Seven days: 6 October 2017

Flying high

Passenger numbers buoyant

Passenger number updates from RyanAir (RYA) and Wizz Air (WIZZ) indicate the high level of competition from budget airlines that helped drive Monarch into administration. Despite cancelling thousands of flights last month, the Irish airline reported a 10 per cent increase in passengers during September to 11.8m, while its load factor – a measure of how efficiently an airline is filling its planes – was up 2 per cent to 97 per cent. Capacity at Wizz Air increased by a fifth year on year, with passenger numbers up by 23 per cent to 21.8m.

London calling

Equity market recovery

A recovery in London equity market activity this year has been good news for brokerage Numis (NUM). It reported revenue up 15 per cent year on year during the six months to the end of September. Management expects profits to have risen by a similar percentage. Its corporate broking and advisory business – the strategic focus in recent years – completed 98 transactions in total, compared with 86 during the same time last year. Equity issuance was up more than a third to £2.5bn.  

Fracking out

Scottish ban

The Scottish government has proposed an effective ban on fracking within the country. Energy minister Paul Wheelhouse told the Scottish parliament that a temporary ban, which has been in place since 2015, should continue indefinitely after a public consultation showed overwhelming opposition to fracking. However, MSPs will be given the opportunity to vote on the issue later this issue before a final decision is made. Tom Pickering, operations director at Ineos Shale – which has a fracking exploration licence across 700 miles of Scotland – said the move was a “a sad day for those of us who believe in evidence-led decision-making”. With only the Conservatives opposed to a ban, the vote seems more a formality.

Topps at the bottom

Profit warning

Challenging market conditions prompted Topps Tiles (TPT) to warn that adjusted pre-tax profits for the year to September would be at the lower end of market expectations. Like-for-like revenues at the ceramics retailer fell by 2.9 per cent over the year, compared with a 4.2 per cent improvement in 2016. Management tried to reassure shareholders that the company maintained good control over gross margins and effective cost management over the year, but shares still fell about 3 per cent on the day of the announcement.

Uber for IPO

Board overhaul

On the day Uber chief executive Dara Khosrowshahi met with Transport for London authorities, its board voted to overhaul its governance to shift power to more recent investors. The board also agreed to make Uber a public company by the end of 2019. The governance changes are dependent on an investment by Japanese telecoms and technology group Softbank completing. All ‘super-voting’ shareholders – including former chief executive Travis Kalanick – would be stripped of their extra votes, while the board would also be expanded. A consortium led by Softbank Vision Fund plans to invest an initial $1bn-$1.25bn in Uber at its current $68bn valuation, and a secondary stake by purchasing shares from existing shareholders at a lower valuation.    

Another bad news day

Telit warns again

Telit Communications (TCM) has narrowed its financial guidance for the year ending December 2017, and is now expecting revenues of $390-400m ($370m in 2016) and adjusted cash profits of $44-48m ($54m in 2016). Further restructuring costs may also have an impact on this year’s results, while a review of the company’s activities continues. This follows various setbacks for the self-styled enabler of the ‘internet of things’, including the departure of former chief executive Oozi Cats after an independent review found evidence of an historic indictment issued against him in the US. In better news, Telit also announced a partnership with Wind River, an Intel company.