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John Lewis cuts losses | Kier back in black | Galliford Try

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5pm: Airlines soar on travel change talk

Airlines were among the best performers amid an expected shake-up of the travel quarantine rules.

British Airways parent International Consolidated Airlines Group closed 3.9% higher while Ryanair closed 8.3% higher after saying it now expects to deliver “more rapid traffic growth” over the next five years. EasyJet and Wizz Air were up 7.1% and 5.0% respectively.

The FTSE 100 managed to stay in positive territory, rising just 10.99 points to 7,027.48.


9.45am Phillip Morris ‘playing both sides’

Following tobacco giant Phillip Morris’s £1.1bn takeover of UK inhaler company Vectura, Danni Hewson AJ Bell financial analyst, said: “Despite the ethical outcry, Vectura shareholders have succumbed to Big Tobacco’s big pockets. 

“It will raise a few eyebrows not least because the deal was seen as a chance to weigh up exactly how some of the city’s big names were really walking the ESG walk they’ve talked so loudly about embracing.”

Full story here


9.30am: London holds on to gains

Energy companies have seen their share prices boosted by the recent record run in power prices.

Power station operator Drax is up 7.21% while SSE is 0.85% higher and National Grid is 0.6% better.

The FTSE 100 is holding on to its gains, up 36.26 points at 7052.75.


7am: Kier improves

Kier

Construction group Kier is back in profit after years of heavy losses.

The company posted adjusted operating profit of £100m (FY20: £41m) and a reported profit £44m (FY20: loss £196m) on revenue of £3.3bn (FY20: £3.5bn) for the year to the end of June.

The reduction in revenue was due to exiting non-core low margin and loss-making contracts, successful completion of the firm’s motorway upgrade projects and COVID-19 pandemic, partially offset by growth in core businesses.

Andrew Davies, chief executive, said: “The Group delivered a strong operational performance and materially improved results in FY21. We have completed the strategic actions set out in 2019 to simplify and focus the Group, improve cash generation and strengthen our balance sheet. 

“The successful capital raise, the recent sale of Kier Living, and the extension of the Group’s RCF facility provides Kier with the financial and operational flexibility to continue to pursue its strategic objectives within its chosen markets and will allow it to further enhance and capitalise on its position as a strategic partner to its customers.

“Current trading is in line with our expectations, and despite inflationary pressures and the impact of increased national insurance contributions, our outlook for the current year remains unchanged.

“We are now focused on delivering our medium term value creation plan by leveraging our attractive market positions, delivering our high-quality order book and fostering our long-term customer relationships and sector expertise.”


7am: John Lewis cuts losses

John Lewis store in St James

Department store and supermarket group John Lewis said the group made a loss after exceptionals of £29m for the half year, an improvement on last year’s loss before tax of £635m, which was dominated by a write down in the value of John Lewis stores.

This year is also down on the first half of 2019/20 when profit before tax was £192m because of a one-off gain from the closure of the defined benefit pension scheme.

Profit before exceptional items was £69m, which is £124m up on 2020/21, when the Group made a loss of £55m.


7am: Galliford Try positive

Civil engineer Galliford Try said profit before tax for the year to the end of June ws above previous guidance at £11.4m (2020: pre-exceptional loss £59.7m).

Divisional operating margin was ahead of expectations at 2%, showing strong progress towards the margin improvement target.

A proposed final dividend payment of 3.5p , together with an interim dividend of 1.2p gives a total dividend of 4.7p covered by 2.0x earnings from continuing operations.

The company has a positive outlook with a £3.3bn order book (2020: £3.2bn) positioned across chosen sectors.


7am: Ryanair raises growth forecast

Ryanair has raised its five-year growth forecast to 225 million passengers by March 2026.

The Irish airline said it expects to deliver traffic growth of 50% from the pre-pandemic figure of 149 million passengers a year.

This is up from the previous target of 33% and 200 million passengers a year by March 2026.


7am: C&C expects improvement

Drinks group C&C, owner of Tennent’s, has reported an improved performance for the first half.

In a trading update for the six months to the end of August, the Dublin-based group said that net revenue is expected to be €657m.

This compares with €398m the same time last year and €896m the previous year and in pre-Covid times.

C&C also said its operating profit for the six month period is expected to be €16m, compared to a loss of €12m in H1 FY2021 and a profit of €66m in H1 FY2020.


7am: The Artisanal Spirits Company

Scotch Malt Whisky Society

The Artisanal Spirits Company, the owner of The Scotch Malt Whisky Society said gross profits were boosted by the lifting of US tariffs while revenue rose 20% in the half year ended 30 June 2021.

In its maiden figures following its IPO earlier this year, the company reported gross profit up by 31% to £5.1m (H1 2020: £3.9m), while EBITDA before exceptional costs came in at £0.2m. There was a loss after tax of £1.1m (H1 2020: loss of £0.7m), a slight improvement on management’s expectations at the time of the IPO.

Full story here


Global markets

US markets were boosted by regional manufacturing statistics significantly beating expectations, raising sentiments ahead of the monthly retail sales data due later today.

The Dow Jones Industrial Average rose 0.7%, the Nasdaq Composite ended 0.8% higher and the S&P 500 added 0.9%.

Asian stock markets failed to pick up on the strong session in New York.

The Shanghai Composite was down 0.9% early today after retail sales in China came in below expectations, rising just 2.5% in August, well short of the 7% forecast.

The Hang Seng Index in Hong Kong was 2% lower, hit by heavy declines in the technology and casino sectors, two industries that have faced government crackdowns.

The Nikkei 225 in Tokyo was down 0.6%, but the S&P/ASX 200 in Sydney was 0.5% higher.



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