The sell off that was pared back in late trading on Friday following the Brexit vote has resumed today with financials in particular being hit. Read The Trader Nicole Elliott's latest views on the markets here.
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Strikes in France and inclement weather appear to have grounded more than just a few planes at easyJet (EZJ). The budget airline said this morning it had suffered 1,061 cancellations in its third quarter already. This has led to a drop in demand and a commensurate impact on profits. The group said third quarter pre-tax profits had been impacted by £28m and thus would reduce revenue per seat of 1.6 percentage points. And the outcome of the EU referendum hasn’t done it any favours either. Management expects “additional economic and consumer uncertainty” during the summer which has led it to predict revenue per seat at constant currencies will be down by at least a mid-single digit percentage in the second half. And another £25m is expected to be added to its costs given the resultant moves in exchange rates and fuel prices. The shares dropped 15 per cent in early trading. Buy.
Shares in Shanta Gold (SHG) are up 4 per cent today, after the junior miner announced it had received approvals for its underground project at New Luika, Tanzania. With the gold price now firmly above the $1300 an ounce level, and Shanta’s financing less onerous, we stay buyers.
A rare piece of optimism arising from the EU referendum came from Empiric Student Property (ESP) which continues to build its portfolio of student beds to around 7,200, and remains on target to reach its goal of 10,000 beds. Commenting on the referendum result, chief executive Paul Hadaway pointed out that only 6 per cent of all UK students come from the EU. Buy
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Over-50s fashion chain Bonmarché (BON) has announced its new chief executive Helen Connolly will take over the reins from outgoing boss Beth Butterwick on 15 August this year. Ms Butterwick voiced plans to leave the company last year in order to join high street label Karen Millen.
The volatility unleashed by the EU referendum hasn’t dampened spirits over at trading platform Plus 500 (PLUS). Management said the impact on markets as a result of the leave vote had “not adversely affected” the group’s financial position. It reiterated just 15 per cent of its revenues in 2015 came from the UK thanks to its international customer base. As Plus 500’s customers cannot lose more than they deposit, there was no credit exposure incurred by the group. And on the day of the referendum result, Plus 500 registered a couple of records - the most signups (17,000) and most new customers (1,600).
Porvair (PRV) posted a 13 per cent rise in sales in the six months to 31 May, driving pre-tax profits up 7 per cent to £4.5m. The specialist filtration and environmental technology group benefited from the release of new products, the integration of past acquisitions and strong trading in its microfiltration segment.
London focused estate agent Foxtons (FOXT) has warned that profits for the year to December 2016 will be significantly below expectations, with the referendum vote adding to a number of problems facing the estate agency business. Since last Friday, the shares have now fallen nearly 40 per cent, and Peel Hunt expects profits to halve to around £21m.
