Markets fell back marginally as investors took the official triggering of Brexit in their stride. Click here for The Trader Nicole Elliott's latest thoughts.
IC TIP UPDATES:
Just a days after news broke about it losing control of South West trains franchise to rival company FirstGroup (FGP), Stagecoach (SGC) has revealed a 1.6 per cent improvement in UK rail like-for-like revenues over the 40 weeks ended 4 March 2017. Reported separately, revenues from Virgin Rail Group's West Coast franchise jumped 5.3 per cent, although the division was up against seriously weak comparative figures from last year. The bus divisions aren’t faring as well, with revenues down 0.9 per cent in London and 1.7 per cent regionally. Sell.
Sticking to travel, Carnival (CCL) reported first quarter results yesterday, where EPS of 38 cents comfortably beat consensus forecasts of 32 cents. Management went on to say that cumulative advance bookings for the remainder of 2017 were “well ahead of the prior year at considerably higher prices”, prompting analysts at Numis to raise EPS forecasts for the current year by 5.5 per cent. Buy.
KEY STORIES:
It’s a momentous day as Prime Minister Theresa May signs on the Brexit dotted line. This has prompted bosses at budget airline - and European short-haul operator - Ryanair (RYA) to “call on the UK Government to put aviation at the forefront of its negotiations with the EU and provide a coherent post-Brexit plan, or risk leaving the UK without any flights to or from Europe for a period from March 2019, when it exits the EU.” Whilst that might sound a tad dramatic, Ryanair points out that the UK is set to leave Europe's "Open Skies" system, meaning the government will have to either negotiate a bilateral agreement with the EU to allow flights across Europe to continue, or else revert to “historical WTO rules”, which do not cover aviation, “thereby raising the distinct possibility of no flights between Europe and the UK for a period from March 2019”.
OTHER COMPANY NEWS:
A pre-close update from TUI travel (TUI) comes just one day after close rival Thomas Cook (TCG). The company appears to be in a “solid position” according to City analysts in reference to summer bookings, which are up 4 per cent on last year, with prices up 5 per cent. Hotels and resorts are trading well overall, while new ships have driven continued cruise growth. Management has also reiterated FY17 guidance for underlying cash profit growth of at least 10 per cent.
Shares in Sanne Group (SNN) were flat following release of its full year results. Pre-tax profit jumped to £15m from £2.4m in 2015 due to strong momentum from new business opportunities throughout the year. The group is continuing to invest in operations both inside and outside the EU to insulate it against the effect of Brexit.
