up at USD1.1881 (USD1.1843)

GBP: down at USD1.3783 (USD1.3848)

USD: down at JPY109.75 (JPY109.83)

Gold: down at USD1,740.55 per ounce (USD1,744.00)

Oil (Brent): down at USD62.75 a barrel (USD63.42)

(changes since previous London equities close)

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ECONOMICS AND GENERAL

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Wednesday's Key Economic Events still to come

0930 BST UK CIPS-Markit services purchasing managers' index

0955 CEST Germany services PMI

1000 CEST EU eurozone services PMI

0700 EDT US MBA weekly mortgage applications survey

0830 EDT US international trade in goods & services

1030 EDT US EIA weekly petroleum status report

1400 EDT US FOMC meeting minutes and economic forecast

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UK Prime Minister Boris Johnson faces a battle to introduce domestic vaccine passports after running into fierce opposition from Tory critics and Labour. A government review into "Covid status certification" found they could "potentially play a role" in settings such as theatres, nightclubs and mass events, and might also be used in pubs and restaurants to reduce social distancing restrictions. The prospect of having to show a certificate to access shops or bars has outraged members of the Covid Recovery Group of Conservatives, while Labour hit out at the "discriminatory" and "poorly thought-through" proposals. The use of certificates – which would include vaccination status, test results or evidence of someone having contracted and recovered from Covid-19 – is opposed by at least 40 Conservative MPs. With Labour's opposition also hardening, along with the SNP raising concerns, the government would face difficulties in getting the measures through the Commons if Johnson pushed them to a vote. Ministers have ruled out bringing in certification for either the April 12 or May 17 stages of the road map but the documents – either in paper form or on an NHS app – could be introduced later this year.

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Ireland's services sector recorded a jump in activity in March, IHS Markit survey data showed, with confidence climbing to a near three-year high. The services business activity index mounted a huge a rise to 54.6 points in March, back above the 50.0 no-change mark, after recording 41.2 points in February. Markit noted the 13.4 point rise was the second highest in survey history, topped only by a 16.3 point gain in June last year, when the sector was buoyed by an easing of virus restrictions. New business climbed for just the second time in 13 months, helped by improving foreign demand. "Companies reported stronger sales to European and US markets and also the resumption of UK business following a pause at the start of 2021," Markit explained.

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BROKER RATING CHANGES

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JPMORGAN RESUMES AVIVA WITH 'OVERWEIGHT' - TARGET 510 PENCE

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BARCLAYS CUTS KAZ MINERALS TO 'EQUAL WEIGHT' ('OVERWEIGHT') - TARGET 869 (900) PENCE

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JEFFERIES RAISES PPHE HOTELS TO 'BUY' ('HOLD') - TARGET 1850 (1150) PENCE

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BERENBERG RAISES GREATLAND GOLD TO 'BUY' ('HOLD') - TARGET 26 (33) PENCE

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COMPANIES - FTSE 100

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The trial of the Oxford University and AstraZeneca vaccine in children has been paused while regulators investigate reports of a rare form of blood clot among adults. Oxford said that no safety concerns have arisen from the trial itself, but it is waiting for more information from the Medicines & Healthcare products Regulatory Agency before giving any more vaccinations. Regulatory bodies from the UK, Europe and the World Health Organisation are assessing data on the jab and a potential association with a rare form of blood clot. The WHO and the European Medicines Agency have confirmed they will publish findings later this week.

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Croda International said its fragrances and flavours subsidiary, Iberchem, has agreed to acquire Grasse, France-based fragrance business Parfex for a total enterprise value of EUR45 million. Parfex creates fragrances mainly for premium personal care and fine perfumery markets. Parfex is 82% owned by its founders with the remaining free float of shares listed on the Euronext Access market. Croda said it has agreed to acquire 93% of Parfex's outstanding shares, comprising the founding shareholders and some minority investors. Croda expects to acquire the total outstanding share capital, subject to a potential tender offer and subsequent de-listing. The deal is expected to close by the end of the second quarter of 2021.

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COMPANIES - FTSE 250

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Hilton Food Group said it delivered resilient annual results, underpinned a strong performance with both volume and profit growth. The food packaging business highlighted that lockdowns, including travel restrictions, resulted in more cooking at home - thereby creating higher demand for its products. For the financial year that ended January 3, revenue was GBP2.77 billion, up 53% from GBP1.81 billion the year before, and pretax profit was GBP54.0 million, up 25% from GBP43.2 million. Hilton Food raised its total dividend by 22% to 26.0 pence from 21.4p. Looking ahead, Hilton Food said its operating performance since the beginning of 2021 has been in line with the board's expectations.

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COMPANIES - MAIN MARKET AND AIM

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Saga, which provides insurance and travel to people over 50, reported a GBP61.2 million pretax loss in the financial year that ended January 31, narrowed from a GBP300.9 million loss the year before. However, on an underlying basis, profit fell by 84% to GBP17.1 million from GBP109.9 million, amid Covid-19 restrictions. Saga said it is ready to resume tour and cruise operations as soon as allowed. "Customer demand remains strong, with evidence of significant pent-up demand from customers ready to travel," it said. Total cruise bookings are GBP154 million for financial 2022 and 2023 combined, up 20% from GBP128 million at the same point last year.

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The Independent Workers' Union of Great Britain said hundreds of Deliveroo workers will strike on Wednesday over pay and "basic workers' rights". Riders from the union will take industrial action against the food delivery platform Wednesday to coincide the London initial public offering of Deliveroo Holdings, whose shares start trading unconditionally on Wednesday. Socially distanced protests are being organised in London, York, Sheffield, Reading, Wolverhampton. Deliveroo flopped on its London debut last week, at one point crashing more than 30% on the first day of conditional dealings. The Financial Times reported that US bank Goldman Sachs bought GBP75 million in Deliveroo shares to prop up the IPO. Citing Bloomberg data, the FT said that the purchases by Deliveroo's underwriters equate to nearly a quarter of the value of shares traded in Deliveroo during its first two days as a public company last week.

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COMPANIES - GLOBAL

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French asset manager Amundi said it is in talks to buy Societe Generale SA's Lyxor unit for EUR825 million. Lyxor manages EUR124 billion of assets and is a "key player" in the exchange-traded fund market, Amundi said. Amundi said the deal would make it the "European leader in ETF". Credit Agricole has roughly a 70% stake in Amundi, which was Amundi was formed following a merger of SocGen and Agricole's asset management arms. SocGen sold its stake in the company during Amundi's 2015 stock market float.

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Wednesday's Shareholder Meetings

Law Debenture Corp - AGM

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By Tom Waite; thomaslwaite@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Greatland Gold PLC 18.00 GBX 0.00 -
KAZ Minerals PLC
Aviva PLC 387.30 GBX -1.48
Ryanair Holdings PLC 16.51 EUR -1.55
Saga PLC 355.60 GBX -3.47 -
PPHE Hotel Group Ltd 1,550.00 GBX 3.33 -

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