Yahoo Finance FTSE 100 Live 16 May: BT shares surge after results, easyJet and Sage under pressure
The shares of FTSE 100-listed BT Group, easyJet and Sage have experienced contrasting fortunes after the trio posted results.
New boss Allison Kirkby said BT is moving to the next phase of its transformation, having passed the peak of spending on full-fibre broadband.
BT’s shares surged, whereas the accounting software firm Sage and low-cost airline easyJet traded sharply lower.
FTSE 100 Live Thursday
BT shares surge on results cheer
Easyjet boss to stand down
Sage shares fall on FY guidance
City comment: Low-cost travel veteran deserves a long holiday
12:53 , Simon Hunt
Johan Lundgren will have earned a long holiday when he finally hands over the keys to the easyJet boardroom to his anointed successor Kenton Jarvis “early in 2025”.
His seven years in the corporate cockpit have been far from a smooth trip, to put it mildly.
Most importantly he navigated a path through the two torrid years of Covid lockdowns and travel restrictions that could easily
have killed off a less well run business.
But he will leave it as one of Europe’s biggest airlines with full-year profits likely to punch through the £1 billion mark this year if the summer season proves as strong as hoped.
The size of easyJet — it now operates a fleet of 343 aircraft — makes it easy to forget that the business is less than 30 years old, a true disruptor in an industry that was dominated by legacy
flag carriers when its first flight left Luton for Glasgow in November 1995.
One aspect of airline leadership that does not always get the attention it should is safety. EasyJet is rated one of the world’s safest airlines with an incredibly low serious incident rate. The culture of an airline starts at the top and for that Lundgren also deserves credit.
The handover appears to be well planned with an experienced insider lined up to take over in eight or nine months’ time. This is in stark contrast to the succession plans at HSBC, which also announced a CEO retirement late last month.
In a typically curmudgeonly reaction though, the markets were having none of it, marking the shares down 5% this morning. It seems they would have preferred an external appointment and rather more sprightly numbers today. There’s no pleasing some folk.
When Lundgren walks out of easyJet’s unmissable orange hangar of a headquarters at Luton for the last time early next year he can surely be allowed a modicum of satisfaction. By any standards easyJet is in decent shape.
Future and ATG lead FTSE 250, Vodafone recovery continues
10:33 , Graeme Evans
A strong performance by Go.Compare as motorists searched for car insurance deals today helped fuel a rebound for the FTSE 250 shares of Future.
The publisher, whose magazine titles include Marie Claire and Country Life, jumped by a fifth in value after its encouraging half-year results.
Reporting a return to revenues growth in the second quarter, chief executive Jon Steinberg backed up the improved trends by revealing another £45 million buyback of shares.
Price comparison business Go.Compare provided the standout performance in the half year as its revenues surged 30% to £96.1 million amid strong car insurance demand.
The shares later settled 146.4p higher at 1016.4p, their best level in a year and up more than 60% in less than a month. Despite the recent surge, Peel Hunt said the stock remained attractively valued based on its price target of 1210p.
Future was joined at the top of the FTSE 250 by another recovery story as Auction Technology Group jumped 12% or 58p to 550p following half-year results.
The company behind The Saleroom and BidSpotter pleased investors by confirming full-year guidance, having seen a 44% surge in revenues from its value-added service offerings.
The pair’s recovery helped the FTSE 250 index to outperform other leading European benchmarks following a rise of 15.53 points to 20,791.16.
Other midcap risers included the partnerships-focused housebuilder Vistry, which added 4p to 1295p after forecasting more than 18,000 completions in the current year. That’s an increase of 10% on the prior year and above its previous guidance.
The FTSE 100 index fell 35.21 points to 8410.59, a decline reflecting the impact of Shell, Tesco and Kingfisher trading without the value of their forthcoming dividends.
Big risers in the top flight included BT and Vodafone, with the latter adding another 1.1p to extend the recovery since Tuesday’s annual results to 10% at 77.2p. Investors also sensed value in Prudential shares after the Asia-focused insurer rallied 14.7p to 818.5p.
Sage commits to London listing as shares sink
09:11 , Simon Hunt
The boss of the UK’s biggest publicly traded software company today vowed to hold on to its UK listing despite a host of tech firms quitting the London Stock Exchange in search of higher valuations elsewhere.
Sage, which produces finance and payroll software and has a market cap over £10 billion, said the US was its single-biggest growth market but the firm wanted to keep its listing in the same country as its operational headquarters.
CEO Steve Hare told the Standard: “We’re very happy being listed in the UK – we have the access to capital that we need.
“We have a strong US shareholder base who are perfectly capable of buying shares through our UK listed business so at this point in time we would see no advantage to changing our listing.”
Sage posted a 6% rise in revenue to £1.1 billion in the six months to end March while operating profits jumped 38% to £215 million.
But shareholders appeared disappointed that the company’s growth forecasts would be in line with the previous six months, with the stock falling 10% in early trade before recovering slightly later in the morning.
BT shares surge in weaker FTSE 100, Future among FTSE 250 big movers
08:47 , Graeme Evans
BT Group shares have jumped 9% or 10.3p to 123.5p, their highest level since January after new boss Allison Kirkby increased the full-year dividend by 3.9% to 8p a share.
The performance was in contrast to the reaction to results by easyJet and Sage, with their shares down 6% or 32.4p to 497p and 12% or 137p to 1060.5p respectively.
The FTSE 100 index weakened 0.3% or 29.04 points 8416.76, a decline that partly reflected the stronger value of the pound following yesterday’s US inflation reading.
The FTSE 250 index improved 29.09 points to 20,804.72, led by a 19% rebound for Watches of Switzerland after its boss expressed cautious optimism on current year trading and stuck by longer-term targets.
Magazine publisher and GoCompare owner Future also jumped 16% or 137p to 1007p and Auction Technology Group lifted 42p to 534p following there pair’s half-year results.
Angel Delight ice cream helps Premier Foods sales jump
08:46 , Simon Hunt
Expansion into new product lines helped Angel Delight maker Premier Foods deliver another jump in sales, the firm said today.
Revenue growth in new categories of more than 70% was helped along by the launch of Ambrosia porridge and the extended distribution of Angel Delight ice-cream, which was proving a hit with consumers.
The move meant Ambrosia had become its fourth £100 million brand, Premier Foods said.
The St Albans-based business upped its dividend by 20% to 1.728p after revenues for the year to end March rose 15% to £1.1 billion and pre-tax profits leapt 35% to £151 million.
Premier Foods shares dipped 0.5% to 168p.
Watches of Switzerland “cautiously optimistic” despite VAT impact
08:02 , Graeme Evans
Watches of Switzerland today said UK sales continued to be driven by domestic demand, with minimal return of tourist spending due to the lack of VAT free shopping.
The Mappin & Webb and Goldsmiths business reported UK and Europe sales 4% lower in the final quarter of its financial year, an improvement on the 7% decline in the third quarter.
US sales remained strong across all regions, up 14% at constant currency.
Chief executive Brian Duffy said the company started the new financial year with cautious optimism. Showroom developments on both sides of the Atlantic include the Rolex flagship boutique on London’s Old Bond Street.
He also reiterated his confidence that the company will meet its targets to more than double sales and adjusted earnings by the end of 2028.
Easyjet boss to stand down
08:01 , Simon English
Easyjet boss Johan Lundgren is to step down after more than seven years at the helm, handing the controls to present finance chief Kenton Jarvis.
He announced that today as the low-cost carrier said it will expand its UK network by opening a three-aircraft base at London Southend in March.
For the six months to March, easyJet made a loss of £350 million. That’s usual for airlines in the summer months.
The City hopes it might make a profit of £1 billion in the summer months to make up for that.
Lundgren said: "easyJet's targeted growth and focus on productivity has delivered a reduction in winter losses, boosted by our trusted brand and network that we continue to invest in.
"Our two newest bases, Alicante and Birmingham, are achieving passenger numbers well above the network average and we have announced a tenth UK base at London Southend from next March, continuing the growth of our leisure network in the UK where easyJet holidays plays an increasingly important role.
BT boss pledges to "put Britain first"
07:54 , Simon English
New BT boss Allison Kirkby today set out plans to make the telecom giant a “Britain first” business as she pledged to sell off some parts of the global company and up the dividend to long-suffering shareholders.
Kirkby, who arrived in February to replace Philip Jansen, surprised the City with an increase in the dividend to 8p, a 4% rise that takes the total payout to £750 million.
BT has 640,000 shareholders, many of the them smaller investors who bought in when the company was privatised in 1984.
The promise to shake-up the global arm is at an early stage -- BT is not in talks – but City analysts speculate that there businesses in the US, Ireland and Italy where the company could seek another telecom partner, or sell out altogether.
“BT needs to be great for the UK”, says Kirkby.
FTSE 100 steady and pound higher after US stocks surge
07:19 , Graeme Evans
The FTSE 100 index is set to consolidate recent gains after April’s in-line US inflation reading of 3.4% triggered a relief rally for Wall Street stocks.
All three major benchmarks hit record levels as the easing of price pressures and lacklustre retail sales figures boosted September interest rate cut hopes.
Nvidia rose 3.5% and Microsoft by 2% while the S&P 500 lifted by 1.2% and the Nasdaq 1.4%. The Dow Jones Industrial Average closed 0.9% higher
Risk appetite remained strong during Asia trading hours, despite figures showing Japan’s economy shrank by 0.5% in the first quarter of 2024.
Hong Kong’s Hang Seng index returned from a day’s holiday 1.7% higher, while the Nikkei 225 rose 1.2%.
The FTSE 100 index posted a record close of 8445 points last night and is forecast to start today’s session slightly higher at about 8450.
The pound is at $1.267, having surged to its highest level in five weeks due to renewed expectations that the US might cut interest rates twice in 2024.
Recap: Yesterday's top stories
06:43 , Simon Hunt
Good morning from the Standard City desk.
It has taken until the 105th day of the year but it will still be “nice as pi” to see London’s IPO market get its second major new listing of 2024, and first of a home grown company.
This is how it should be.
An innovative and pioneering British business gets off the ground, moves into profitability and seeks the deeper funding pools and higher public profile that a main market listing can provide.
With luck Raspberry Pi will be sensibly priced by Peel Hunt and Jefferies, and get away with a nice juicy premium on the first day of trading while investors will enjoy liquidity in the free float shares. Just like the old days.
Of course the bigger question is this: Will this IPO open the floodgates... or will Raspberry Pi prove an isolated second quarter outlier, just as Air Astana did when it briefly raised hopes at its flotation way back in February?
There are perhaps reasons to be more hopeful on that score than even just a month or two ago.
~
Here’s a summary of our top headlines from yesterday:
Royal Mail parent ‘minded to’ accept £3.5bn takeover bid from West Ham co-owner Křetínský
Burberry profits slump 40% in “challenging” marekt condition as demand for luxury fashion slows
City broker TP Icap sees revenue in Q1 down 7% on last year when the mini-bankinbg collapse drove record trading
Soaring sales of Plenish dairy-free milks and cold-press juices helps Britvic revenue and profits grow. Fruit Shoot and Pepsi Max also among top performers
Deloitte survey of Gen Z and Millennial workers in the UK find nearly half have rejected a potential employer because of their values and beliefs
